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The Next American Car Recession Has Already Started

By Al_Sharpton_for_President follow Al_Sharpton_for_President   2019 Jan 13, 10:32am 4,323 views   47 comments   watch   nsfw   quote   share    


The collapse of the sedan market has left Detroit automakers with too many plants.

These should be boom times for Detroit. Unemployment is at a half-century low, gasoline is cheap and auto sales in the U.S. were near record levels last year. Yet American automakers are closing factories, cutting shifts and laying off thousands of workers. The industry is behaving like a recession has arrived.

In one segment of the market, it has.

Detroit is in the grips of a car recession marked by the collapse of demand for traditional sedans, which accounted for half the market just six years ago. Buyers have made a mass exodus out of classic family cars and into sport utility vehicles. Familiar sedan models such as the Honda Accord and the Ford Fusion made up a record low 30 percent of U.S. sales in 2018, and things will only get worse.

Sales of the passenger-car body style that’s dominated the industry since the Model T will sink to 21.5 percent of the U.S. market by 2025, according to researchers at LMC Automotive, relegating sedans to fringe products. That leaves automakers with excess factory capacity that can turn out about 3 million more vehicles than buyers want. And overcapacity is precisely what spurred losses the last time a recession wracked the industry.

“You could classify this as a car recession,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.

It’s a situation that promises to put a damper on the North American International Auto Show in Detroit this week, the last to be held in the chill of January. In a bid to reestablish relevance, the annual car conclave is moving to June next year and will be reimagined as a chance for show-goers to drive new models in warm weather. The car dealers who organize the show hope the new format will entice notable dropouts—a group that now includes Mercedes, BMW and Audi—to return to an event that once commanded the full attention of the automotive world.

An optimist might seek solace in the better-than-expected profit prediction issued Friday by General Motors Co. But a deeper look at the numbers reveals that the biggest contribution to the company’s rosy forecast were cost-cutting plans—including closing five North American plants—which it said will help boost profit this year by as much as $2.5 billion.

The overcapacity plaguing U.S. automakers is the equivalent of 10 excess plants, which would account for at least 20,000 jobs directly, and thousands more as it ripples through the suppliers and support services to the massive industry. “GM has taken some actions, but they still have some well-underutilized plants,” Schuster said. “So we may not be done with this yet.”

One strategy for dealing with the collapsing car market in the past has been to stuff unwanted sedans into rental lots and other commercial fleets. That has only delayed today’s capacity crisis. Those lower-profit fleet sales have inflated the market, keeping U.S. vehicle deliveries above 17 million for the last four years, even as sales to individual retail customers peaked three years ago.

“The car recession and the retail recession have already arrived in the sense that retail sales peaked in 2015 and have gone down ever since,” said Mark Wakefield, head of the automotive practice at consultant AlixPartners. “Cars have just been crushed.”

Many former passenger-car buyers have flocked to crossover SUVs that offer more room and, these days, competitive fuel economy. The Chevy Malibu, a family sedan, gets combined city and highway fuel economy of 26 miles per gallon. The Chevy Equinox, a small crossover SUV, trails by only one mile per gallon.

There are signs drivers are even ditching sedans for big trucks. “Pickup buyers are trading in crossover SUVs and sedans,” said Sandor Piszar, director of marketing at Chevrolet, which is ramping up production of its new Silverado. Total U.S. pickup sales grew 2 percent last year, to 2.4 million vehicles, in a market that was otherwise flat.

Outside Detroit, auto executives are sticking with sedans. Between the U.S., Canada, Mexico and Puerto Rico, Toyota sells 375,000 of its Corolla compacts each year. The Camry sedan likewise moves in big, albeit shrinking, numbers. “We are not going to get out of that business,” Jim Lentz, chief executive officer of Toyota Motor North America, said in an interview last month. “We still see an opportunity there.”

Ironically, automakers have the last recession to blame for their current plight. A decade ago, when high gas prices and a crashing economy left little demand for SUVs, the auto industry suffered through layoffs, plant closings and, ultimately, the bankruptcies and bailouts of GM and Chrysler. Detroit flipped its factories from making hulking SUVs to sensible, gas-sipping sedans.

