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Why don't GM, Chrysler & Ford build high MPG vehicles?

reddogsreddogs Posts: 353
edited March 6 in General
I was reading the Consumer Reports when I came across the editors veiwpoint, and it made its normal points how cars and trucks dont get the mileage that is listed for them, and that the mileage standards have to be raised etc...

Then the article stated that the reason the auto manufacturers were resisting the higher mileage standards were that they wanted faster and more powerful vehicles and bigger trucks rather than smaller as thats what they felt the market wanted. So the auto manufacturers were going to continue making 10-12 mpg SUV's and trucks and high powered or luxury cars such as the Mustang, Dodge Charger, Chrysler 300's and Cadillac STS rather than hybrids or other high mileage vehicles.

They were entrenched in building, selling, and marketing, these types of cars and trucks and would not build any large numbers of high mileage vehicles because thats not were the profits were. So as long as American consumers continued buying these vehicles the Big 3 would fight any attempt to raise the mileage requirements using every means to delay or stop any change.

With the price of gas being what it is, this is completely opposite of what I thought the consumers wanted, but maybe some Americans still want big engines and low gas mileage....
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Comments

  • mirthmirth Posts: 1,212
    ...pretty much every auto company, except Honda, has resisted mileage requirements. And the only reason Honda doesn't protest is because they don't really sell any trucks. Also, car for car, apples to apples, the domestics and imports are pretty comparable when it comes to gas mileage. That is, a Ford F-150 and a Toyota Tundra are pretty much equally bad. How evil of Ford to actually want to sell a lot of F-150's, and how nice of Toyota to purposefully make the Tundra an inferior truck so it would sell less. Oh wait, they're redoing it this year and starting up a new truck plant in Texas. Oh well.

    The domestics and imports make about the same number of models of each type of vehicle (subcompact, compact, midsize, SUV, truck), and they pretty much get the same mileage, but the domestics sell more trucks and the imports sell more cars. I think this is already beginning to even out on its own - why do we need to make a law?
  • john_324john_324 Posts: 974
    It really is a market situation...the problem (if there is one) isn't with the automakers, but with us the consumers. We in America just don't want super high-mpg cars. A lot of people say they do, but what they end up buying shows different preference ordering.

    It's a combination of the low (relatively, that is) price of gasoline here, the size of our country/communities, the lack in many places of adequate public transportation or a desire to use it, and something that often gets overlooked, the increasing wealth of people who buy new cars.

    When you combine these together, one can see why higher fuel mileage is usually NOT the most important consideration when people purchase cars these days.
  • mirthmirth Posts: 1,212
    Well said. Mileage has certainly bumped up into the top ten (or even the top five) attributes people look for since gas hit $3/gallon, but it's definitely still not number 1. Now it's more of a "well, given that I want a mid-size SUV, which mid-size SUV has the least crappy mileage?"
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    The Escape hybrid I believe ? I could be wrong. I'm sure the RX 400h, and Saturn Greenline is up there too. ;) BTW- I bet the new Acura RDX will fair well in fuel economy.

    Rocky
  • nippononlynippononly SF Bay AreaPosts: 12,692
    CR had a survey earlier this year, not scientific but including more than 1000 responses, of how high a priority fuel economy will be for those folks the next time they buy a new vehicle.

    More than 80% rated fuel economy in the top 2.

    BUT, that may not mean what it sounds like it means. Americans are used to decades of 12-15 mpg hogs, particularly among the large-truck and -SUV drivers, so when THOSE people say they will prioritize fuel economy the next time out, they mean no way will they settle for anything less than 19 or 20 mpg next time!

    People like me consider 20 mpg laughably bad - just look at that in the context of the world! Look at how much gas costs relative to other "necessities", then look at how much filling up a 20 mpg vehicle will crimp your discretionary expenses like movies, vacations, etc.

    Anyway, I know we had all those discussions here at Edmunds last summer after gas prices spiked, but my point is that people genuinely mean it when they say fuel economy is important to them, it is just their frame of reference is so skewed by what we have had here in the States in the past, that they are not looking for the kind of FE that the mileage zealots are looking for.

