The Current State of the US Auto Market

dieselone · September 2013

"but you didn't buy one because a newer model is due out next year?"

That wasn't the only reason, but was certainly part of it. A year or so ago when I test drove an ecoboost f150 Lariat and I liked it alot. It's a very good truck and it's obvious why they sell so many. I have several friends with them that are happy. Honestly, the rational thing would have been to buy an F150. I decided to spend more and get what I liked better.

I'm not particularly brand loyal and I simply liked how the Ram drives and looks, inside and out. It has a bit more attitude that I like and as much as I like the Ecoboost v6, the Hemi sounds so much better;).

Truth be told, I bought the Ram for the longer warranty;) LOL

greg128 · September 2013

"Chevy is a low-end, baseline, cheap, noisy, vibrating and harsh car that runs pretty well"

I find the engine in my son's 2007 Cobalt to be smoother than the turbo 4 in my cousin's RDX. . There is a vibration at idle that reminded me of my old VW Rabbit. I can understand why Acura replaced it with a V-6. The Cobalt is also quieter on the highway and rides better.

uplanderguy · September 2013

Furthermore, greg, the guy puts words in my mouth never once used in this forum by me.

With "banker" in his name, well....you know.

I brought my daughter's "new" '09 Cobalt home today. Real nice, quiet, tight little car. Drove it 124 miles home.

berri · September 2013

I always thought that new car trim was just shiny plastic. Today I was watching a Modern Marvels show on cable about chrome and lo and behold, they actually chrome coat some of that plastic trim. Didn't know that and wouldn't have guessed it either.

uplanderguy · September 2013

Big recall today, expanding on an earlier one:

http://autos.aol.com/article/toyota-recall-rav4-lexus-hs/

circlew · September 2013

Right now, in the U.S. automakers are churning out cars like crazy. There certainly is some risk there that, on the one hand, they could be stuck with a lot of inventory. On the other hand, even if they're not, what is there to build future growth on? Really, the only thing to build future sales growth on is to do a better job of satisfying customers. You've got win over some of those purchasers of Asian brands and European brands.

LOT's of work for some manufacturers that buried their heads in the sand for decades.

uplanderguy · September 2013

Again (sigh)--what is the yardstick? New car quality after 90 days? Sales satisfaction? Satisfaction after 3 years? What?

Interesting to note, regardless, that there is only an eight percentage difference between the lowest (low-priced brand incidentally) and the highest (high-price brand incidentally).

imidazol97 · September 2013

I'm sure that Cobalt will work out for you. I still think it's the perfect car. Since my son has latched onto my black Cobalt, I would like to replace my 98 leSabre. But it only has 200K mi (in 1300 more miles), so there's lots of good miles left there.

The Cobalts ride and drive so nice and quietly,
I had looked really hard at a one owner local 60K mi 2010 with a 2-year GMPP extended warranty through the dealer. It was just the wrong color and it was a 1LT and I'd like to have had a 2LT for the high price they were asking. It wasn't too much of a step to buying a '13 Cruze LT or +.

But I really had to push away and think about what I want and what I need to buy. I still think the Malibus that are from fleet and rentals are the best buy. I'm expecting some to return to retail sale as the toyotas flood the rentals along with all the HyKias.

lemko · September 2013

A good friend of mine just bought his daughter a silver 2007 Cobalt coupe.

andre1969 · September 2013

Interesting to note, regardless, that there is only an eight percentage difference between the lowest (low-priced brand incidentally) and the highest (high-price brand incidentally).

Yeah, if that was put into, say, high school grading terms, that would be like the worst kids getting a C+ (I think those lowest ranks are actually around 78-79%) while the cream of the crop is getting a B+. So while I'd like to see the "problem children" do better, at least there is hope.

Now if the best was getting somewhere in the 95% range while the worst were below 70% or so, then I'd worry.

dieselone · September 2013

I agree andre. Not really a huge difference between the best and worst.

I went out on a limb and bought a Ram. I simply like it more than the other pickups. If I wanted the most reliable truck, I would have bought a Tundra. If I wanted the best mileage I guess Chevy is the way to go (v8 anyway), and for performance/towing/hauling, the f150 is probably the best bet.