“You had two quick, upward movements in gas prices in the 2000s that were like a one-two punch,” said Wakefield, “and it was like a dog whistle went off, and you couldn’t sell” SUVs. His firm helped guide GM through its 2009 bankruptcy. “It felt like gas prices would go up and stay high,” he recalled.

But now the market has flipped back, thanks to consistently low gas prices, and much of Detroit is once again building too many of the wrong products.

Fiat Chrysler Automobiles NV, which anticipated sedans’ death spiral by culling its car lineup in 2016, has largely sidestepped the restructuring pain GM and Ford are experiencing now. Instead of shuttering plants or cutting shifts, it’s converting an engine factory in Detroit to make room for a three-row Jeep Grand Cherokee and tying its fortunes to an onslaught of SUVs. The Jeep Gladiator, a truck version of the Wrangler, is due out in the second quarter of 2019. A retooled plant in Warren, Michigan, will produce the revived Jeep Wagoneer and Grand Wagoneer SUVs.

https://www.bloomberg.com/news/articles/2019-01-13/the-next-american-car-recession-has-already-started

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8   Fortwaynemobile   ignore (2)   2019 Jan 14, 9:43am     ↓ dislike (0)   quote   flag      

They don't have a car that can compete with a civic/corolla.
9   APOCALYPSEFUCKisShostakovitch   ignore (56)   2019 Jan 14, 9:48am     ↓ dislike (0)   quote   flag      

Subaru with the 2.2L or the 1.8L with a fresh head gasket is a worthy piece of car kit.
11   zzyzzx   ignore (2)   2019 Jan 14, 10:12am     ↓ dislike (0)   quote   flag      

Fortwaynemobile says
They don't have a car that can compete with a civic/corolla.


My vintage Ford Escort suggests otherwise. Really only thing majorly wrong with the current Focus/Festiva is the shitty Dual clutch automatic transmission that comes with the 2L engine version. in fact I'd say that Dual Clutch "Automatic" transmissions and CVT's have ruined most small cars. Even some of the newer Toyota automatic transmissions suck so bad that I wouldn't buy one (you can't even add fluid to them without taking it to the dealer!). For some reason SUV's still have a regular automatic transmission with a dip stick and regular gears with a torque converter - proven technology! But with today's smaller cars from pretty much all manufacturer's it's a big middle finger if you want an automatic transmission. I think GM makes the ones that I consider least objectionable in that it's still a regular automatic transmission, and it's possible to add transmission fluid and there is a weep hole that lets you know when it's full. Still a shitty way to check your transmission fluid. but way better than no way.
12   kt1652   ignore (1)   2019 Jan 14, 10:43am     ↓ dislike (0)   quote   flag      

DCT does not slip like TC AT and they are quickest shifting. CVT’s are weak inherently. I owned several. The drive belt comprise of thin metal bands, (think band saw blades), holding hundreds of pieces of metal wedges that act as variable ratio gears. This contraption operates in a push-pull mode. This explain why they are never used in heavy duty vehicles. They cannot take abuse. They will never last like gear boxes or well-built torque converter AT.
Why then? To gain a small amount of mpg, they are cheaper to make than a bunch of precisely machined and hardened steel gears.
To me this is absurd. Even more absurd is engine with turbocharger AND supercharger.
Guaranteed to drain your wallet in a few years then blow itself apart.
How about NO as in Zilch transmission?
13   FuckCCP89   ignore (5)   2019 Jan 14, 10:45am     ↓ dislike (0)   quote   flag      

zzyzzx says
For some reason SUV's still have a regular automatic transmission with a dip stick


Which ones? Even conservative Toyota has dropped dipsticks on their truck auto transmissions more than a decade ago. Weepholes are annoying af.
14   FuckCCP89   ignore (5)   2019 Jan 14, 12:10pm     ↓ dislike (0)   quote   flag      

kt1652 says
How about NO as in Zilch transmission?


In an ICE-powered vehicle? Good luck with that.
16   zzyzzx   ignore (2)   2019 Jan 15, 8:10am     ↓ dislike (0)   quote   flag      

DASKAA says
Which ones?