    Plus, it is highly doubtful the domestics will back-step in power or size - regulatory changes will have to force them to do that. Can you imagine what sales of the 300C would be if it had a $2000 gas guzzler tax on it? That's the kind of regulation that will cause the domestics to change their direction.

    Meanwhile, it is a very pertinent point that Toyota is headed toward "bigger, badder, and gas-guzzling-er" at a rapid pace too, with the new Tundra and the upsizing of their entire line of SUVs AND the Tacoma. The cars still do pretty well, although I was disappointed to see that the new Camry 4-cylinder has actually DROPPED a point in fuel economy, despite using the same engine. The new Yaris has the same EPA rating as the old one, and who knows what will happen to the new Corolla next year. But the Avalon does pretty well for a large car - now imagine if they had shorn off 50 hp - could they have done 5 points better in FE? Who knows.

    And of course, when the domestics are fighting the government on raising standards, Toyota is right there by their side. :-(

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • gagricegagrice San DiegoPosts: 29,028
    And of course, when the domestics are fighting the government on raising standards, Toyota is right there by their side.

    It is tough for me to bad mouth the big car makers for building what people seem to want. I think two issues are degrading fuel economy. Bigger cars with more HP and stricter emissions laws. We had several 50 MPG cars in the 1980s. To get 50 MPG today along with SULEV II rating is a real trick. Three hybrids with all their complexity have come close. At what cost? Is it worth it? I don't think mainstream buyers are interested enough to down size from their SUVs and CamCord sized vehicles. In reality only one hybrid gets 50 MPG. The Insight does it. The Prius and HCH are close behind.
  • drfilldrfill Posts: 2,484
    SEVERAL 50 MPG cars in the 80's?

    Name 2 NOT named Geo Metro.

    DrFill
  • drfilldrfill Posts: 2,484
    Obviously, Toyota has earned the right to make a 15MPG Tundra if that's what they so choose, since they already make the most efficient cars on the market.

    GM and Ford have some explaining to do.

    Edmunds says the 4-cylinder/hybrid can't even get 25 MPG, while Highlander Hybrid/RX400h get mid 20's with 260+ HP. GM is doing nothing but asking for help building a hybrid.

    DrFill
  • gagricegagrice San DiegoPosts: 29,028
    Civic HF, Corolla diesel and VW diesel for three. Even the Ford Ranger offered a turbo diesel that had an EPA of 31 MPG. Name me any mini PU in the US today that gets close to the CAFE 27.2 MPG combined. Face it our fuel economy has regressed in this country.
  • john_324john_324 Posts: 974
    "CR had a survey earlier this year, not scientific but including more than 1000 responses, of how high a priority fuel economy will be for those folks the next time they buy a new vehicle.

    More than 80% rated fuel economy in the top 2."


    Topics like fuel economy often have a high response bias potential (you tell the surveyor what you think the right answer is, not what you actually believe).

    Just like topics like saving the environment, protecting children, defending the country...they all have built-in socially correct responses that make it hard for us to say otherwise.

    If there are any students on the boards, this would be a fascinating research question - what are American's true automotive preferences?
  • nippononlynippononly SF Bay AreaPosts: 12,692
    yeah, but why is "I want high fuel economy in my next car" the "right" answer? This is America, land of the free, of wide open spaces, of the most gas-guzzling vehicles in the automotive universe! Isn't it every American's right to guzzle gas unabashedly? I sound sarcastic, but I am not trying to be.

    DrFill: how about the Subaru Justy 3-cylinder? Certainly the Civic HF as already mentioned, and the CRX HF for you 2-seat fans. Doesn't the almost-50 mpg Sentra CA go back a ways? Probably not that far though. And how about the old Ford Festivas, before they became Aspires? I had a friend that got almost 50 mpg in hers...heck, maybe the Aspires were easy on gas too, I dunno.

    My sister had one of those Corolla FX hatchbacks with the 8-valve engine (NOT the 16-valve performance version) that got low 40s in mpg too. Stick shift of course.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • john_324john_324 Posts: 974
    "yeah, but why is "I want high fuel economy in my next car" the "right" answer? This is America, land of the free, of wide open spaces, of the most gas-guzzling vehicles in the automotive universe! Isn't it every American's right to guzzle gas unabashedly? I sound sarcastic, but I am not trying to be."

