As this is both the end of the week and the beginning of the year, let’s reflect, scratch our heads and ponder: Who won’t survive 2011? Car brands never die, they just go to a new owner. (Not always…) So let’s make that: Who won’t survive 2011 with the same owner?
We’ll hear a lot of rah rah rah when the (good) December numbers will come out on Tuesday, but we aren’t out of the woods, at all. Car sales in the U.S.A. are far away from their former glory. Europe is down. Japan is down (and boy will they be down this year.) China is China.
Supposedly, by 2012 everything will get better. Funny, even the “2012 everything will get better” prognosis hasn’t been heard often lately. Who will get creamed if gas prices really go up`? Developing new power trains is costly with an unsure payback. Currencies are in wild swings. What happens to BMW and Daimler if the Euro goes way up and even the common Chinese can’t afford a Benz anymore? Will Alfa go to VW? And speaking of Fiat and Chrysler … The Indians are complaining that climbing commodity prices are ruining their cheap car play. Who will run out of chips? And yes, Saab.
So who won’t survive – dead or alive?
Things won’t be better in 2012. It is after all the year of the apocalypse. Assuming all brands don’t go away, the most likely candidates are Suzuki, Mitsubishi, Scion, Saab, Buick, Kia, Lotus, Jaguar/LR, Maserati and Volvo. In Europe I would add Seat and Lancia.
It is after all the year of the apocalypse.
First, I don’t believe in that BS. Second, lets suppose it’s right, then it’s time for sex drugs and rock and roll. Or as could be said here: a tirar a tirar que el mundo se va a acabar. For those using Google translator, replace tirar with follar.
I forgot, screw PC.
Things won’t be better in 2012. It is after all the year of the apocalypse. Assuming all brands don’t go away, the most likely candidates are Suzuki, Mitsubishi, Scion, Saab, Buick, Kia, Lotus, Jaguar/LR, Maserati and Volvo. In Europe I would add Seat and Lancia.
Buick will not go away, they are GM’s foothold in China. Kia? Are ou crazy, they are increasing sale almost as much as Hyundai. Volvo?, Not for a while at least Geely just bought them. Seat maybe, but not for a wile VW group is doing well. Jaguar/LR, no way either. Big pockets from Tata.
I don’t think Saab will survive
I’ve heard apocalypse is delayed. New date 22012 ….
The secret sauce for Geely/Volvo is heavy equipment sales. Mix in a little Chinese low-cost labor and a total disregard for quality, and boom — the third world can’t buy their Volvo-branded junk fast enough. In the past year I have seen quite a few major, major contracts that should have gone with Cat equipment suddenly booking plane tickets for Volvo factory tours. I saw this happen frequently enough this year that I started to wonder if the car business mattered much to them at all… Meanwhile, US Volvo equipment dealers are nervous as hell. I can’t imagine how miserable it must feel to have your corporate identity snatched up by a Chinese conglomerate…
Sorry, Volvo Trucks is a different company and haven’t been sold to China. Geely bought Volvo Cars. The heaviest equipment in Geely’s lineup is a London taxi.
M 1:
Volvo Heavy Equipment has absolutely nothing to do with Chinese ownership. Your whole spiel about China the “third world” unable to “their Volvo-branded junk fast enough” and
that ” major, major contracts that should have gone with Cat equipment suddenly booking plane tickets for Volvo factory tours” is clear enough that you don’t know what you are talking about. To call Volvo “junk” (whether cars or heavy equipment) is clear that you are quite ignorant on the subject.
The car “company” that should go (but won’t) is Smart and Maybach. SAAB will go, but perhaps not before their owners enrich themselves – Phoenix Four anyone?
Repeat after me, “Buick is an international brand.”
Buick is NEVER going away as long as the Chinese are buying cars.
Don’t forget the Suzuki+VW deal.
“a tirar a tirar que el mundo se va a acabar”
In Mexican Spanish is “A cojer y a chupar (alcohol) que el mundo se va a acabar” LOL
Yes google it… LOL
Stingray you have a good excuse being in Venezuela, lots of nice gals there..! ;-)
I don’t beleive that BS either…
Well my bet is that Mazda will be joining another corporation, probably not American, same as Mitsubishi did with PSA, so they can get an After Ford lineup soon.