Ford Edge/Flexhave them (around 2:38):


Youtube also shows them in the Mustang and Fusion.
17   zzyzzx   ignore (2)   2019 Jan 15, 8:14am     ↓ dislike (0)   quote   flag      

DASKAA says
Even conservative Toyota has dropped dipsticks on their truck auto transmissions more than a decade ago.


And that it reason enough not to buy one of their cars. You literally have to take it to the dealer and have them use a machine that pressurizes the fluid to get it in! Very DIY unfriendly! Perhaps over time people will figure out a DIY friendly method when these cars get old.
18   NDrLoR   ignore (0)   2019 Jan 15, 8:49am     ↓ dislike (0)   quote   flag      

zzyzzx says
IMO, it's not helping that pretty much all cars are 4 door sedans. I remember when the same car could be bought as a 2 door sedan, 4 door sedan, 2 door hatchback, 4 door hatchback. 2 door convertible, a station wagon, and there would sometimes be a sport model and / or a turbo.
Also a two-door hardtop, derived from the appearance in the late 40's when they first came out of a convertible with its top up but in steel, was revolutionary at the time and had exotic names, i.e. Holiday, Catalina, Bel-Air, Riviera, St. Regis: https://www.google.com/imgres?imgurl=http://wildaboutcarsonline.com/members/temp/IMGc8eb441d102bb043edeae3eea71b4af5.jpg&imgrefurl=http://wildaboutcarsonline.com/cgi-bin/pub9990262549620.cgi?itemid%3D9990499193727%26action%3Dviewad%26categoryid%3D9960447178948&h=279&w=460&tbnid=qF_PsIBgGDj-tM&tbnh=175&tbnw=288&usg=AI4_-kSmqqcRIhUJJwxgo6D9k2graEVmVg&vet=1&docid=HjXcI8GU4hzgnM

Beautiful styling and pretty colors would sell just as well today as they always have if they were available.
19   MrMagic   ignore (10)   2019 Jan 15, 9:26am     ↓ dislike (0)   quote   flag      

zzyzzx says
Toyota brings back the Supra sports car after almost two decades


Wifey is looking for a new car. She's thinking of a race car/sports car. That Supra looks interesting, but it's not coming out for a while.

Problem is, most of these new race cars are manuals, and she wants an automatic, so it limits some choices.
20   Fortwaynemobile   ignore (2)   2019 Jan 15, 9:36am     ↓ dislike (0)   quote   flag      

willywonka says
Fortwaynemobile says
civic/corolla
Look like shyte.


Not best looking cars, but saves a whole lot of money as daily drivers. Saves money and a lot of it.
Ford makes nice trucks, they got that market.

GM seems to just make lemons, every car nothing but problems.
21   FuckCCP89   ignore (5)   2019 Jan 15, 10:48am     ↓ dislike (0)   quote   flag      

zzyzzx says
DASKAA says
Even conservative Toyota has dropped dipsticks on their truck auto transmissions more than a decade ago.


And that it reason enough not to buy one of their cars. You literally have to take it to the dealer and have them use a machine that pressurizes the fluid to get it in! Very DIY unfriendly! Perhaps over time people will figure out a DIY friendly method when these cars get old.


No, you don't really need to take it to the dealer. I've done ATF change in my Toyota truck myself. Their new "weephole" method of checking whether the fill level is correct is a major PITA though. Whoever the fuck thought it was a good idea needs to be taken behind a barn and flogged with a vacuum hose.
22   FuckCCP89   ignore (5)   2019 Jan 15, 10:49am     ↓ dislike (0)   quote   flag      

zzyzzx says
DASKAA says
Which ones?


Ford Edge/Flexhave them .... Youtube also shows them in the Mustang and Fusion.


At least somebody hasn't gone mad yet.
23   FuckCCP89   ignore (5)   2019 Jan 15, 10:50am     ↓ dislike (0)   quote   flag      

zzyzzx says
Toyota brings back the Supra sports car after almost two decades


Isn't it jointly developed with BMW? I wouldn't want any BMW DNA in my Toyota, thankyouverymuch.
24   zzyzzx   ignore (2)   2019 Jan 15, 10:54am     ↓ dislike (0)   quote   flag      

DASKAA says
No, you don't really need to take it to the dealer. I've done ATF change in my Toyota truck myself.


