Industry News: The Great Disappearance of Affordable American Cars

[William Maley]

It is already tough for a number of people to afford a new vehicle as the average transaction price keeps rising. According to Kelly Blue Book, the average transaction price for November rose 2.1 percent to $36,978. This isn't being helped by American automakers deciding to stop producing cars due to changing consumer tastes. This was brought to light last week when General Motors announced that it would be cutting a number of cars including the Chevrolet Cruze. Most automakers and dealers believe consumers will move towards utility vehicles, but some dealers believe that consumers may defect from American automakers because they don't offer the vehicle they are looking for.

Chad Martin, a Bowling Green, Ky., dealer tells Automotive News that consumers feel the "affordability pinch" when automakers decide to drop cars to focus more on utility vehicles. For the most part, consumers "generally seem to be shopping for a particular type of vehicle, such as compact cars." Remove them out of your lineup and consumers are likely going to look elsewhere.

"What this is going to mean is, you're going to see a somewhat higher defection rate because you don't have the product lineup that particular consumer wants," said Martin.

Another big hurdle facing consumers who want to stick with the domestics is pricing. Martin explained that there is more than a $5,000 difference in pricing between compact crossovers and compact sedans. 

Obviously, the consumer is going to have to absorb that $5,000 difference," said Martin.

The numbers from Kelly Blue Book tell the story.

• Compact Car Average Transaction Price: $20,458
• Subcompact Crossover/SUV Average Transaction Price: $24,210
• Compact Crossover/SUV Average Transaction Price: $28,765

Jeremy Acevedo, Edmunds' manager of industry analysis agrees with the sentiment said by some dealers that consumers loyal to a segment may look elsewhere.

"It's easy for shoppers to move from a Cavalier to a Cobalt to a Cruze. But it's a whole different ballgame moving from a car to an SUV."

Source: Automotive News (Subscription Required)

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[G. David Felt]

I am wondering if we will see new affordable CUVs in the subcompact segment from GM that are VOLT powertrain or EVs.

I want to believe that GM is not going to truly abandon people looking for that 15-25K dollar auto.

[ccap41]

Volt powertrain and affordable haven't gone hand-in-hand yet. I don't see it coming too soon. 

[G. David Felt]

Just now, ccap41 said:

Volt powertrain and affordable haven't gone hand-in-hand yet. I don't see it coming too soon. 

I expect a Volt Powertrain CUV to show up this year and then as they build, expand to other auto's while lower cost. I can honestly say I just do not understand how GM has not had a subcompact and compact plugin hybrid using this powertrain yet. Truly losing sales to Toyota.

[ccap41]

There's less than a month left in the year.. I don't expect to see one in the next 27 days. 

[Robert Hall]

Maybe we will see an EV CUV or Hybrid CUV at Detroit or NYIAS in 19.   Maybe something from Chevy and something from Cadillac? 

[smk4565]

A Volt SUV would be $40k base, look at what other SUV’s cost.   Most car makers don’t care about the entry level, they want to sell high margin SUV’s only.  Then they can cut the workforce that builds the cheap cars and save even more money.

[Drew Dowdell]

1 hour ago, ccap41 said:

Volt powertrain and affordable haven't gone hand-in-hand yet. I don't see it coming too soon. 

There is nothing technologically remarkable about the drive part of the Volt's powertrain, it's all in the batteries.  

14 minutes ago, smk4565 said:

A Volt SUV would be $40k base, look at what other SUV’s cost.   Most car makers don’t care about the entry level, they want to sell high margin SUV’s only.  Then they can cut the workforce that builds the cheap cars and save even more money.

A Niro PHEV is $28.2k base and $36k absolutely loaded.  It should be the template for a Volt crossover.   The Volt would be a bit more expensive than the Niro though as it has more batteries and range.

[ccap41]

18 minutes ago, Drew Dowdell said:

There is nothing technologically remarkable about the drive part of the Volt's powertrain, it's all in the batteries. 