I simply don't care for the Tundra, great powertrain, but the rest of the truck doesn't do anything for me. I don't like the styling of the Chevy inside and out (personal preference), and while I do like the f150, they're everywhere and they're a bit dated now.

Honestly, as soon as my wife and I hopped into the Ram Laramie and took it for a drive, we were sold. I simply love the interior. It's comfortable, and I feel like could get in it and drive all day.

An update of FE, this week I've driven 111 miles, averaging 20mph (been dropping off and picking up kids at school), and it's been in the mid 90's, so I've been idling some while in line. I'm averaging 13.7mpg, which I'm satisfied with. The same scenario in the Expedition would have been 11-12 mpg, maybe less. Overall I've got 400 miles on the Ram and my average has dropped to 15.8 overall this week.

Mr_Shiftright · September 2013

Exactly. What's the "average" bar really set at anyway? "Average" could in fact be "very mediocre", with the highest ratings not much more than "high mediocre" therefore.

crkyolfrt · September 2013

Is your Ram a 2WD or 4x4? It's an extended cab, but not a full 4 dr 6 seater right?

I'm curious about the process when it goes from 4 cyl to 8. What speed on the hwy with A/C on will it do this? Do you happen to notice if there is a more common gear that it's in when it does this more often? What about around town? If you do not drive aggressively, does it basically drive around on 4 cyl all the time?

Does anyone know if these MDS engines have some big miles on them yet without any longevity issues whatsoever? Honda, for example seems to have some teething issues with their V6 and I think they have ever since they offered one. The issue I hear now is oil consumption, but not sure how widespread that is. If it is only a few isolated cases, then seems odd to me. With oil consumption issues, you would think that there is a design problem that would involve huge numbers unless it was a faulty part that can be zeroed in on from a specific batch of lot/VIN numbers.

dieselone · September 2013

I've got a crew cab, 6'4 bed 4x4 which seats 5.

As far as MDS goes. It seems to kick it any time your light on the gas up to about 70 or so regardless of the a/c being on.

I particularly notice it at slow speeds under 30 because it has a funny burble from the exhaust when it kicks in at low rpm. So I notice it kicking in more around town than at highway speeds. Under 70mph it goes to 4cyl mode anytime the terrain is flat and at a steady speed. I've even noticed it in 4cyl mode at low speeds while gently accelerating.

I seem to be getting 21-23 mpg on the highway if I stay under 70 running about 1,500 rpm or so. Driving in town it rarely goes over 2k rpm with light throttle. I'm amazed at how quick and smooth the transmission shifts while accelerating. It doesn't seem to reach 8th gear until about 50mph or so.

It appears the hemi and gm engines with MDS/DOD are reliable. I've heard of many of these engines capable of very high mileage.

Yeah, honda has had issues. The v6 in my dad's 09 Accord has been taken apart twice for oil burning issues. Seems the problem is more likely if driven in a manor that MDS kicks in a lot. That may explain why it seems to be more of a problem in the Accord vs. the Pilot or Oddy.

uplanderguy · September 2013

I hope she likes it. The one I picked up yesterday had 6K more miles than the ad showed, and the seller gave me $500 more off because of it. So I have an '09 with auto, cold AC (and boy did I need it yesterday), CD, FM, PW, PDL, 57K miles, new brakes in June, good tires, for $5,501.00. Three months left on the 5 yr./100K powertrain warranty (includes cooling and wheel bearings as well as engine and trans). I wish I could've found one built in August '09, but can't be too choosy.

dieselone · September 2013

IMO, that's a smoking deal!

imidazol97 · September 2013

> I wish I could've found one built in August '09, but can't be too choosy.

How did you find this one? That's a great price.

ohenryx · September 2013

Several people have already pointed out that there is only about an 8 points difference (possibly 9) between the best and the worst. My biggest problem is with the way the graph is laid out, or "scaled".

If the person creating the graph had chosen to show a range of 0 to 100, then the differences would be very hard to see. Very hard. Instead, he (or she) chose a scale of 74 to 90. This tends to accentuate the differences, out of proportion.

