Why aren't US-based car makers already building great small cars?
Automotive News publisher Keith Crain has a column up today telling the US car-makers to start working on small cars now. Mr. Crain doesn't go nearly far enough. The fact that General Motors, Ford and Chrysler don't have competitive B-class cars in the US market today is totally inexcusable. They have more than enough engineering resources to create really good small cars. They have been doing it in overseas markets for many years. General Motors has the Opel Corsa, Ford has the Fiesta and Ka, Chrysler has through DCX has the Smart and Mercedes A- and B-class.
These manufacturers should not need to go looking for overseas partners to work with, the way Chrysler is trying to cut a deal with a Chinese car maker right now to build the Hornet. The cars exist today. They should have been able to foresee that gas prices were eventually go to go up and they should have been ready to sell some small cars here. Clearly, European built small cars wouldn't be price competitive in North America. However, since 2001, they should have been able to find a lower cost manufacturing location. If Honda, Toyota, Nissan, Kia, and others can sell cars like the Fit, Yaris and others here there is no reason that Ford and GM can't.
GM already sells variants of the Corsa in Mexico, the most recent versions should have been engineered to meet US requirements as well. Instead they won't be available in the United States until at least 2010. Instead the closest vehicle that they have is the Daewoo built Chevy Aveo. Similarly, Ford should have had at least the Fiesta and probably the Ka on sale here by now. The funky looking Ka would be a good competitor for cars like the Scions and the Mini. In fact, properly equipped, the Ka should be able to sold as a premium small model against the Mini and might even make money for Ford. As for Chrysler, why can't they design small car on their own? Why do they have to rely on Mitsubishi or some Chinese company to build a car?
Instead of working up sixteen variations of every SUV and truck they need to re-assign large numbers of engineers now! If you have a subscription to Automotive News you can click on Read for Keith Crain's column.
Reader Comments (Page 1 of 2)
Tony Belding 10:47AM (10/24/2006)
Should we even care anymore? Honda, Toyota and other "foreign" car makers are manufacturing huge numbers of cars in the USA now. I read somewhere that the car containing the most US-made components is not a Ford or a GM, it's the Honda Odyssey. The only difference between "domestic" car companies (GM and Ford) and foreign companies like Toyota and Hyundai (and DaimlerChrysler!) is where their corporate HQ happens to be located.
Furthermore. . . It's been literally decades since the Japanese came in and first challenged US automakers. Ford and GM have had plenty of time to try and straighten out their messes and get their act together -- and yet have accomplished nothing. So, I think it's really time to give up on them, stop even caring about them. Let them lay down and die.
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loikll 12:17PM (10/24/2006)
The whole point of an economy is to serve the consumer, not the producer, so I totally agree with Tony. As a consumer, I don't care about Detroit's fate. At all.
But to indulge in Schadenfreud (sp?), I do think the Big 2.5 evolved themselves to be truck-makers, instituting some persistent cultural inability to make good small cars for the US. I suppose the best talents, the most management attention, the rewards and promotions, were devoted to big vehicles, and the rest withered. (Similarly, their attempts to be lending banks might have seeemed clever to the beancounters, but it has badly corrupted them as lean-mean manufacturers.)
Unlike Crain, I think it's entireley possible that oil prices will stay cheap indefinitely, but that's no excuse for ignoring the risk, or for showing contempt for the millions like myself who prefer small cars.
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Jim 12:38PM (10/24/2006)
"the Ka should be able to sold as a premium small model against the Mini"
I'm sorry, but this is simply impossible. Have you actually ever seen a Ford Ka, Sam? Tweeeeet! Rest Period, out of the pool.
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Cliff 1:45PM (10/24/2006)
Tony - I TOTALLY agree with you - with the recent news that Ford lost $5.8 BILLION, they have no one to blame but themselves. I personally will never buy another amrican made car. I've always owned VW's and now Honda and the things just keep running.
My advice to the Big 3: You made your beds, now lie in them.
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Stphane Dumas 2:55PM (10/24/2006)
while we critic Detroit for not offering a B-segment car, a twisting irony is Toyota and Nissan now offers V8 powered vehicules (Tundra, Sequia, Titan, Armada, various Lexus and Infiniti models), more easy to critic Detroit for not offering B-segment car while we aren't so critic of Toyota for exemple for their V8 and big Sequia, is it a case of "reverse racism"/"positive discrimination"? LOL
I wonder if the Camry and Accord might grow even bigger in the next upcoming years? The 1982-85 Accord was smaller then the Chevy Cavalier at that era and today the Accord had grow to almost the size of the former mid-size G-body Olds Cutlass. And the chances then Honda might offer a V8 one day are bigger then the Chicago Cubs winning the World Series or the Toronto Maple Leafs winning the Stanley Cup.