Wouldn't that be a part of the system, as a whole? 

[Drew Dowdell]

Just now, ccap41 said:

Wouldn't that be a part of the system, as a whole? 

Not really, no. The batteries can be increased or decreased in size as much as cost and space allow.  Chevy could drop the price of the Volt by making a LowVolt version with half the battery.  It would probably take $5k off the price in exchange for a 25+ mile EV range instead of a 50+ mile one.  That would put it pretty much in line with the Pruis Prime in both range and cost. 

[frogger]

Good thing the Trax is such a looker.

 

[G. David Felt]

@ccap41 @Robert Hall When I say this year, I am talking this auto show season which pretty much is over the next 3 oncoming months.

[riviera74]

The other problem with the lack of affordable small cars is that this part of the market is owned by Toyota, Honda and Hyundai/KIA.  Should GM and Ford do better? Yes, but those sales are not what they were five or ten years ago.

A Volt CUV would be fantastic though.

[A Horse With No Name]

20 minutes ago, frogger said:

Good thing the Trax is such a looker.

 

How many states have legalized weed and do you live in one of them?

[frogger]

27 minutes ago, A Horse With No Name said:

How many states have legalized weed and do you live in one of them?

Haha Canada has legalized weed but my vape has been in the basement somewhere for about a decade.  As bland as the Cruze is, it is still more palatable to me than a Trax.

 

 

[G. David Felt]

37 minutes ago, frogger said:

Haha Canada has legalized weed but my vape has been in the basement somewhere for about a decade.  As bland as the Cruze is, it is still more palatable to me than a Trax.

Hail Canada, a Land we export weed too! 

[A Horse With No Name]

48 minutes ago, frogger said:

Haha Canada has legalized weed but my vape has been in the basement somewhere for about a decade.  As bland as the Cruze is, it is still more palatable to me than a Trax.

 

 

I would agree!

[frogger]

1 hour ago, dfelt said:

Hail Canada, a Land we export weed too! 

My wife had a weed stock ETF for about 4 months this year, it went up 20% in that time but has gone down since legalization went national and suppliers had trouble fulfilling.  So many greenhouses have converted or are in the midst of being converted..

[G. David Felt]

30 minutes ago, frogger said:

My wife had a weed stock ETF for about 4 months this year, it went up 20% in that time but has gone down since legalization went national and suppliers had trouble fulfilling.  So many greenhouses have converted or are in the midst of being converted..

Lots of growth ahead I expect. LOL

[ocnblu]

This is a real problem.  The domestics NEVER paid much attention to compacts and subcompacts.  The Japanese and Koreans own that market already, and now it will only entrench foreign automakers even more into U.S. culture... because the cars they build are introductory... if they can build a good, cheap car, then they have a customer who will check back with them first... for their subsequent vehicular needs.  Then there are those that have only bought small cars, even as their incomes grow.  These people are being kicked to the curb by FCA, GM and Ford... the foundation for a bleak future.  High-priced electrics with built-in range anxiety are not the answer.

[G. David Felt]

41 minutes ago, ocnblu said:

This is a real problem.  The domestics NEVER paid much attention to compacts and subcompacts.  The Japanese and Koreans own that market already, and now it will only entrench foreign automakers even more into U.S. culture... because the cars they build are introductory... if they can build a good, cheap car, then they have a customer who will check back with them first... for their subsequent vehicular needs.  Then there are those that have only bought small cars, even as their incomes grow.  These people are being kicked to the curb by FCA, GM and Ford... the foundation for a bleak future.  High-priced electrics with built-in range anxiety are not the answer.

Sounds like you have been drinking the MB Koolaide where one company will rule it all from entry to ultra luxury.

We are a Multicultural Society of Global Products Globally sold and the days of US Empire building are gone along with the English Empire and everyone else that thinks singularly in the world.

Globally is the planet you live on.