And probably Seat will dissapear as stated last year, if their total sales don’t improve quickly…
Salu2!
Oh, Smart. Are they already gone?
You can be sure they are hoping for a spike in gasoline pricing to kick start sales of their (not so efficient) “cars”. Still no manual tranny even…
I’ll bet Scion stops being a separate brand and its cars get folded back into the regular Toyota lineup.
Not a bad bet but I can’t decide if Toyota would actually admit defeat like that.
I dunno, those Scion owners are rabid, for reasons I am completely unable to comprehend. They’re like… I don’t know… iPod owners. The first generation to actively want to be advertised to.
I know that hyperventilating cynicism drives Internet blogs (of all stripes) and that they would lose whatever relevance they have without it, but reality plays by different rules. Events plod along at their own dreary pace and with their own momentum, punctuated on rare occasions by stark, history making catastrophes.
We have already witnessed the catastrophe here and it happened just over two years ago. Most likely, 2011 will plod along much as 2010 but with a bit more momentum and a slight acceleration in the rate of growth. Most manufacturers have worked to lower their unit production costs so that they make a profit on the new-reality, lower annual sales rates.
Game changing tectonic shifts? No. Minor tremors? As always, yes.
Saab either dies or moves completely to China.
Suzuki stays in business, but finally gives up on North America.
Mitsubishi does the same.
None of which has much to do with macro factors, and much to do with individual companies being unable to meet the competitive realities.
Remember the Suzuki+VW deal too.
Most likely Saab, given Spyker’s shaky business plan and financial position.
Did Ford actually kill the Mercury name or is it still stumbling around out there somewhere, zombie-like and unloved?
it’s dead, they’re just selling off what they have on storage lots
Mercury officially died on Dec. 31, 2010, so unforgotten that none of the car sites even posted an obituary.
Other than Saab folding, I really don’t see any seismic shifts.
Chrysler will remain unprofitable and Fiat will begin basic discussions regarding the breakup of that company.
with Geely i think they’ll give Saab at least until 2012, but i wouldn’t be surprised to see Mitsu and Suzuki pull out of the US
Yeah, unless there’s a big drop in gas prices (and sales), smart, Mitsubishi, and Suzuki won’t be leaving the US anytime soon.
Likewise, as mentioned, Scion has a large and loyal fan base. It’d be tough for Toyota to give up those guaranteed sales.
Luxury marques all seem to be selling well enough for any of them to consider folding.
That pretty much leaves Saab as the ‘dead brand walking’.
Steve, I’m not so sure of that. Chrysler is close to profitability – they’ve cut down to the bone so they don’t have to hit home runs to make money.
The only prediction that will come true about Chrysler is that there will always be people saying that the company is not going to survive.
The Suzuki+VW deal.
The secret sauce for Geely/Volvo is heavy equipment sales. Mix in a little Chinese low-cost labor and a total disregard for quality, and boom — the third world can’t buy their Volvo-branded junk fast enough. In the past year I have seen quite a few major, major contracts that should have gone with Cat equipment suddenly booking plane tickets for Volvo factory tours. I saw this happen frequently enough this year that I started to wonder if the car business mattered much to them at all… Meanwhile, US Volvo equipment dealers are nervous as hell. I can’t imagine how miserable it must feel to have your corporate identity snatched up by a Chinese conglomerate…
Geely did ot buy Volvo Truck/Heavy equipment. That is a totally seperate company owned in Sweden and a combination of the former Whie/Autocar and GMC Heavy truck. Ford only bought the automotive division which it sold to Geely.
Volvo Truck will not be impacted by Geely
Volvo was already a “monster” when they bought GMC/White. They own, Volvo, Renault Trucks, Mack, make marine and diesel engines, and who knows what else.
The trend towards smaller, more economical cars in the US is inevitable and unavoidable. Any manufacturer unprepared for this will suffer. GM is just not making any smart moves right now as far as products go and are the least agile company in these times of change. They have the resources but appear to be failing to use them.
Its unlikely GM will go away but split up and large chunks sold off? It’s not a big stretch to picture that.