    No, I get your point. :) I think the answer is that right now we're saturated with social opinion that says that consuming lots of petroleum is bad, and it's no longer just from the left as it used to be. The critique from the left is still that we're polluting the environment, poisoning our children, etc. but now we have for the first time, right-wing concerns that dependency on petroleum is funding terrorism, empowering fanatics and decreasing our security. These two mindsets together influence an increasing amount of people.

    Mind you, your statement is what a lot of people *really* believe in their hearts (and actually do, based on how they actually spend their money), but what they'll tell an interviewer is often times reflective of what they've been told by the news, their peer group, etc is the correct answer.
  • mirthmirth Posts: 1,212
    Obviously, Toyota has earned the right to make a 15MPG Tundra if that's what they so choose, since they already make the most efficient cars on the market.

    So, if Toyota eventually supplants the F-150 and their corporate MPG average falls enough, will they lose the "right" to sell the Tundra? Who determines which company has the "right" to sell a gas-guzzler?

    And where do you get "most efficient"? For example, a Camry 4 cyl gets 24/33 MPG, while a Malibu 4 cyl gets 24/32 - not exactly a huge difference. The difference is that Toyota sells more Camrys than Chevy sells Malibus. And Chevy sells more trucks. What "explaining" do GM and Ford have to do? - God forbid they sell people good trucks. But now their car sales are increasing so that should make everyone happy.
  • nippononlynippononly SF Bay AreaPosts: 12,692
    Of course, OTOH Toyota also has a very popular model that makes a combined 35 mpg (Corolla), while the best GM can do is a slow-selling model making a combined 31 (Aveo), and a more popular model making a combined 29 or 30 (Cobalt).

    Toyota will have another model on the market in April that makes 40 mpg highway, 37 combined. And then of course, the Prius makes over 40, usually WELL over 40, with fueleconomy.gov reporting owners' average experience as 47 mpg. By the end of the year, 1 in 12 Camrys being sold will also be a hybrid, with a combined EPA rating of 40 mpg, which probably means it will do at least 33-35 combined in the real world.

    Compared to this, what of GM? The only near-term change in its prospects is that of the new GMT900 trucks, with SUVs already here and pick-up due in the fall, all making a combined rating less than 20 mpg, and with the bright shiny hopes of GM resting on their increase in sales over the old models. Yes, the Aveo has also been revamped this year, but its EPA rating has not increased has it?

    While at Ford, the hot news is that the revamped Expedition will soon be here, with the new 'XL' variant to replace the old Excursion. All with combined EPA ratings of well under 20, I am sure, although I haven't seen the actual figures.

    I think people's point is that Toyota's combined EPA average weighted for actual sales is MUCH higher than GM's or Ford's. Not that I am silly enough to think that this somehow gives Toyota more "right" to sell gas-guzzling Tundras. But I bet even if the next-gen Tundra doubles in sales to around a quarter million annually, it will still be so much offset by all the high-mileage cars being sold that Toyota's overall weighted average will exceed that of GM and Ford by more than 25%.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • mirthmirth Posts: 1,212
    ...statements. I just took umbrage about the "right" to sell gas-guzzlers. I also am not looking to gas-electric hybrids to save us because I think we'd just be taking the money we'd save on gas and giving it to the dealers and manufacturers (through extra up-front cost and then later through dealer-only, inflated maintenance costs).

    GM and Ford are refreshing their SUV's and trucks because if they didn't their customers would just move to Toyota and Nissan. I think from Ford at least we will see some more small cars in a few years (probably not GM, unless you consider a rebadge Cobalt new), so I think, given 5-10 years, this will all even out due to market pressures. So new federal regulations aren't needed.
  • gagricegagrice San DiegoPosts: 29,028
    You have to remember Ford, GM & Dodge sell a lot more fullsize trucks than Toyota. Because people like PU trucks to drive, myself included. You could also use the argument that Honda is far better than Toyota because they sell a lot of cars and only a few larger vehicles. Toyota is only building the hybrids to counter balance the sale of bigger gas guzzlers. GM trucks across the board are as FE as any of the Toyota truck based vehicles. The GM Suburban that will out-haul, out-pull and carry more passengers than any SUV that Toyota makes, gets better mileage than any of the big Toyota SUVs. I don't know what more GM can do to satisfy the CAFE whiners. Americans like big PU trucks and SUVs. GM builds the best in the world....
  • mirthmirth Posts: 1,212
    The problem with CAFE is, like many government regulation efforts, it had the opposite affect of what was intended. Instead of fleet MPG going up over the years, they have actually declined. So the thought of further government regulations doesn't excite me. In this case anyway, let the market work.
  • john_324john_324 Posts: 974
    The problem with CAFE from a policy p.o.v. was the loophole that light trucks aren't figured in the count.