[ocnblu]

1 hour ago, dfelt said:

Sounds like you have been drinking the MB Koolaide where one company will rule it all from entry to ultra luxury.

We are a Multicultural Society of Global Products Globally sold and the days of US Empire building are gone along with the English Empire and everyone else that thinks singularly in the world.

Globally is the planet you live on.

So sick of your BS, Felt.

Edited December 5, 2018 by ocnblu

[G. David Felt]

39 minutes ago, ocnblu said:

So sick of your BS, Felt.

Same could be said for yours Mr. Blu

[riviera74]

2 hours ago, ocnblu said:

This is a real problem.  The domestics NEVER paid much attention to compacts and subcompacts.  The Japanese and Koreans own that market already, and now it will only entrench foreign automakers even more into U.S. culture... because the cars they build are introductory... if they can build a good, cheap car, then they have a customer who will check back with them first... for their subsequent vehicular needs.  Then there are those that have only bought small cars, even as their incomes grow.  These people are being kicked to the curb by FCA, GM and Ford... the foundation for a bleak future.  High-priced electrics with built-in range anxiety are not the answer.

Not true.  The domestics did build compacts and subcompacts.  They just never put the effort into them that Japan Inc and Korea Inc did for one simple reason:  in the 1970s small cars are mostly what they built domestically and then they exported small cars to the USA.  Corolla and Civic and the Mazda 3 and the Sentra and the small Hyundai/KIA cars ARE their bread and butter.  That has not been true of the domestics since the 1920s.  The domestics want you to buy large sedans and pickup trucks for the high margins.  This is why the domestics MAY have a bleak future: GM and Ford and FCA want margins and not necessarily small car buyers since those buyers do not fill the coffers anywhere nearly as well as BOF trucks and midsize CUVs (and at one time, large sedans).

Worse yet, it has not been proven that a Cruze driver buys an Impala or Traverse in 5-7 years.  So the domestics say: why bother?

[ocnblu]

2 minutes ago, riviera74 said:

Not true.  The domestics did build compacts and subcompacts.  They just never put the effort into them that Japan Inc and Korea Inc did for one simple reason:  in the 1970s small cars are mostly what they built domestically and then they exported small cars to the USA.  Corolla and Civic and the Mazda 3 and the Sentra and the small Hyundai/KIA cars ARE their bread and butter.  That has not been true of the domestics since the 1920s.  The domestics want you to buy large sedans and pickup trucks for the high margins.  This is why the domestics MAY have a bleak future: GM and Ford and FCA want margins and not necessarily small car buyers since those buyers do not fill the coffers anywhere nearly as well as BOF trucks and midsize CUVs (and at one time, large sedans).

Worse yet, it has not been proven that a Cruze driver buys an Impala or Traverse in 5-7 years.  So the domestics say: why bother?

"Not true" and then you proceed to agree with everything I said.  WTH are you talking abote?

[Suaviloquent]

Certain automakers do some things better. The domestic makes nowadays are expected to make massive profits in a growth and peak economic cycle.

But even truck sales are tied to housing starts and other things. In a bad economy, I’m pretty sure that GM Ford and FCA are not making cars anymore because even now they're not viable

And now they all have some form of cheaper pickup or base model utility that is better equipped tech wise (not luxo power everything) than the high trim cars sold 10 yrs ago

 

[daves87rs]

On 12/4/2018 at 7:15 PM, ocnblu said:

This is a real problem.  The domestics NEVER paid much attention to compacts and subcompacts.  The Japanese and Koreans own that market already, and now it will only entrench foreign automakers even more into U.S. culture... because the cars they build are introductory... if they can build a good, cheap car, then they have a customer who will check back with them first... for their subsequent vehicular needs.  Then there are those that have only bought small cars, even as their incomes grow.  These people are being kicked to the curb by FCA, GM and Ford... the foundation for a bleak future.  High-priced electrics with built-in range anxiety are not the answer.