And a interesting "what if" question to ponder is, what if the Olds 350 diesel wasn't plagued with mechanical problems when it was launched? Does peoples who had flock to smaller cars or keeping a big car who's diesel powered? What might have been?
I spotted a good quote about an article of the European Chrysler 300 CRD in Diesel Power magazine, the article was from last summer. http://www.dieselpowermag.com/features/0510dp_chrysler_300_crd/
"Although Americans balk at $3+ per gallon, they're still loathe to give up the size and comfort they've become accustomed to. The prospect of a livin' large 300 returning more than 30 miles per gallon on the highway would likely be an easy sell to "have your cake and eat it too" Americans."
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Jared 9:47PM (10/24/2006)
What are u kidding me. GM sells the Aveo which has like 45% market share. How can anyone say they don't have a B segment car? What a joke! Does he not even know that? Do they make great small cars? Answer yes, they just don't make them in the US. Lets be a little honest and not just jump on the Jap band wagon please.
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Jimmy 11:28PM (10/24/2006)
To be fair, GM has had a "B class" small car for sale in the US for 29 of the past 30 years.
Aveo 2003-present
Metro 1989-2001
Sprint 1985-1988
Chevette 1976-1987
While these are not the best in class, GM has remained committed to being a "full line" manufacturer.
The thing with the US market is huge sales of relatively inexpensive D class cars. Something like a Toyota Camry, which is considered "average" in the States but large in Europe and Asia.
The Camry class vehicle sells very well in the States but very poorly in Europe. The Camry class vehicle has a starting price below 20K $US as well. That leaves very little room on the price scale for the C class and B class products. B class products in the US are generally very cheap, like the Yaris or Aveo. The only exception is the BMW Mini. However, BMW is one of the few manufacturers with no inexpensive family sedan.
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Earl 8:10AM (10/25/2006)
You guys act like the Fit, Versa, Yaris etc. have been out for years. They've only been out for what, 15 minutes?
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Howard kerr 9:05AM (10/25/2006)
It's ironic, but if you study the histories of all the American car companies, at one time or another they ALL considered small(er) car production. In the past, it was always necessary to get a smaller price tag to go with that smaller car...which usually meant a smaller profit margin. The American car companies have persistently stuck with areas of the market where they make money. Who can blame them for wanting to make money and therefore stay in business?
For it's part, the American consumer has said "build a decent small car and we will buy it". And they did. The Europeans build some decent small cars and we buy them, the Asians build decent small cars, and we buy them, but when the American manufacturers build small cars......we buy SUVS. For many U.S. consumers, it's still a case of bigger is better (value). Until Ford and GM get the folks who design cars like the Corvette and Mustang to work on something that would be a U.S. "Mini-beater"...we will never have decent, affordable, desireable, small cars built in the U.S.
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EnviroBob 9:44AM (10/25/2006)
Why is it people want to heap praise on anything a "foreign" manufacturer does, but refuse to acknowledge when a domestic brand does something positive or at least makes an effort.
Seems to me GM introduced a small economy car in 1959 (that was produced for 10 years)that had a lot of features later found in many cars- the Corvair. The Vega was introduced for the 1971 model and ran until 1980. GM also sold 4 cyl Opels through its Buick dealerships and how many Mitsubishis did Chrysler sell sine they began importing the Cricket in '71? As Jimmy mentioned, in the interim you had the Chevette, followed by all of Geo branded / associated cars. If all of the people who love small cars so much actually bought them, the Geo brand would have succeeded. In addition, how many J-Cars has GM sold since 1982?
The fact that is being overlooked here is one of function. How is a family of four supposed to drive a Yaris, Aveo or any other car in that segme By the time you load down any car in that segment with 4 people, its real world highway mileage is lower than the same number of people in an Impala with a 3.5 or a 3.9 with DOD.
The bottom line, domestic manufacturers have been selling small cars in this country for a very long time. Most people, however, realize that the car not only has to be good on gas, it has to be functional for its intended purpose.
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Tio 12:30AM (10/26/2006)
I agree that they should have been on the ball. His statement that the Ka can be a mini fighter is doubtful. While the styling is cute, the interior would have to have a total redo and the engines would have to be new higher powered units.
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fawcutter 10:56PM (10/25/2006)
Guys got to get out of our Ameri-centricity. Fit and Yaris have been in Europe for at least two years before intro in US. They are currently near the end of their product cycles. Look for newer versions with lots of fanfare in a couple of years.
Ford and GM do make decent B-segment cars in Europe and Latin America. Just look at the gripes posted in AutoBlog about not bringing them here. One east-coast reporter even complained that GM Brazil makes really nice small cars - and they were also flex-fuel.
Americans vote with their pocketbooks. The rise in B-segment sales convinced Maximum Bob Lutz that the next Corsa will also be designed for the US.
