Thread: Car Industry in Crisis

Originally Posted by V8Ian

Also Sunbeam Talbot, Karrier and Tilling Stephens.

Yes, but these came years later. Tilling Stephens, I think, was post war.

The traditional car industry has been on the decline for years.

Actual costs compared to salaries have reduced but design life is down to 7-10 years and quality of trim etc. has reduced. Many years ago they were a durable item but for a long, long time they have been a consumable.

If enough of a model are made an aftermarket parts supply springs up so you can keep them going for longer but the manufacturer wants them off the road and new ones purchased to replace them.
The engine life is much longer than it used to be but some engines are expensive to repair and most people would now fit a replacement from a wreckers as a much lower cost option, or ditch the car. Engine reconditioners are closing because of lack of demand.

People want to change their car as often as they change their phones so some manufacturers trade on 'image' and perceived quality. Those manufacturers charge high prices and very high service costs. I had reason to visit a Mercedes dealer last year and there were more 'suits' than at Peter Jackson's, fruit in bowls endless coffee but the service pricing !!

The public have voted with their $$$'s so there was a slow move to Japanese cars then Korean and now Chinese. I'm sure a large percentage of the buying public don't know where their car was made and don't care. The car is now a short term purchase.......


Colin

And most people buy second hand. You are right, cars, especially engines, are far more durable than they were even thirty years ago.

It will be interesting to see to what extent people will start keeping cars longer in the recession/depression that is just starting.

The car industry as a whole has long been basically unprofitable as a whole. Certainly there have been individual companies that have remained profitable for long periods, usually operating in protected markets, but you just have to look at the number of companies that have disappeared, or merged, or been taken over and just become models, over the years, despite widespread subsidies. Just to mention a few that I have been familiar with in my lifetime, let along overseas ones that never got here:-

Auburn, Austin, Australian Six, Bolwell, Buckle, Chrysler, Citroen, Essex, Fiat, Goggomobile, Hartnett, Hillman, Hotchkiss, Humber, Jaguar, Lanchester, Leyland, Lincoln, Lightburn, Messerschmidt, Morris, Nikki, Renault, Riley, Rolls-Royce, Rover, Rugby, Saab, Simca, Southern Cross, Swift, Sunbeam, Talbot, Tarrant, Terraplane, Vauxhall, Volvo Whippet, Wolesley.

This is just from memory - I am sure that there are many more I have missed! The only manufacturer I can think of immediately that has remained more or less independent is Ford.

Yes, the car industry is in crisis - so what's new?

Originally Posted by V8Ian

The Starfire was two thirds of the Red 173, they were so badly balanced that GM-H had to engineer tougher con-rods. These 'rods are sought after, as bulletproof, by the blokes building hot red sixes.

They are XU1 rods

Originally Posted by rick130

They are XU1 rods

yeah, the XU1 was pretty hard to break. I knew a few guys just mercilessly flogged the living **** of them, and a couple I know are still going.

Originally Posted by gromit

The traditional car industry has been on the decline for years.

Actual costs compared to salaries have reduced but design life is down to 7-10 years and quality of trim etc. has reduced. Many years ago they were a durable item but for a long, long time they have been a consumable.

If enough of a model are made an aftermarket parts supply springs up so you can keep them going for longer but the manufacturer wants them off the road and new ones purchased to replace them.
The engine life is much longer than it used to be but some engines are expensive to repair and most people would now fit a replacement from a wreckers as a much lower cost option, or ditch the car. Engine reconditioners are closing because of lack of demand.

People want to change their car as often as they change their phones so some manufacturers trade on 'image' and perceived quality. Those manufacturers charge high prices and very high service costs. I had reason to visit a Mercedes dealer last year and there were more 'suits' than at Peter Jackson's, fruit in bowls endless coffee but the service pricing !!

The public have voted with their $$$'s so there was a slow move to Japanese cars then Korean and now Chinese. I'm sure a large percentage of the buying public don't know where their car was made and don't care. The car is now a short term purchase.......


Colin

Fifty years ago when I was in the new car business, we regarded cars four years old as old heaps and the customer should update.

Most OEM's have an obsolescence programme on their spare parts. Some are quite ruthless. Ford, Honda, Kawasaki are the worst I have come across. OEM's don't want to keep old ones running so don't provide spare parts after a given time. Stocks are written off and dumped. The aftermarket suppliers are your only choice other than wreckers. One heavy equipment company I worked for would only have late model trade-ins in their used equipment yard. Current model, preceding model, and good examples of the one before that. Any under say eight years old that was a bit doggy and not worth the cost of refurbishment were sent to auction for the backyard dealers and Bent Axle Bob operators. Any ten years and older were cut up and sent to scrap metal dealers. Not to be dismantled and sold as spare parts as this kept other old junk working.

Dealers are in business to sell new cars, trucks, plant. They face constant pressure from the OEM's reps to take stock machines, sell their stock and take more, chase market share.

John nailed it.

And as time marches on the way to profits was also volume production.
There in comes another problem.

You need to make X units a day, day in - day out, to meet a cost base people will come at.
The problem comes when the units dont sell, and there is a huge back log building up.
A quick search online will show large storage yards of brand new vehicles left sitting.

The other problem comes from greed. A base spec vehicle is only ~5% cheaper to make than a top spec of the same vehicle.
Yet that top spec unit sells for a significant mark up.

Just look at an SE vs HSE build. People here have paid $20-40k premiums for $5k of parts.

If the industry slowed production to meet consumption - many couldnt afford a car nowadays.

And as we enter a generation who for the most part don't want to drive, the automobile will likely head the way of the Horse and Cart.

Originally Posted by JDNSW

This is just from memory - I am sure that there are many more I have missed! The only manufacturer I can think of immediately that has remained more or less independent is Ford.

Yes, the car industry is in crisis - so what's new?

Volkswagen would be another that has remained more or less independent,and is now the biggest seller in the auto market,worldwide.

In the newer era,Toyota could be added,the second largest worldwide.They were light years ahead of the rest when it came to hybrids,and still are the leader.Also leaders in hydrogen fuel cell technology.