Minus the very last part (they will be part of it) Ocn is pretty much right on. GM is pulling a bonehead move dumping the Cruze when the Sonic and the Spark make more sense to dump. Offer different level of the Cruze base model to make up for the loss of the tiny cars-ans cover a larger range of customers.

Then, only after they grow with you-they can jump into other products. Kia is already gaining ground-and the Chinese are not far behind ......

[ocnblu]

That new Soul is pretty cool looking.

[daves87rs]

2 hours ago, ocnblu said:

That new Soul is pretty cool looking.

True.

And look-they can offer a whole  line that is affordable- even EV.

 

A lesson GM and Ford could use....

 

 

[G. David Felt]

12 hours ago, daves87rs said:

Minus the very last part (they will be part of it) Ocn is pretty much right on. GM is pulling a bonehead move dumping the Cruze when the Sonic and the Spark make more sense to dump. Offer different level of the Cruze base model to make up for the loss of the tiny cars-ans cover a larger range of customers.

Then, only after they grow with you-they can jump into other products. Kia is already gaining ground-and the Chinese are not far behind ......

Yet none of us really know the long range roll out of new auto's.

GM could very well have a segment leading Cruze size EV that will beat them all with far less maintenance required, 300 mile range being more than enough for going to and from work and running errands with the convenience of plugging it in at night at home than running down to the dirty smelly gas station, standing out in the cold and rain or heat of the south.

GM is killing off auto's that are selling poorly, but we have not seen the full poker hand yet of what EVs they will introduce that can possibly replace them.

I believe GM will have like product that are hybrids or pure electric that will more than make up for the loss of these auto's.

Right now not killing off the Sonic and Spark is a Smart move to keep them in that segment when the cost of Batteries is still very high and density is not there yet for such a small package.

Solid State batteries such as the breakthroughs that have happened this year alone, 

https://www.carscoops.com/2018/12/honda-announces-fluoride-ion-battery-breakthrough-allow-batteries-10x-energy-density/

 

So while we have these technologies that are coming, we also still have breakthroughs in traditional battery design also.

https://insideevs.com/did-u-of-m-come-up-with-solid-state-battery-breakthrough/

University of Michigan just released their details on how they can build a stabalized Li battery pack that takes only 15% of the normal time to charge. That is a huge decrease in charging times when we know that Li heats up and can explode when charged too fast without proper cooling. Finding a way to reduce charge times on existing batteries till solid state goes into production is great.

Way to look at this is a normal EV charging at home in 8hrs now only takes 15% of that time or 1hr 20 min.

Skateboard concept Cruze EV that has way more interior room, far less maintenance with recharging you could do from home will sell well to the masses.

[balthazar]

36 minutes ago, dfelt said:

...with the convenience of plugging it in at night at home than running down to the dirty smelly gas station, standing out in the cold and rain or heat of the south.

"dirty-smelly" lol.
This tangible issue here is, whereas gas stations are widespread and you go to them, charging at home certainly doesn't work for everyone. My truck parks outside- I'd have to run a 25' cord to it, snake it out behind the garage door track, loop it around the other car parked outside, unplug the outlet end in case it rains, pick it up when I mow, etc. I don't find that "convenient".
A lot of older homes have no garage and no outside outlets. Many inner city residents (you know; another one of the supposed 'target' buyers), park on the street; they're not really supposed to lay a cord across the sidewalk, are they? What if they only find a parking spot 4 doors down the street? Then there are apartment / high rise dwellers that park in lots (or decks) with no provisions to plug in. Infrastructure, infrastructure, infrastructure- it's not ready yet. No responsible OEM is going to kill an IC small car & replace it whole hog with an EV, because buyers aren't ready right now, because the infrastructure isn't. Yet.
The breathlessness some folk talk about the tsunami of EVs cars that are going to wipe out ICs inside of 10 years simply isn't keeping touch with reality. There's the fantasy vision of the Brave New World, then there is the 'dirty smelly' reality version.