It could have been worse. Choosing a scale of 78 to 88, for instance. The bottom two would be very, very small. Tiny even. Whereas the very top one entry would have been gigantic.

This is an example of what I call "lieing with numbers". Or, as Mark Twain said, "Lies, damn lies, and statistics".

uplanderguy · September 2013

The Cobalt was on eBay. It was the only one I noticed that didn't have a reserve and ended in the middle of a weekday workday.

The seller told me they have 30 Cobalts to list and mine was one of the first.

It was a fleet car, but he was able to include with the car the maintenance records back to the beginning.

busiris · September 2013

GM tried unsuccessfully to sell Opels as Saturns, so it looks like its Buick's turn at the wheel...

http://www.usatoday.com/story/money/cars/2013/09/11/reviewed-opel-concept/279890- 3/

berri · September 2013

In the 50's and 60's Buick dealers often sold Opel as well as Buick. Might make more sense to sell some of this Opel stuff as an Opel rather than downgrading the near lux image they have tried to give the Buick line. I can only see things like this tiny coupe and Encore bringing Buick's consumer image lower - contrary to what I thought GM's goal was with Buick going more upscale???

Mr_Shiftright · September 2013

Buick *is* upscale in many foreign markets. Foreign buyers have no idea of Buick's history or reputation.

berri · September 2013

But the bulk of the profits still come from the NA marketplace.

tlong · September 2013

I find the engine in my son's 2007 Cobalt to be smoother than the turbo 4 in my cousin's RDX. .

Well I hope it's smoother than the turbo 4 in the Cruze I rented recently. Talk about a growler.

uplanderguy · September 2013

The 2.2 in my Cobalt is literally so smooth at idle, one cannot tell it is running. That is no joke.

So it was a Turbo you rented? I seem to remember correspondence here where you weren't sure it was a 1.4 or 1.8, but I don't recall for sure.

imidazol97 · September 2013

> you weren't sure it was a 1.4 or 1.8,

Odd, how if an engine makes noise while someone's driving it in a US branded car that is awful. If a Honda or toyo makes noise while being driven in the same way, it's quality. Gotta love 'em. God bless them.

I have to admit that my 3800's make noise while running. Especially if driven more aggressively than I usually need to accelerate, I can actually hear the exhaust. However, I could hear the neighbor's Acura(s) when he would acclerate gently down the road from his driveway, and those are V6's. Of course, Honda's having some troubles with their VCM so maybe that's the excuse.

robr2 · September 2013

But the bulk of the profits still come from the NA marketplace.

I'll disagree.

Buick sells about 2.5 times the number of vehicles in China than in the North America.

August 2013:

North America: 27K units
China: 68K units

berri · September 2013

But are you sure about the profit margins? New plants over there, much lower selling prices> I'm sure their cost of goods sold is lower in China, but it still has to absorb corporate overhead and the Chinese labor rates have been sky rocketing lately.

But the biggest risk I think is when China steals their technology, plant operational capabilities and processes, and drawings. Then the state will facilitate a Chinese firm to build similar product cheaper with gov subsidies and eventually erode Buick over there. China may act capitalist, but the gov is Communist which means in economics they are still thugs. By the way, where is the Chinese bailout money for GM?

robr2 · September 2013

But are you sure about the profit margins?

No I'm not and since GM doesn't tell us, we have to make some assumptions. I can make an educated guess that when one is selling 2.5 times more product, it takes quite a bit of additional cost to reduce GP that much.

The Buck Excelle is the top selling car in China - it's the Verano here. They sold 250K of them in 2012. The US Equivilant is the Verano and they are on target to sell 50K this year.

Let's assume 10% gross profit.

Excelle: 250K x 16K base price x 10% = $400 million.
Verano: 50K x 24K base price x 10% = $120 million.

It may not be perfect, but it's an educated guess.

But the biggest risk I think is when China steals their technology, plant operational capabilities and processes, and drawings. Then the state will facilitate a Chinese firm to build similar product cheaper with gov subsidies and eventually erode Buick over there.