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S John Massoud 6:56AM (10/26/2006)
Maybe some of us do not want to be told what type of cars we are supposed to drive. This is government interference in our lives in the worst way. If the environmentalist wacko's like the writer of this blog would stop barring us from drilling for our own oil, we could be energy self sufficient for the next 75 years. But since the Sierra Club and the other "green groups" (green as in flowing with cash) stop raping our pocketbooks, gas prices will remain inflated.
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Derek 7:53AM (10/26/2006)
I've never heard the government tell anyone what to drive. Maybe that's your concience you're hearing?
I love how the writer completely ignores the Aveo. Maybe they should take a drive in the '07 model. The interior is impressively stylish. It is insanely quiet inside and really roomy. Yes, the EPA mileage is below the Fit/Yaris, but it also costs several thousand less and that still buys alot of gas. Plus, GM's warranty now beats Honda and Toyota.
As for the domestic makers in general, I have no idea where Ford is heading and Chrysler is only a half-breed domestic, but GM is definately turning things around. Their losses are shrinking rapidly (maybe heading towards profit soon?) and the vehicles are loads better than the ho-hum '80's models. Yes, they have lots of trucks and they are really nice trucks, but they also have a good selection of cars. Even their larger cars like the Malibu and Impala return impressive mileage if you don't by the V8 model...
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Jimmy 9:49AM (10/26/2006)
#11 "Guys got to get out of our Ameri-centricity. Fit and Yaris have been in Europe for at least two years before intro in US. They are currently near the end of their product cycles."
Actually the Yaris was just redesigned this year and the new model became available in the States, Europe and Japan in a fairly short time frame. Of course, the model in the States is a bit stripped down. We don't get: the five door hatch, CVT option, diesel option, sat-nav, leather, or climate control. The Scion xA is still based on the previous generation Yaris and due for imminent replacement.
The Honda Fit is the old one. It is a 2001 design with no major updates.
"Americans vote with their pocketbooks."
That is true, but our unique regulations severely limit vehicle choice in the US. It's quite expensive even for manufactures to "Americanize" a car to meet the unique regulations in US. I'm not saying that safety or environmental regulations are bad.. but that the marketplace would be "flatter" if Euro and US standards were compatible.
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Tom 2:39PM (10/26/2006)
In the late 80's I had a Nissan Sentra that regularly got 44 MPG. It had a 1.5L (old style pushrod) engine and a 5 speed transmission. It wasn't the quickest car I've owned, but it fit the nitch I needed at the time. When I replaced the 75s tires it came with stock with 70s, I lost 4 MPG.
The fact of the matter is, the US consumer has gotten used to gas prices in and around the $1.40 a gallon range. Due to this fact the car companies have produced vehicles that (supposedly) make them more money per vehicle - larger gas consuming monsters (although nothing like the 60s and 70s).
Sorry if I'm wrong but if the new Vette that produces close to 500 HP can get 28 MPG on the highway, the technology exists for smaller cars (Honds Civic size) to get well into the 40 mpg and 50 mpg range. If not, reproduce the 82 Nissan Sentra with safety upgrades - I'll buy it - but I'll keep the 75s this time.
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Martin 12:23PM (10/26/2006)
"5. while we critic Detroit for not offering a B-segment car, a twisting irony is Toyota and Nissan now offers V8 powered vehicules (Tundra, Sequia, Titan, Armada, various Lexus and Infiniti models), more easy to critic Detroit for not offering B-segment car while we aren't so critic of Toyota for exemple for their V8 and big Sequia"
I think US car manufacturer had some problems evaluating the production forecast of pickup and SUV. Ford, GM and Chrysler sales a lot of more pickup and truck then the japs but seem to produce too much due to, I think, bad planning. Japanese manufacturer seem to do a better job at this game. Inventory of Toyota and Honda trucks are lower then everybody. Not because they sale more US made trucks but because they ship out of the shop a lot less (exception to NIssan because of the totally useless Armada segment).
That's my opinion on that.
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Roger Pfeiffer 3:13PM (10/26/2006)
Alternative fuels for an automobile are certainly becoming increasingly important as time goes on. Eventually, we are bound to run out of fossil fuel on this planet, as there is a finite amount to pump from underground. Additionally, the rate at which we use it up will be increasing, especially since China is just beginning its rapid expansion in the use of cars. Also, the way things have been going in recent years, the carbon dioxide released from burning fossil fuel, fuel that has been buried for millions of years underground, is causing “the greenhouse effect” to be of major concern because of the global warming it causes. Clearly, the polar ice caps are melting at an increasingly alarming rate, and not as much of the water is re-freezing in the “winter months” (depending on the pole). If we don’t do something about it soon, like within about 20 years, we will find our cities on the coasts buried under water. Also, as I understand it, the warming of the oceans will cause quite dramatic shifts in weather patterns, meaning more hurricanes and stormy weather. I’m not writing this for the purpose of extolling gloom and doom, but rather to point out that we human beings in the near future need to be altering our ways of burning such large amounts of fossil fuel. We need to ramp-up the development of new technology and methods to power our cars and to be less reliant on cars in general. Of course public transportation helps, but we need to develop the technology and efficiency of using alternative sources of energy soon. In my opinion, ethanol is an important component of the bridge needed to get us to the use of hydrogen cells, and beyond, to power our vehicles. The beauty of burning ethanol, being that it comes from the fermentation of vegetative sources such as corn, wood pulp, and many other plant sources, in effect recycles the carbon dioxide present in our atmosphere. Plants use it to grow in the process of photosynthesis. Brazil uses almost exclusively ethanol that is derived from sugarcane grown there.