That’s an interesting assessment of GM. One I would not agree with, however. In regards to being agile, they’re about to launch two small cars in the Chevy division, the Sonic to replace the Aveo in the US, and the Spark which is even smaller than the Sonic. Their trucks and SUVs are generally pretty decent when it comes to mileage. Buick is about to (or has) launched their new LaCrosse with the start/stop system. The Volt is out (YMMV) but not in great numbers yet, and the Cruze has it’s own eco version. I think they’re pretty well stocked for an upturn in fuel prices in NA. More of the upcoming product was developed with the global GM engineering and will be sold in all markets. Maybe not pointed out as much as ‘One Ford’, but a transformation along the same lines. They should make some money with the improved balance sheet in NA. There are challenges in Germany, Australia and Korea, but they consistently do well in the BRIC regions. I wouldn’t count them out just yet.
If the world economy continues to drift aimlessly, it seems inevitable we’re going to lose more brands, if not manufacturers. Mitsubishi seems to be struggling and it’s anyone’s guess what’s behind the curtain at GM. They’ve got enormous resources, but arrived in their current position because the corporate culture worshiped accounting over the product. Chrysler, even with Fiat’s backing, still seems iffy. As much as I admire Mazda, it seems certain they’ve got to get themselves partnered with a larger company or we’ll lose their interesting cars.
Gas prices will spike again which will hurt the sales of pickups. GMC sales will suffer. GM will make an effort to combine all their brands into one dealer channel. The continuing economic decline of middle America will help kill interest in Lincoln. Upper middle income buyers are still more interested in German stuff. High gas and slow growth may even kill Dodge eventually. The Ram and Challenger are also-rans, and Chrysler has already hinted the Grand Caravan may yield to the Town and Country. So, Dodge, Lincoln and GMC are headed for the scrap heap sometime in the next decade.
“GM will make an effort to combine all their brands into one dealer channel.”
Although I don’t see this happening in the next couple of years, inevitably, it will happen.
GM will have their hands full with that dealer cull. Then again, Buick and GMC may find themselves as the new Lincoln/Mercury within the decade.
Maybe not in the next two years, but Buick will definitely become a China-only brand before too long.
The correct answer is all of the above.
The energy situation is going to hit this country like the Hammer of Thor. People in the US have no idea what is going to happen to them, they are like little sleepwalking children.
High oil prices are bankrupting the business establishment from the bottom up and have been doing so since 2004. The primary casualty so far has been employment which is near 20%. No job means no car, even if fuel is ‘affordable’.
High oil prices are necessary to produce/extract new oil supplies but the same prices constrain demand due to the ongoing bankrupting process. Price spikes are directly destructive, even moreso are the price/demand crashes that inevitably follow.
As demand destruction takes hold prices drop to a level that does not support extraction. The outcome is shortages that cannot be ameliorated because the oil — while underground as a resource — is not available at a price that can be supported by economic activity. This is the point the US and the world is @ currently. Note, this has nothing to do with ‘Peak Oil’.
Declining production is the subject of many reports by defense agencies including the US Department of Defense. Read these reports and prepare accordingly:
http://www.energybulletin.net/stories/2010-09-28/energy-security-annotated-militarysecurity-bibliography-2010-update
Shortages are already taking place in China and other countries. Affordability is shifted from region to region by the global finance system which is right now operating in ‘panic’ mode.
A consequence of shortages is a ‘zero- sum’ dynamic whereby distribution breaks down: fuel obtained in one region causes shortages in others. Note; the shortages will shift location but will be permanent. This is because the problem will be the costs of fuel relative to available money. When the shortage point is reached, building and selling more cars will make the economic problems appreciably worse.
Appreciable only because selling cars and other auto- related consumption enablers such as tract housing, freeways, parking lots, bridges and overpasses, box stores, malls and supporting infrastructure has actually been bankrupting the economy even as these have been creating ‘collateral value’ for a massive multi- decade debt bubble. The analogy is taking money out of the bank and burning it to keep warm.
One reason the economy hasn’t collapsed to date has been the decline has so far been self- limiting. Lower real estate values constrain ‘investment’ in real estate which in turn reduces fuel demand. This effect on fuel consumption has been seen in the US since 2008. What hasn’t changed during this period has been gasoline consumption so the economic ‘death drive’ continues unabated.