    The only proven way to get both the public and car manufacturers to cut gasoline comsumption is to raise the tax on gas substantially and make consumers pay closer to the true cost of their consumption.

    But politically, it's going to be extremely hard, given our collective attitude about gas guzzling being a big part of "pursuit of happiness"... :(
  • geo9geo9 Posts: 739
    If you wanna pack your family in a teeny-tiny
    4 cyl. cam/cord for the sake of a few mpgs. and
    CRY about it...........
    WALK, use public transportation...............

    Sorry I will pay the extra few bucks and get a
    measly 20-25 mpg. and ride in my v-8 powered
    Cadillac.................

    The big 3 has/had quite a few gas stingy cars
    and trucks thru the years that NOBODY bought ! :P
  • grbeckgrbeck Posts: 2,361
    nippononly: yeah, but why is "I want high fuel economy in my next car" the "right" answer? This is America, land of the free, of wide open spaces, of the most gas-guzzling vehicles in the automotive universe! Isn't it every American's right to guzzle gas unabashedly? I sound sarcastic, but I am not trying to be.

    But that sample was drawn from Consumer Reports readers, who may not be representative of society as a whole.

    If someone subscribes to Consumer Reports, I would argue that he or she has ALWAYS been concerned about fuel economy as a way to save money. The whole point of the magazine is to get the most for your purchasing dollar, and for lots of people - myself included - pouring lots of those dollars into the gas tank isn't the best use for them.

    On the other hand, I'm quite happy with the economy of my Accord EX with four-cylinder and automatic, and I wouldn't be willing to sacrifice any performance, room or comfort for a few more miles per gallon. If gas gets too expensive, I'll just walk more, which will undoubtedly be good for my waistline.

    Not everyone is going to save gas by buying a 50-mpg minicar. There are many other ways to cut gas consumption. Vehicle choices, like everything else in life, represent a series of trade-offs - except for billionaires who can buy whatever they want - and different people have different priorities.
  • nippononlynippononly SF Bay AreaPosts: 12,692
    April MT reports the results of a survey done by Directions Research Inc, in which 39% of the respondents ranked "gas prices" as a primary factor in their next new-vehicle purchase.

    Will any of those 39% be buying the new GM trucks with the EPA rating of 15/21? Hard to say. Maybe they will consider gas prices at the moment they buy, and if gas isn't spiking at that moment they will go ahead with another guzzler, who knows.

    2 years into the model run, my local Toyota dealers still can't keep the Prius in stock, despite Toyota corporate ads to the contrary. 47 mpg is definitely a lure for some. It creates a great "green" halo, regardless of the reality of Toyota's fleetwide average.

    GM and Ford could have chosen to take this path years ago, but opted instead for large trucks. I think an entrenched majority at their executive suites honestly believe that the future of those companies is in trucks, not cars, and it's therefore OK to let the car fleets flounder.

    Meanwhile, Chrysler, the only one of the Big 2.5 NOT to make a big fuss about it being the "Year of the Car" or whatever, is quietly going ahead with a car renaissance that is impressing the press and earning lots of sales. The Caliber is the latest effort, using a CVT for most configurations and pulling about 30 mpg combined, a decent figure for an automatic. Now to see if it sells. Will it become a fleet special, as the Neon was?