Yes that happens in China but the one thing they can't copy is the Buick brand. It's the top selling auto company in China and is popular among the affluent and upwardly mobile Chinese. Keep in mind that the Chinese favor American brands often eschewing cheaper Chinese brands for names such as Ethan Allen, Apple and Pampers.

dieselone · September 2013

"I have to admit that my 3800's make noise while running. Especially if driven more aggressively than I usually need to accelerate, I can actually hear the exhaust. However, I could hear the neighbor's Acura(s) when he would acclerate gently down the road from his driveway, and those are V6's. Of course, Honda's having some troubles with their VCM so maybe that's the excuse. "

The 3800 we had sounded and felt crude compared to any Honda, Toyota, or even the the 3.5 Duratec in the Taurus.

When I ride/drive in any Honda/toyoa v6 vehicle, I always notice right away how much smoother they are comparedthan the domestic v6's I've sampled. My MIL's Camry v6 with 200k miles is noticeably smoother and quieter than my wife's Taurus. Same goes for my dad's v6 Accord. I now some people aren't as sensitive to those areas as I am and I realize that alone don't make the asian makes infinitely better. As I've posted a few times, my dad's '09 Accord V6 has been torn apart twice of VCM oil consumption issues.

What's weird is the 3.5 in my wife's '13 Taurus doesn't sound as refined as the one in the '11. Particularly at idle, it's not nearly as quiet. I know Ford added independent variable valve timing on the intake and exhaust cams. Which ironically make the engine feel a little more peaky. It seems a bit slower at lower rpm, but once it revs past 4k it will pull pretty hard.

xrunner2 · September 2013

There is absolutely no question but that, overall, German and Japanese auto manufacturers have the smoothest and most sophisticated engines. Probably now for 25-30 years. American brands have been playing catch up.

berri · September 2013

I know you can play all kinds of accounting games based on taxes, etc. But I doubt that Chinese vehicles have the same profit margin rate as domestic ones primarily because they are still absorbing the higher fixed costs from the relatively new plants they are being built in. The other issue that comes into play is product mix. For example, Buick is selling a lot of high margin Enclaves here that I'm sure bring in substantially more profit margin than a Verano. I do agree about the current prestige factor of a Buick in China, but remember there was a time when brands like Buick and Cadillac had prestige in the US too. I think some brands like BMW may already be cutting into Buick's prestige factor over there as well.

Mr_Shiftright · September 2013

you'd think so, but not according to this article:

http://www.businessinsider.com/why-chinese-buyers-love-buick-2013-4

tlong · September 2013

So it was a Turbo you rented? I seem to remember correspondence here where you weren't sure it was a 1.4 or 1.8, but I don't recall for sure.

I had taken a picture with a coworker which I saw later and the car was in the background and the Cobalt was an LT. I believe that's a 1.4 turbo, correct me if I'm wrong.

tlong · September 2013

Odd, how if an engine makes noise while someone's driving it in a US branded car that is awful. If a Honda or toyo makes noise while being driven in the same way, it's quality. Gotta love 'em. God bless them.

You're conveniently pretending that there is no difference. I have had a VW, Honda, and Mazda with 4 cyls that were much less harsh than the Cruze I'm comparing to. As an aside, I just had an Altima rental (4 cyl I presume) and it was fairly bad, too.

Mr_Shiftright · September 2013

Well there is 'engine song" and "miserable thrashing sounds"---however, you are right in that this is a very subjective type of rating. Porsches and Ferraris are noisy, for instance.

Michaell · September 2013

I believe that's a 1.4 turbo, correct me if I'm wrong.

The Cruze LS has the 1.8L NA engine; the LT1, LT2 and LTZ all have the 1.4L turbo.

I've got the cousin to uplanders Cobalt - Saturn ION - with the 2.2L Ecotec. Good engine, reasonably quiet. Getting 25-27MPG on mostly city driving.

95K on it and going strong.

robr2 · September 2013

I know you can play all kinds of accounting games based on taxes, etc.