That's a truck, and I would believe that their cars work different.
25   kt1652   ignore (1)   2019 Jan 15, 10:57am     ↓ dislike (0)   quote   flag      

Why Toyota is no threat to Tesla. They are the best at perfecting but no good at innovation and speed.
The BRZ is a Subaru. Yamaha developed many hi perf engines for Toyota.
BMW is best at making things expensive.
26   FuckCCP89   ignore (5)   2019 Jan 15, 10:59am     ↓ dislike (0)   quote   flag      

zzyzzx says
DASKAA says
No, you don't really need to take it to the dealer. I've done ATF change in my Toyota truck myself.


That's a truck, and I would believe that their cars work different.


Could be. Good thing I've graduated from FWD cars long time ago and I've never been interested in owning an auto transmission in a car. ;)
27   zzyzzx   ignore (2)   2019 Jan 15, 11:11am     ↓ dislike (0)   quote   flag      

To check transmission fluid level on a Toyota car 2007 and up, it has to be in a narrow temperature range 104-113 degrees, or you need a bunch of tools:


Not sure about Corollas though. Might use a crappy CVT or something else objectionable. Supposedly they had dipsticks as recent as 2010.

Plus the specific Toyota ATF-WS is probably expensive too. I used SuperTech ATF fluid in my Escort.
28   FuckCCP89   ignore (5)   2019 Jan 15, 11:36am     ↓ dislike (0)   quote   flag      

zzyzzx says
the specific Toyota ATF-WS is probably expensive too


It is. But not life-altering expensive.
29   FuckCCP89   ignore (5)   2019 Jan 15, 11:37am     ↓ dislike (0)   quote   flag      

MrMagic says
Wifey is looking for a new car. She's thinking of a race car/sports car. That Supra looks interesting, but it's not coming out for a while.

Problem is, most of these new race cars are manuals, and she wants an automatic, so it limits some choices.


I'm pretty sure it will be auto only.
30   zzyzzx   ignore (2)   2019 Jan 15, 11:49am     ↓ dislike (0)   quote   flag      

Ford Mustang has a transmission dipstick as well (shitty location, but at least it's there, why can't everyone at least do this):
31   zzyzzx   ignore (2)   2019 Jan 15, 11:49am     ↓ dislike (0)   quote   flag      

For Fusion transmission dipstick shown here:
">
32   zzyzzx   ignore (2)   2019 Jan 15, 11:54am     ↓ dislike (0)   quote   flag      

DASKAA says
zzyzzx says
the specific Toyota ATF-WS is probably expensive too


It is. But not life-altering expensive.


Some cheaper alternatives:
https://www.tacomaworld.com/threads/verified-alternatives-to-toyota-ws-atf-automaitc-transmission-fluid.373083/

Personally if I had one of those cars, I would not use any of them unless there was ample evidence of other people using them. Super Tech DEXRON VI Automatic Transmission Fluid might be my first choice of the bunch listed.

https://www.walmart.com/ip/Super-Tech-DEXRON-VI-Automatic-Transmission-Fluid-1-qt/17134873
Meets the requirements of General Motors automatic transmissions calling for DEXRON VI fluid
Suitable for use where DEXRON II, DEXRON III, JASO M315 (1A), Toyota WS and Toyota T-IV fluids are recommended
33   everything   ignore (1)   2019 Jan 15, 12:54pm     ↓ dislike (0)   quote   flag      

I think their is just allot of cars to pick from, many manufacturers, and the car segment has become glutted and competitive. I'm still a car guy myself even though I have a truck too. It's just good classic point A point B transportation. Many people I know have trucks that never see a payload. SUV's are like the new station wagons or vans.
34   MrMagic   ignore (10)   2019 Jan 15, 2:51pm     ↓ dislike (0)   quote   flag      

kt1652 says
The BRZ is a Subaru. Yamaha developed many hi perf engines for Toyota.