Edited December 8, 2018 by balthazar

[Robert Hall]

A few minutes ago...my Jeep was down to a quarter of a tank.  Went out on the main street outside my neighborhood--5 stations within a mile or so to choose from...Valero, Sunoco, Shell, BP, Chevron.  Went to Shell.  Fill up took maybe 6-8 minutes.   It will be a while until recharging has that level of convenience.  Yes, it was cold outside--30 degrees, but being an Ohio native, I have winter clothes..

Edited December 8, 2018 by Robert Hall

[G. David Felt]

34 minutes ago, balthazar said:

"dirty-smelly" lol.
This tangible issue here is, whereas gas stations are widespread and you go to them, charging at home certainly doesn't work for everyone. My truck parks outside- I'd have to run a 25' cord to it, snake it out behind the garage door track, loop it around the other car parked outside, unplug the outlet end in case it rains, pick it up when I mow, etc. I don't find that "convenient".
A lot of older homes have no garage and no outside outlets. Many inner city residents (you know; another one of the supposed 'target' buyers), park on the street; they're not really supposed to lay a cord across the sidewalk, are they? What if they only find a parking spot 4 doors down the street? Then there are apartment / high rise dwellers that park in lots (or decks) with no provisions to plug in. Infrastructure, infrastructure, infrastructure- it's not ready yet. No responsible OEM is going to kill an IC small car & replace it whole hog with an EV, because buyers aren't ready right now, because the infrastructure isn't. Yet.
The breathlessness some folk talk about the tsunami of EVs cars that are going to wipe out ICs inside of 10 years simply isn't keeping touch with reality. There's the fantasy vision of the Brave New World, then there is the 'dirty smelly' reality version.

Valid points made, but then time will eventually get everything changed over and you can also have installed a wireless charging pad that has nothing to pickup or deal with, drive your auto over it on top of the pad at your house and go into the house. The auto will recharge on it's own.

Always solutions to every exception or challenge. Yes not everyone can afford it yet and it will take time to get out to everyone, but all new constructions on the west coast requires chargers including homes and for old homes with or without garages, local PSE has free chargers they will come out and install with a 35 foot charging cord. so easy to not have to worry about for some.

I understand where your coming from. I would think a pickup truck that meets your needs with all the torque an EV can provide where you drive home and park in your designated spot and the wireless pad recharges it to keep you full would be nice and one less thing to have to deal with. 

Always full tank.

@Robert Hall Having an EV jeep SUV that has a 400 mile range, wireless pad in your designated parking spot so it always recharges and you always have a full tank of electrons would be nice when you leave the house.

Solutions can always be done, technology has proven that.

[balthazar]

11 minutes ago, dfelt said:

Valid points made, but then time will eventually get everything changed over and you can also have installed a wireless charging pad that has nothing to pickup or deal with, drive your auto over it on top of the pad at your house and go into the house. The auto will recharge on it's own.

Always solutions to every exception or challenge.

How are people who park in public spaces (parking lots, decks, or on the street) supposed to have a charging pad? What do they do when they come home and someone else is parked over it? What happens to the pad when a plow comes by? Or the pavement heaves beneath it? Or someone steals it? Are people supposed to take this pad in & out when they want to charge? That's just a larger 'cord'- same points apply.

As for an EV truck, I'm not paying $70 grand for a work truck. That's lunacy.

Edited December 8, 2018 by balthazar

[Robert Hall]

1 hour ago, balthazar said:

 

As for an EV truck, I'm not paying $70 grand for a work truck. That's lunacy.

Good point, but the Chevy HD, GMC HD, Ford Super Duty, etc are at the price and beyond already..

Edited December 8, 2018 by Robert Hall

[G. David Felt]

6 minutes ago, balthazar said:

How are people who park in public spaces (parking lots, decks, or on the street) supposed to have a charging pad? What do they do when they come home and someone else is parked over it? What happens to the pad when a plow comes by? Or the pavement heaves beneath it? Or someone steals it? Are people supposed to take this pad in & out when they want to charge? That's just a larger 'cord'- same points apply.