Trying to do the best I can making educated assumptions. If you have more specific data, please share. China outsells NA by 2.5 times. In order for North America to out earn China would mean that that the Chinese models have to be 60% less profitable. I highly doubt that is the case.

For example, Buick is selling a lot of high margin Enclaves here that I'm sure bring in substantially more profit margin than a Verano.

And in China Buick is selling a lot of high margin GL8 mini-vans that high powered business executives prefer to drive. Those retail for $45-60K.

I do agree about the current prestige factor of a Buick in China, but remember there was a time when brands like Buick and Cadillac had prestige in the US too. I think some brands like BMW may already be cutting into Buick's prestige factor over there as well.

Buick is playing in the premium segment and targets upwardly mobile professionals. BMW is in the luxury market which is where Cadillac is trying to play - and not doing too well. BMW does well with the 5 and 7 series as their target customer has a chauffeur.

stever · September 2013

high powered business executives

Gee, I'd fit right in. I should apply for one of those "token" American jobs to lend credence to some GM supplier over there.

anythngbutgm · September 2013

"Odd, how if an engine makes noise while someone's driving it in a US branded car that is awful. If a Honda or toyo makes noise while being driven in the same way, it's quality. Gotta love 'em. God bless them"

The only thing "odd" here is your generalization...

By your logic the sounds made by a Mack truck and a Yamaha motorcycle are equally pleasing/displeasing?

Try revving out a J-series Honda V6 sometime, it's smooth, refined and linear and doesn't sound like it's going to explode.

http://www.youtube.com/watch?v=IVA1zuQ-IgA

http://www.youtube.com/watch?v=RXNOFmBCy7Y

Conversely, "Try" and rev out a 3800 for instance (I mean "try" because anything over 4 grand sounds like a cement mixer with marbles in it IMO).

http://www.youtube.com/watch?v=cjOAQ5rijqg

http://www.youtube.com/watch?v=FapMOd27_0k

And add a Supercharger?

https://www.youtube.com/watch?v=4z7C117Ka2I

andres3 · September 2013

I've heard Chinese Buicks are better than American Buicks. More like Cadillac, less like Chevy here in the US.

If those reports are true, then comparing Buicks sold over there to Buicks over here makes no sense.

berri · September 2013

robr, given the data you've provided I agree that Buick may be making more profit dollars in China as you've postulated. However, for the various reasons I've already stated I still doubt their profit margin (percentage) is as large over there yet. Although I expect down the road it will exceed the NA margins.

As for the US market, I still believe that all of this potential Opel stuff is just going to confuse what Buick really stands for. I've never been a real believer in the marketing theory about buyer loyalty. I don't think there really is all that much of it today. Consumers aren't always honest on marketing surveys. The Proctor & Gamble model may claim Tide soap buyers are loyal for example, and they may be when the market is in homeostasis, but ask store managers what happens when sale prices or coupons give a competing brand a noticeable price advantage, let alone product innovations. Cars cost an awful lot of money compared to soap, so I just really doubt there are all those many "loyal" customers who restrict their vehicle purchase to a single brand or company. Studies have already shown the younger generations aren't very brand loyal, but I think if you dig into it with the Boomers vehicle history you'll find much the same. So why hose up Buick's market image looking for that future elusive "buyer loyalty"? Think about what happened to Mercury and Pontiac when they ended up trying to be all things to consumers at a premium price. First, not enough buyers would pay a premium for the confused image and then both lines went out of business.

andres3 · September 2013

Part of what makes people opt for cheaper product is that they don't know any better.

Until I really seriously test drove BMW's and Audi's, I didn't get why people wanted those underpowered slow-mobiles (back in the 1.8T and 325i days).

I got the Honda with a 240 HP V6 instead of a lesser powered higher cost BMW inline 6.

While the Accord Coupe was a great car, it never inspired me to seek out curvy back country canyon carving roads as did the A3.

Suddenly, I got it (though I still don't like being underpowered or outran by a V6 Camry).

robr2 · September 2013

Perhaps the Adam isn't going to get a young buyer to come back and buy another Buick. But we need to keep in mind that young buyers today don't care about cars - owning and driving them are a necessary evil.