The real problem is the country is broke. This leads to the ultimate problem of low oil prices which means there isn’t enough cash to bid up prices. This will mark the decline and collapse of credit and credit institutions such as the TBTF banks.
In a ‘just in time’ economy the outcome of fuel disruptions is food shortages. Whether collapse described by the Bundewehr or Joint Operating Environment or even the International Energy Agency takes place this year or 2012 the effect will be massive and be felt first in food supply.
You have no idea how fast panicked people can strip even a large supermarket.
Be prepared. In ten years all the auto companies will be out of business. All of them.
People have been writing end of life as we know it diatribes for hundreds of years. So far, they have mostly been wrong.
You are going straight to the crucial point, Steve, though I feel there is no need to distance yourself from Peak Oil. Your assessment has nothing to do with what we like or dislike, it is an apt description of what the western world in general, and the US in particular, is facing. For those of you out there who’d rather close your eyes and stick your head in the sand, consider these facts:
* Oil is a finite resource, once it is burned, it is gone
* World population is growing exponentially
*Available energy per head is shrinking, at an increasing rate
* Hundreds of millions of Chinese are acquiring, or aspiring to, our lifestyle
* US Oil production peaked circa 1972 – 73
* World oil production is peaking as we speak
* No “new” or “smart” energy resources are in sight to replace oil
Conclusion: let’s all enjoy our ICE-powered vehicles as long as it lasts, it won’t last all that long.
So, what about alt. energy?
None of the sources we know today, or dream of using tomorrow, are even close to matching the efficiency of oil.
Tip: don’t think about any long term investment in the auto industry, or the aircarft/-line industry for that matter.
Prediction: There will be more “end of the world” as we know it diatribes cribbed directly from other websites as original thought by posters. Almost none of it will come true. You heard it here first!
Gee Steve, nice news. Glad tidings all around. I very much doubt that there will be such death and destruction in our lifetimes.
As for predictions… Mitsu/Suzuki will pull out of N/A. Mazda is hurting. I still say that they will reteam with Ford, not this year but soon. Ford needs to feel a little more secure and a little less in debt. GM is in trouble. Their product lines are fractured and some of the divestments they made 2 years ago are coming back to haunt. They are having problems both in Europe and in Australia and need even more resources to prop up those areas. None of this will lead to bankruptcy again but it won’t leave them in a strong position.
Chryco/FIAT is hanging on by the skin of their teeth. There isn’t anything more to cut. This year is key. Will the reskins sell? Will upgrading the interiors work? Will the FIAT nameplate still leave a bad taste in America’s mouth after 30 years? Can the 500 sell in sufficent numbers to establish a beachhead? I don’t know but we’ll be watching.
Toyota is being hit with schadenfreude right now but the actual effect is minor. By keeping their heads down and attending to their knitting they’ll finish stronger than when they started. Honda OTOH is in trouble. It’s obvious that the company is being run by committee, not by a strong leader. Weak designs from an engineering company is a problem. There needs to be someone firm at the tiller that will turn the ship around and they need to do it quick before all the goodwill that the Honda nameplate has built up is ruined.
It will be interesting what will happen in Europe. Peugeot is not all that strong. Renault with Nissan has the horsepower to do well but doesn’t seem to be in any position to dominate. Ford is with that morass in the middle. Move a few spots up or down but never very far. Big loser will be Opel. If it goes so does Vauxhall. Can GM keep propping it up? The big issue here will be the Chinese and the Koreans. The Japanese can’t get their shit together when it comes to Europe but Korea, namely Hyundai is a different animal. I can see them gaining a foothold by not bowing out to the political pressure brought to bear by the EU. China OTOH looks like it’s going to try to backdoor the markets through Eastern Europe. More Chinese vehicles with euro names will showup as long as they can keep up with NCAP. Watch Geely.
>>>I very much doubt that there will be such death and destruction in our lifetimes.<<<
But what about our childrens’ lifetimes? Or grandbabies’?
A fault of the economic and political POV that has been passed along to us is that it exaggerates the importance of our own lifestyle preferences while assigning no value at all to the interests of people who will be taking their places farther back in the line. Does that make any sense at all?