    In the meantime, Chrysler Group cars are not stand-outs on the fuel economy front, so now they need to take the next step. After transitioning from a truck-heavy base (including the minivans) to a balanced fleet with cars people actually want (a transition that is not yet complete - let's see what happens with the Sebring/Stratus redo, and whether or not they bring something smaller to the States like the Smart cars), they have to improve the FE of the cars they have.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • boaz47boaz47 Posts: 2,750
    we will always gravitate to what "other" people should do. Manufactures, we often point out, should be less concerned with profit and more concerned with what is good for us? But what would have we grown up in? Do any of us what the smallest house we can buy? Do any of us wear our clothes out till they fall apart before we buy a newer style?

    There is theoretic and there is real world and real world often frustrates people like us, enthusiasts, or any form. It doesn't matter what we are enthusiastic about someone else will be doing it all wrong. If we are performance enthusiasts then economy enthusiasts will want to pass a low limiting our enthusiasm. But in America we make real statements with out wallets. We put our money where our mouth is and that is hard to do from a purely political point of view. It is correct that we will tell anyone doing a survey what we feel they want to hear. But SUVs didn't take over 50 percent of the market because we told the survey people we were interested in fuel mileage. The manufacturers didn't make the large number of SUVs and Trucks because we were buying Metros and Echos. They make SUVs and bigger trucks because that is what we buy.

    Ahh the political, morally, environmentally correct police will say, we can simply pass a law that will force those who aren't thinking like we do to buy what we feel is best. But politics has a bad habit of coming around to bite us in the back end. We vote a champion into office that does get such a law passed and a few years down the road the enemy out votes him, out spends him and "they" elect someone that overturns our idea of common sense. More FE cars will only be profitable when the market says they are. Other wise a loop hole will be found and people that can afford it will bypass the effort the "true profits of correctness" and get what they want. The greenies have had their day and scream loudly when they take a beating at the dealerships. CAFE was the greatest thing since sliced bread when it started but when people saw the promise of Mini vans and SUVs as a way to get passed it they jumped on it. Now the new question is, how do you change the hearts and minds of people that don't agree with you?

    GM, Ford, Chrysler, Toyota or any other manufacturer would be a fool to go against what people are buying and follow the path of what a zealots feel they should make. If we expect them to make more FE cars we have to buy more on our own, not because we are forced to. If you have stock and sat on the board of one of these manufacturers I think you would agree.
  • gagricegagrice San DiegoPosts: 29,028
    2 years into the model run, my local Toyota dealers still can't keep the Prius in stock, despite Toyota corporate ads to the contrary.

    Sales figures do not reflect the supposed success. It looks more like Toyota is waffling on the manufacturing end. They only sold 6500 Prius last month. Are they creating a shortage to keep up the green image while they build more factories for gas guzzlers like the Tundra.

    If GM or Ford created shortages like with the Prius the media would be all over them. Toyota is playing the American public like a fine violin.
  • nippononlynippononly SF Bay AreaPosts: 12,692
    I appreciate your perspective, but let's not forget that right now Toyota is selling a Prius for every Tundra it sells. Not too bad. It sells a Corolla for every SUV in the fleet all the way down to the RAV4. So it's balancing things out.

    As Tundra sales rise next year, Toyota will also be selling more hybrid models, including 30K Camry hybrids for starters...not to mention the straight gas 4-cylinder Camry does a combined 30 mpg or so all by itself, and accounts for more than 300K sales per year too.

    By contrast, truck sales of models averaging 20 mpg or less run 60-70% of the fleet, occasionally more, at Ford and GM.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • gagricegagrice San DiegoPosts: 29,028
    As Tundra sales rise next year, Toyota will also be selling more hybrid models

    And if they sell 250k Tundras as planned and only 150k hybrids, does that make Toyota as bad as GM & Ford?

    PS
    So far this year Toyota has sold 35% more Tundras than Prius. I did not compare all the other models. The Tundra does not get very good mileage.
  • boaz47boaz47 Posts: 2,750
    And we might want to consider that Toyota makes a profit on every Tundra they sell. I still doubt if they make a profit on the new Prius. So if you are taking a loss it hardly makes much sense to push the Prius very hard. If they sold as many as they do Camrys the company might be in the red. And with their capacity they could produce just as many Prius, (would that be Priusi or Priui?) as they do Corollas.
  • nippononlynippononly SF Bay AreaPosts: 12,692
    well then yes, there's the profit motive too. I think it is very presumptuous for anyone not working for Toyota to state as fact that they are not making money on the Prius, (this is not specifically directed at you, boaz, there are lots of people posting this "fact" at Edmunds, and tons of speculation in the industry) when Toyota states they are. I have no doubt profit margins are slimmer than they are on the Tundra, yes. But then, thinner profits are why GM and Ford have totally neglected their car fleets for more than 15 years, and has THAT really been a wise long-term move?