But they do like fashion and technology and if the Adam is fashionable and techie enough, they just might buy it and keep coming back for new Buicks because it's easy.

I still believe that all of this potential Opel stuff is just going to confuse what Buick really stands for.

What do you think Buick stands for?

Remember, Buick is targeting young professionals looking for a premium car. They don't know that Opel is a middle of the road brand in Europe. All they see is that Buick is offering a higher end car with nice features.

berri · September 2013

I see Buick as near lux, not that different from you. But I think in the NA market near lux is still something fairly roomy and comfortable. I don't see that in Encore. For that matter, you notice that MB didn't put their badge on Smart vehicles either. Encore has apparently done OK out of the gate, but let's see what happens next year after the newness is gone. Maybe the biggest warning though is that Lincoln is talking about bringing out small vehicles and I don't think that brand has made a smart move in decades! Seriously, Verano is also doing OK, but I suspect more than a few lookers end up paying around the same and getting a loaded Fusion or Camry instead. Paying extra means you want some status and you aren't going to get that in the US with a dink-mobile.

berri · September 2013

I totally understand where your coming from on the German vehicles makes you're talking about Andre. It is hard to beat that handling and road feel if that is what you are looking for. Of course not everyone can afford it, or have the road terrain to utilize and fully appreciate it. But that really gets to the point I'm trying to make, if you are going to charge a price premium you have to provide the buyer a reason to pay it.

stever · September 2013

What do you think Buick stands for?

Well, it may not stand for "Big Ugly Import Car Killer" much longer if GM starts bringing them over from China.

robr2 · September 2013

For that matter, you notice that MB didn't put their badge on Smart vehicles either.

That's because Smart was a joint venture between Daimler and Swatch. It was originally called Micro Compact Car AG. The Smart name is made up of the following:

S for Swatch
M for Mercedes
ART for art.

berri · September 2013

That may well be, but MB didn't seem to go out of their way promoting their association with it in the US, and it turned out to be a wise decision. After initial curiosity, the far fell flat here. Now how is bringing over a bunch of small Opel products that are at best blah and mediocre in Europe going to spell a great growth opportunity for Buick in NA? I still think it's going to end up diminishing Buick's consumer perception over time in NA. Regal sure hasn't done much for the brand.

crkyolfrt · September 2013

I am surprised the number of conditions and how willing it is to stay on 4 cyl. Impressive. I assume that cylinder wash down doesn't happen, is controlled by turning those fuel injectors off on the non-firing cylinders?

Also impressive that this system has proven to have good longevity.

But wow these trucks are expensive. Now granted I'm in Cda and as you know we really get ho**d when we buy a new vehicle here, but get this:

Yesterday I priced this relatively humble truck online. Its only standout options were the MDS hemi, the 8 speed, and I made it a 4x4.

- standard cab, no extended
- carpet instead of vinyl floor
- cloth instead of vinyl seats
- Class IV hitch
- and spec'd the trim level just high enough to have the aluminum rims, which was part of the carpet and cloth

This thing was like 34000k dollars! Plus TTL etc etc. It claimed that was the price AFTER a $7000. discount! Forget the name of the discount.

That is just crazy! An extended cab was like another 5600. Luxuries like leather and heated seats and entertainment center, just sent the truck through the roof. Just for the half-ton you can spend 55k in the blink of an eye!!

Your Laramie must have been well up there. I'll bet it really is a treat to drive.

Oh, also, I spec'd the 8' box over the 6'4". Even that spec alone was like 2300. frig dollars just for another 20" of WB and a bit of extra box metal. Ridiculous, IMO.

I guess the prospect of having a truck once again (I have managed... but with deliberate effort and trailers for many years now without one) does entice me a little. The fuel cost tho offsets the wonderful seating position etc. As a diesel fan, naturally I have been trying to stay apprised of any news regarding the V6 diesel that is coming out this fall, hooked to that wonderful 8 speed. But when you consider the humble truck I spec'd above, and add another 4k + maybe, for the diesel, who can afford it?

The Current State of the US Auto Market

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