If you would complain about $5 gas now, how would you like to bid against what your great grandchild might be willing to pay for it?
Actually, Steve omits some other problematic considerations. In addition to oil (and food), the production of automobiles consumes big chunks of other resources — steel, plastics, aluminum, rubber . . . you name it. It’s all finite and future mining/production/manufacturing efforts will be more expensive, complex and intrusive, because it’s harder to get at supplies after the easy stuff has been harvested. You are quite correct if you counter that it’s not just automobiles that feed at the raw material trough. It’s all that other stuff, too,
Why do you think the military is doing white papers on the scarcity problem? Maybe it’s remotely possible that they want first dibs?
And what? The thing is that nothing is a steady state. Oil going away? We’ll have something else. Metals and minerals? We’ll mine the asteroid belts and the moon. Scarce water? Icebergs from Saturn.
Flights of fancy? No. It’s all about ingenuity. Every doomsday scenario ever written — and there’s been one hell of a lot of them ever since we came out of the caves — has never came about. Something has always changed, new sources, new technologies, new practices, whatever. It’s the history of mankind.
“Oh, it’s different this time.” Bullshit! Doomsday is not around the corner. We’re not imperiled. Neither are our kids or grandkids. Changes? Oh yeah. You haven’t seen anything yet!
Obviously absolute doomsday hasn’t occurred or we wouldn’t be here.
It’s only large numbers of people or large chunks of the population that have been devastated by regional or world wars, famine, epidemics like the Spanish Flu of 1918 that killed 50 million.
If there is mass economic disruption due to another oil shock or a debt crisis, there will only be mass unemployment, civil strife and probably disobedience, and a way greater chance for a dictator to take over to “solve” those problems like what happened in Nazi Germany.
I won’t speculate on the fates of the big car brands, mostly because I have nothing really to add to the conversation that hasn’t been covered by other, more knowledgeable people in the comments. But I do think that the small to medium sized high-end tuners will suffer greatly.
These companies put out extremely low volume products that also have limited appeal, at exorbitant prices. Why would you pay Ferrari money for a blinged-out Mercedes with a turbo on it? Most people wouldn’t, but there exists (or existed) a niche market. Much of it seemed to come from the ultra-wealthy in developing countries like Russia, Ukraine, UAE, etc. However, with the boom times over or slowing in many of these countries, and increasing hostility towards these oligarchs, extremely conspicuous spending is growing out of fashion, and these garish tuned Bimmers really attract the wrong type of attention.
There’s also a level of uneasiness in spending huge sums of money on products from questionably reliable companies: the modifications usually void warranties, or the owner of the tuner is found dead in South Africa, like with Gemballa. Also, the depreciation on these things is awful, even by supercar standards.
These tuners also have so much competition because there are so many, and they compete with the factory tuners like AMG or M-sport. It’s already begun: Overfinch, the Range Rover tuners have just filed for bankruptcy. Steve Saleen is in the financial toilet. The customer base for Lumma, Hamann, AC Shnitzer, Carlssonn, Lorinser, and the rest is drying up fast. These companies will not make it.
I do see the more established tuners, like Alpina or Brabus, coming out alive. They have factory support, good reputations, pedigree and prestige, strong dealer programs, and they don’t void warranties. They won’t be unscathed, and will probably suffer quite a bit, but at the end, they will have less competition, and will bounce back quickly.
The big thing was CAD/CAM and fast prototyping. It’s been astonishing how refined the one offs that have been showing up lately. Your Fiskers and what have you can do amazing things without a lot of back end support. Of course, when everyone is special, nobody is special. Boutique manufacturing has lost the cachet from when it was difficult and unusual. Too many products from too many people chasing a very small market.
The market will retreat back to value again which is name brands. A Ferrari badge is gold. Spyker, not so much. A pretty face will not trump a solid racing heritage.
Wow. When I tossed out the comment about hyperventilating cynicism driving Internet blogs, I had no idea that so many colorful examples would follow.
Marty, drop me an email.
rokem@netzero.net
Predictions for 2011:
People will run around screaming Peak Oil – until a another big oil discovery is made and developed – unless that discovery is in US territory, in which case the current administration won’t allow it to be developed.