As for an EV truck, I'm not paying $70 grand for a work truck. That's lunacy.

Per already being done for people who live in the inner city, pads are part of the cement parking spots in buildings, so nothing to mess up, just pull in and park.

On the city streets, the parking spots are marked that have wifi charging, you just pull over and park. No problems with plowing or anything else, these are either installed when new construction happens or retrofit by PSE and the city to have a wide assortment of charging spots for EVs.

Just a matter of looking at the needs of the people and planning for it. I posted about the Nissan version of wireless charging in the city back in 2016 here:

It is now very common in Japan and Nissan has been very active in building out wireless charging on the west coast. Time is all it takes to get the technology spread.

[balthazar]

1 hour ago, Robert Hall said:

Good point, but the Chevy HD, Ford Super Duty, etc are at the price and beyond already...

Nooo; an '18 2500HD starts at $34K, not $70K.
You can buy a crew cab, 4WD LTZ for $53K.
Rivian is allegedly $65K, which means more like $70K.

Edited December 8, 2018 by balthazar

[Robert Hall]

19 minutes ago, balthazar said:

Nooo; an '18 2500HD starts at $34K, not $70K.
You can buy a crew cab, 4WD LTZ for $53K.
Rivian is allegedly $65K, which means more like $70K.

 The loaded 2500HDs and Ford Platinums and Limiteds, etc are way up there though...

For instance, the local GMC dealer has 7 Sierra 2500 crew cabs in stock--ranging from 59k to 74k.   The local Chevy dealer has two Chevy 3500 HDs--$68 and $69k. 

Though I don't see the Rivian competing with those bloated monster trucks.  <marketing> It's an urban 'lifestyle vehicle' for active adults who go in the outdoors on the weekends... </marketing>

Edited December 8, 2018 by Robert Hall

[balthazar]

Talk to me when you can get a Rivian 'way down there' at $50K.

1 hour ago, dfelt said:

Per already being done for people who live in the inner city, pads are part of the cement parking spots in buildings, so nothing to mess up, just pull in and park.

On the city streets, the parking spots are marked that have wifi charging, you just pull over and park. No problems with plowing or anything else.

Quick google image search gave me this :

Pop-pop-pop-pop-pop-pop-pop-pop-pop-pop goes the snow plow.
I'm sure there are other options, and more coming. But the fact remains that NOW, if I lived in the city and had to park on the street in various spots, an EV is NOT going to work for me. That's inarguable.

Edited December 8, 2018 by balthazar

[riviera74]

An EV will not work for a lot of people right now.  But in 2030, who knows?  Uber and Lyft may replace private car ownership in a lot of large dense cities by then.  Where I live, not necessarily.

[ocnblu]

Riv, I agree witchoo, one has to be dense to choose an electric vehicle.

[balthazar]

2030, 11 years from now, I would truly be surprised if EV vehicles were 25% of the market.

[daves87rs]

I think cost (at least for now) is going to be the biggest issues with EV. 

 

That said, I can see a future where both EV and ICE can live together in harmony......

[ocnblu]

Right.  When a crew cab Colorado Z71 is the same price or less than a Bolt while being way more versatile, and the Colorado sells at a profit while the Bolt sells at a yuge loss, it should lead us to question how this plan is going to work.  Tax breaks are not sustainable to force people to change to the more expensive option. Then you have the problem of standardization of chargers.  There needs to be a uniform type of charging apparatus.  All these fiefdoms competing with each other simply muddy the waters.

Edited December 9, 2018 by ocnblu

[balthazar]

LOL- apparently it's not Level 9 Autonomous. I'll have to wait.

[Drew Dowdell]

On 12/9/2018 at 9:41 AM, balthazar said:

LOL- apparently it's not Level 9 Autonomous. I'll have to wait.

I like that house.

[balthazar]

I have a stack of '50-60s house plan books. Some cool stuff in them.