Here in the U.S. and elsewhere, the auto makers are producing more and more cars that will run on “E85” fuel, composed of 85% ethanol and 15% gasoline. Gasohol (10% ethanol) has been a good start, but E85 is even better in my opinion. Vehicles that will run on either gasoline or E85 are called “flex-fuel vehicles” (FFVs). In the latest issue of the leading consumer magazine is a front-page article about what they deem, “the ethanol myth”. They came to the conclusion that it is disadvantageous to run a FFV vehicle on E85 fuel instead of gasoline. Both the fuel economy and acceleration of the 2007 SUV tested dropped when running on E85 compared with gasoline.
From this, it seems apparent to me that the U.S. needs to catch up to Sweden, General Motor's Saab in particular. Running on E85, the Saab 9-5 "BioPower" Turbo model delivers a significant 20 percent increase in maximum power and 16 percent more torque while emitting 80% less CO2 into the environment compared to running it on gasoline. Running E85 compared to gasoline takes about a second off the 0-60 mph time, and there is a 15 percent gain in fuel economy on the open road where fuel-enrichment for engine cooling is no longer necessary when a vehicle is run on ethanol. The 9-5 BioPower has taken the Swedish market by storm this year, outselling its full-year 2006 sales target in just four months. Sweden has a long cultural and political tradition of respect for the environment, and this is reflected in Saab's achievements of the pioneering of asbestos-free brake linings and the removal of CFCs from air conditioning systems, and now Saab’s Trionic 7 BioPower engines. I remember back in 1973, when the oil embargo hit and additional "smog control" devices (i.e., the EGR valve and air pump) were required on new cars, their performance declined significantly. Many people at the time, including mechanics and engineers, thought the performance and efficiency of cars had been dealt a lethal blow. This is when I bought my first Saab, a 99 EMS. Saab, with the development of the "lambda sond" oxygen sensor (keeps the correct stoichiometric ratio of 14.5 to 1 in the air-fuel mixture) in 1976 along with electronic fuel injection, required no such smog control devices. It was the beginning of electronics-to-the-rescue for car performance. This technology, along with concern for safety and functionality, enamored me with the cars. I was impressed that they did this because they wanted to, as opposed to doing it because they had to. Seemingly at odds with one another, performance and fuel economy were blended together in a practical and distinctive car.
So here we are, forty years later, and Saab is still leading the way in emissions and performance technology. All Saabs are turbocharged and have direct ignition, and the engine’s combustion process is very precisely controlled by a powerful 32-bit microprocessor controlled system called, "Trionic 7". This unit monitors the combustion process in each cylinder a million times per second for optimum efficiency. It precisely regulates the fuel-air mixture in each cylinder, the ignition timing, and the amount of turbo boost pressure allowed. And(!), very significantly, it automatically adjusts itself to any proportion of gasoline and ethanol.
How does Saab achieve higher performance using E85 compared to gasoline, you might ask? It stems from the octane rating of E85 being about 10% higher than that of gasoline. The Trionic system thus allows more advanced ignition timing, a higher compression ratio, and a higher turbo boost pressure, all of which increase the performance and efficiency of the engine.
There are two driving forces behind the adoption of a renewable and sustainable fuel such as “bioethanol” E85: The environmental need to combat climate change from the greenhouse effect and the strategic need to overcome dependency on oil, a finite resource for which global demand will exceed supply, not to mention the world tensions related to it’s procurement. Sweden plans on being free of dependency on oil by the year 2020. Let's hope that the same will be true of the U.S. It appears to me that General Motors, especially with Saab’s traditional engine know-how, is leading the way.
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Mike 2:36PM (11/10/2006)
Make gas $6.00 a gallon. put the money made into public transportation. Take our expressways and put a mono rail systems right down the middle.
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1138 3:40PM (12/08/2006)
They are not here for one very OBVIOUS reason.
Safety Regulations
Offshoreing provides a channel to ease those regulations that domestic production has no channel to address.
It's a crying freaking crime that our own laws (and SUV's) prevent us from having cars that make sense (even leaving out fuel issues).
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