Do Americans Like Small Cars?

Aug. 13, 2010
Whether it's SUVs, minivans, fins or woodie-station wagons, the U.S. automakers will ride the fad into the ground.

Do Americans Like Small Cars?

I don't think it's a question of whether Americans like small cars or large cars. I think Americans want to drive what is in fashion or the latest status/style. It's simply that the latest auto fashion has been large SUVs.

One of Detroit's huge failings has been to bank their industry on making vehicles for which they could charge an extra 20%+ because of fad/style/status, and ignore the bread-and-butter lines. This model works great for consumer/fashion goods like sneakers or jeans, for example, which can change style direction in a mere season with relatively small cost. But a vehicle assembly line costs billions to tool-up for, with a multiple-year payback in the investment. Over time the car company is then stuck with cranking out cars that are less and less desirable at lower and lower margins. The capital commitment is just too high to run a car company on a consumer goods marketing model.

Whether it's SUVs, minivans, fins or woodie-station wagons, the U.S. automakers will ride the fad into the ground. Then they go through the obligatory restructuring lull until they catch the new wave. How many times has GM "restructured" in the last 30 years? Conservative columnist David Brooks went so far as to say that GM is not in the automobile business, but rather the restructuring business.

But (using the Japanese companies as an example) the workhorses of the Toyota line are and have been the Corolla and the Camry; likewise the Civic and Accord for Honda. Other models contribute to their overall market mix, but they invest the heaviest in maintaining their plain-vanilla everyday-transportation lines, year after year and decade after decade. I believe that both the Corolla and the Civic are both over 30 years old (maybe even 40) ... is there a comparable Detroit model that's even half that? -- bgill

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