    As for production capacity, one should not assume that they could easily make more Prii. The constriction in that pipeline has always been and remains battery supply. Panasonic was supposedly going to be doing a major ramp-up in their output to supply Toyota and other manufacturers with more. This should be showing some fruit in the next year or two. Maybe Toyota should just get into battery manufacture itself, but until they do, the batteries are limited. The same limitations are being forecast for the first year of the Camry hybrid run. There are only so many battery packs to go around, so to speak, so you have to apportion them as you introduce new hybrid models.

    gagrice: I was going by calendar year sales in 2005. Toyota has now put big cash incentives on the Tundra as it is in its last nine months of the model run. That may be spurring sales. It is my contention, far from FACT of course, that a whole calendar year is much more telling than a month or two. YMMV.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • boaz47boaz47 Posts: 2,750
    The estimated profit deficit on the profit Toyota makes on a Prius is reported, as you say, by many inside of the industry. Toyota freely admitted to this problem with the first generation Prius as you well remember. I can't believe the second generation Prius cost less to build and sales have not reached the point where volume should be much of a consideration. The Tundra however has lots of room for profit so the stock holders would be much more impressed with the reporting of those sales I am sure. Stock holders very seldom have much of a social conscience when personal profit is concerned.

    By the way how has the weather been treating you? The Lake Arrowhead area has been socked in with two to three feel of snow all weekend. I have had more time for the computer than I had had in months. We haven't had snow like this in ten years. One draw back to selling my 4x4 I guess. But then I have lots of vacation and sick time so I can stay home. It looks like I will be getting one of my old F-250 4x4s back soon however. The kid I gave it to bought a new truck and wants to give it back to me. It will need some work, he put in a new C-6 and transfer case but it doesn't match the front cross member so I will have to fix that. But for a local hauler to go to the dump and get planting things it should work well. 460s will run almost forever even if they take massive amounts of gas to do so.
  • nippononlynippononly SF Bay AreaPosts: 12,692
    Actually, they were asked the question directly, before the debut of the second-gen. At the time they stated they had crossed the threshold to profits on the first-gen Prius about a year before its run was up, and that at estimated sales of 50K per year, they would turn a profit on the second-gen (the current model) within 12-18 months.

    Well, as you know, they sold twice that many. That was their answer. Is it really an important enough issue for them to lie to the press about it? Why?

    As for snow, whew! We've had snow at bay level here three nights in a row now. Sea level snow is something that happens in the Bay Area like twice in a century. Unfortunately, the second night some people paid dearly for the weather - two fatalities in a 28-car pile-up that happened at 2:30 AM because rain suddenly turned to snow in Sausalito - right across the Golden Gate from San Francisco!

    I like the rain, can't get enough, but I've had more than enough snow.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • gagricegagrice San DiegoPosts: 29,028
    Is it really an important enough issue for them to lie to the press about it? Why?

    I think so. They do not want the stock holders to get in a panic and sell. You do remember that Cho was dumped right after they showed something like a 10 billion dollar profit. This was the same time the other automakers were saying they did not want to build cars that were loss leaders. They also would lose face in Japan if they were selling cars at a loss. Lots of reasons to lie to the public.

    I personally think Toyota is pleased that the other hybrids are not selling that well. If they wanted to sell more the automakers can ramp up production a lot faster than 3 years. I believe they are keeping the production low to increase the marginal profit in each car sold. If sales fall off you will not see them stacking up like other cars. Too much chance they will lose more than they would on a non-hybrid vehicle. Hybrids cannot sit for 6 months on a dock or in the lot without suffering battery damage.

    Getting back to GM & Ford. I think Ford is waffling on the promise of LOTS of hybrids. They are not selling the two they make. Are they unveiling any new ones soon? As far as GM and the VUE hybrid. Well Saturn never has made GM money. I have no idea why they hang onto the brand.
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