Actually the BRZ was a joint effort with Toyota. Toyota's version is the 86.

We just came back from looking at the BRZ. Not a bad car, but makes me wonder, since Subaru around here is considered a old folks car. Since Toyota had some input (maybe even TRD), that makes me feel a little bit better. Considering this is only going to be a part-time play toy, she doesn't want to move up to something more expensive. I actually like the Lexus RC too, but I don't think I can twist her arm.

DASKAA says
I'm pretty sure it will be auto only.


Ha... how did you know? The model we took out was a manual, she didn't even want to drive it. So, it will definitely be a auto.
35   MrMagic   ignore (10)   2019 Jan 15, 2:53pm     ↓ dislike (0)   quote   flag      

DASKAA says
Whoever the fuck thought it was a good idea needs to be taken behind a barn and flogged with a vacuum hose.


That actually sounds kinda kinky!! Where can I sign up?
36   FuckCCP89   ignore (5)   2019 Jan 15, 3:06pm     ↓ dislike (0)   quote   flag      

MrMagic says
DASKAA says
Whoever the fuck thought it was a good idea needs to be taken behind a barn and flogged with a vacuum hose.


That actually sounds kinda kinky!! Where can I sign up?


If you find the guy/gal responsible you have my blessing to administer the prescribed medicine.
37   Al_Sharpton_for_President   ignore (6)   2019 Jan 15, 3:57pm     ↓ dislike (0)   quote   flag      

zzyzzx says
Toyota brings back the Supra sports car after almost two decades
It's hideous! What is that misshapen hunk of metal/plastic over the rear wheel? It adds nothing stylistically and looks like they put together several incompatible body styles. Fail!
38   ForcedTQ   ignore (0)   2019 Jan 15, 4:49pm     ↓ dislike (0)   quote   flag      

MrMagic says
kt1652 says
The BRZ is a Subaru. Yamaha developed many hi perf engines for Toyota.


Actually the BRZ was a joint effort with Toyota. Toyota's version is the 86.

We just came back from looking at the BRZ. Not a bad car, but makes me wonder, since Subaru around here is considered a old folks car. Since Toyota had some input (maybe even TRD), that makes me feel a little bit better. Considering this is only going to be a part-time play toy, she doesn't want to move up to something more expensive. I actually like the Lexus RC too, but I don't think I can twist her arm.

DASKAA says
I'm pretty sure it will be auto only.


Ha... how did you know? The model we took out was a manual, she didn't even want to drive it. So, it will definitely be a auto.



Used BRZ + LS3 engine destroked to 3.27" with 4.8 crank (for higher rev range and to keep the torque balance with the lighter weight car) and Tony Mamo heads/intake/cam recomendation, long tubes and decent exhaust setup + 6L80E trans and wider tires. You will never want to drive a straight road again!

Or look up Crawford Performance. See the 450 whp white ToyoBaru on The Smoking Tire: Tuned by Crawford. Matt does a brilliant job flogging that car.
39   kt1652   ignore (1)   2019 Jan 15, 11:15pm     ↓ dislike (0)   quote   flag      

My bad, the 86, a sports car that has the Subaru boxer engine and is manufactured in Subaru factory. Yes, that's Toyota dna.
40   Al_Sharpton_for_President   ignore (6)   2019 Jan 16, 3:58am     ↓ dislike (0)   quote   flag      

kt1652 says
My bad, the 86, a sports car that has the Subaru boxer engine and is manufactured in Subaru factory. Yes, that's Toyota dna.
Both have classic good looks and the reviews have been great.
41   kt1652   ignore (1)   2019 Jan 16, 6:03am     ↓ dislike (0)   quote   flag      

Because they are essentially the same car built by Subaru?
Why the much hyped BMW, I mean Supra should be even better.
Autoblog didn't mince words:
"The Mk. V? It's not that. It's not a statement of Toyota's engineering prowess. It's hardly a Toyota at all. This isn't, at all, what the Supra name signifies to me, realities of this business or no. This is somebody else's work that Toyota is cribbing. It's a little sad."
42   FortWayneIndiana   ignore (3)   2019 Jan 16, 8:10am     ↓ dislike (1)   quote   flag      

In a few years Tesla wear and tear will start to trickle in. We’ll see what happens.
43   kt1652   ignore (1)   2019 Jan 16, 10:51am     ↓ dislike (0)   quote   flag      

FortWayneIndiana says
In a few years Tesla wear and tear will start to trickle in. We’ll see what happens.

