Carmageddon for Cars: “Cars” Are Scheduled to Die, by Wolf Richter

The US car industry no longer wants to make cars, only trucks and SUVs. From Wolf Richter at wolfstreet.com:

The end of an era in the US Auto industry — until $7 gas arrives.

“Cars,” as the auto industry defines them, are going to die. Not necessarily the vehicles, though they’re disappearing too, but the category of “cars” because sales have plunged beyond hope, especially for vehicles by the Big Three US automakers, GM, Ford, and Fiat-Chrysler.

It came to a head today: Ford announced $25.5 billion in planned cost cuts by 2022 – some red meat it threw to its restive stockholders, whether or not these “cuts” will ever materialize. But the cuts included a big category that is a sign of the times: all current Ford car models, except the Mustang, will be killed off.

This includes, in order of size, the Fiesta, the Focus, the Fusion, and the once dead, then revived, and soon dead again Taurus.

After which Ford dealers will only have “trucks” on the lot and a few Mustangs.

Industry-wide, “car” sales have been a nightmare: During the first three months of the year, “truck” sales jumped 10%, and “car” sales plunged 11%. In 2017, truck sales rose 4.3%, and car sales plunged 11%. And so on. This divergence of dropping car sales and rising truck sales started in 2015, and since then, “car” sales have gotten relentlessly crushed:

Part of the problem is that the industry’s division between “cars” and “trucks” is peculiar. “Trucks” include pickups, vans, SUVs, and compact SUVs (crossovers). But some SUVs and all crossovers are based on a unibody car chassis (instead of body-on-frame, which is the case with trucks). They’re stubbier versions of station wagons. For consumers, the switch from cars to crossovers is natural.

And part of the problem is that consumers have fallen out of love with cars. Gas is cheap (though getting more expensive), SUVs and crossovers are cool and immensely popular. And in parts of the country, pickups have for decades been the most popular US-branded vehicle type, and that love affair has only increased in recent years.

Including SUVs and crossovers, “trucks” accounted for 66.4% of total sales in March, the highest ever for a March. “Truck” sales have been above 60% of total sales for 21 months in a row.

To continue reading: Carmageddon for Cars: “Cars” Are Scheduled to Die

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2 responses to “Carmageddon for Cars: “Cars” Are Scheduled to Die, by Wolf Richter

  1. This is simply a result of the government’s endless meddling and regulations. The govt needs to get out of areas where it has no authority.

    Like

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