People will say that we have to get car weight down and the NHTSA regulations will have to be curtailed from adding weight (like the new roof crush standards). But NHTSA will keep right on regulating and cars will continue to get heavier.
People will complain that pickup trucks have gotten too big and that too many buy them who don’t need them. But pickups will get bigger and heavier and too many people will continue to buy them who don’t need them.
People will say that the ascendancy of the electric car is here and automobiles will never be the same. But as in years past, it won’t happen.
People will say the ICE is dead. Then about that time a new technological breakthrough will make the ICE cleaner, more efficient, and more powerful than ever before.
People will say “if (fill in the maker) would make a diesel (fill in the vehicle), I would buy it tomorrow”. When tomorrow comes, the sales of the new diesel (fill in vehicle) sucks and the company loses money on it.
TTAC will keep hoping that GM or Chrysler goes out of business. But neither of them do.
Suzuki+VW deal.
Saab, Suzuki and Mitsubishi are all on their last legs. Of these Saab has the most problems so I think it will disappear first. Once the Fiat 500 arrives Smart is gone. Toyota can keep Scion around …and who knows maybe the new Subbie/Toyota small RWD coupe will be branded a Scion giving them a temporary boost with alot of buzz. Mazda and Volvo continue to be small players, but there is a place for them.
Suzuki+VW.
can you please please leave Saab alone, come on they have been dead many times, I perder that they are Zombies who can not be killed, come on people they have already out lasted everyones guess of when they would die give them some love. Now for all the other bashing about the world ending with no oil and no food, please people life will go on and we will find some thing to burn to make our stuff go as for food crap we waste more than most people need sad but true, now if I wanted to stir the world is ending debate I would start with water, with out that you are really screwed bit I am not tirring that pot ( and with out water the pot will not stir:) I am not saying I am just saying
I predict by December 31st 2011 no car manufacturer (>20,000 units per year in recent years) will disappear from North America or Europe, however I also predict several will be closer to disappearing than they are today, Saab? Tesla (I know they’re not nor have they never been >20,000 units per year but they are publicly well known)
Dead brands walking for 2012 even if nothing changes:
1) SEAT (OK, that is an easy one)
2) Scion – won’t go away in 2012 but this brand is on life support
3) Mitsubishi in North America
4) Suzuki in North America (and it’s a shame)
5) Tesla
6) Saab
If the price of gasoline in the United States breaks $4.00 a gallon for a significant period of time it could hurt:
1) Chevrolet (perception vs. reality)
2) Chrysler (reality vs. well, reality)
3) Toyota truck and SUV sales (the reality is their fullsize line up gets the worst MPG)
4) Mercedes Benz
5) Lexus
6) GMC (reality vs. reality)
7) Lincoln (perception vs. reality)
Winners of a sharp spike of gas:
1) Nissan (Cube, Versa, Juke, and lets not forget the Leaf, they are well positioned)
2) Scion gets a little Vitamin E (as in expensive gasoline) to delay the inevitable, the iQ actually might sell
3) The Prius – its Baaaaaaacccck – and driving in the passing lane at 50 MPH right behind it, the Hybrid Camry
4) Chevrolet Volt, Cruze and Equinox specifically, muscle lives on with the V6 Camaro
5) Tesla – MAYBE – at least they get more attention
6) Mini – well duh, with a name like Mini it has to get good MPG
7) smartfortwo (because there are enough dumb people out there to buy them)
8) VW – diesel, and I don’t mean Vin either
9) Hyundai – possibly one of the biggest, if not biggest winner, well positioned across the line up
10) Kia – see Hyundai above
Win, lose or draw, it just doesn’t matter unless an asteroid is coming to hit the earth:
1) Honda (despite their best efforts to kill themselves)
2) Ford (doing a lot right)
3) Hyundai (doing everything right)
4) Subaru (becuase that’s how their customer base rolls)
Actually the more I really think about it, only Honda, Hyundai, and Ford are well positioned for 2012 no matter what happens.
Ugh, I give up
With all the Panther platform love around here, I just thought I’d mention that today at approximately 8am the very last Mercury Grand Marquis rolled off the assembly line. Part of a fleet order, apparently.