I love Toyota's, their I-4 engine is prob the best no-drama transportation. Last month I drove 120 miles to buy a Corolla for sis-in-law.

Diesel-electric trains are powered by electric traction motors. The diesel engine generate electricity only. Their have a proven reliability record.
Look at the picture of the Tesla motor - they can go 500K-1M miles. Take out 95% of the moving parts - their associated failure modes gone. It is simple reliability modelling.
https://en.wikipedia.org/wiki/Diesel_locomotive

"In a diesel–electric locomotive, the diesel engine drives either an electrical DC generator (generally, less than 3,000 horsepower (2,200 kW) net for traction), or an electrical AC alternator-rectifier (generally 3,000 horsepower (2,200 kW) net or more for traction), the output of which provides power to the traction motors that drive the locomotive. There is no mechanical connection between the diesel engine and the wheels."
44   DILLIGAF   ignore (2)   2020 Jun 29, 4:47am     ↓ dislike (0)   quote   flag      

Ford will allow some new customers to return vehicles if they lose their job

The Blue Oval on Monday rolled out a new program in which customers who lease or purchase a vehicle with Ford Credit financing can return it if they experience job loss within a year of the transaction. Enrollment in the program extends through Sept. 30.

As it launches a recovery from the coronavirus crisis, Ford is looking to spur sales amid double-digit unemployment and as the country grapples with a surge of new COVID-19 cases.

"We feel like right now, the economy is at the stage of recovery where people want things to be back to normal, they want to buy, but they're still a little nervous about what the future holds," Mark LaNeve, Ford's vice president of U.S. marketing, sales and service, said in a statement. "We want them to know we understand that, and we're here to support them in their buying decisions."

The program comes on the heels of an eight-week shutdown of North American production by Detroit's three automakers. As sectors of the U.S. economy have gradually reopened, consumer demand for vehicles has mounted a more robust rebound than had originally been expected.

But analysts have said it may take years for the industry to fully recover. Ahead of the release of quarterly sales next week, Cox Automotive is projecting that sales for the first half of 2020 could be down nearly one-quarter from the same period in 2019.

Ford, which took on $20 billion in new debt to help preserve cash flow amid the crisis, projected it would post a $5 billion loss in the second quarter. Strong vehicle sales — and getting crucial new vehicle launches right, including the next-generation F-150 Ford unveiled Thursday — in the months ahead will be crucial for the Blue Oval's financial recovery.

Under the Ford Promise program, if a customer needs to return a vehicle, Ford will assess its value using the National Automobile Dealers Association average trade-in value, reduce the customer's outstanding balance by that amount, and waive up to an additional $15,000. The customer would be responsible for paying off any remaining balance, for vehicle damage, and for any late or deferred payments.

The program covers 2019, 2020 and 2021 new, used and certified pre-owned vehicles that are purchased or leased through Ford's financing arm. The program is not open to commercial customers. The protection begins 30 days after the transaction.

https://www.detroitnews.com/story/business/2020/06/29/ford-vehicle-return-program-for-customers-who-lose-jobs/3267462001/
45   MAGA   ignore (1)   2020 Jun 29, 8:08am     ↓ dislike (0)   quote   flag      

Drive to Recovery? 🤢🤢🤢


46   MAGA   ignore (1)   2020 Jun 29, 8:11am     ↓ dislike (0)   quote   flag      

kt1652 says

I love Toyota's, their I-4 engine is prob the best no-drama transportation. Last month I drove 120 miles to buy a Corolla for sis-in-law.


I'm waiting for Toyota to support Android Auto before buying a new car.
47   Tenpoundbass   ignore (14)   2020 Jun 29, 10:25am     ↓ dislike (0)   quote   flag      

Cars are designed by climate hoaxers

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