Guest Post by Eric Peters
GM’s Buick division is doing extremely well . . . in China. The Chinese own Volvo. And may soon own Jeep – one of the few still-viable pieces of what used to be Chrysler.
For now, it’s FiatChrysler.
Emphasis on for now.
Fiat invested in what was just Chrysler, hoping to use the once-Big-Three company as a kind of Mulberry Harbor – the floating piers used by the Allies during the Normandy invasion toward the end of WW II to establish a beachhead in Europe – only this time in America and cars rather than troops. But unlike the Normandy invasion, the Fiat invasion has been a flop so far. 
Sales of the company’s signature car – the 500 mini-car – are down almost 50 percent to just over 1,000 cars a month from a high of about 2,500 cars a month back in 2014, two years after Fiat’s return to America.
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And that’s the high water mark.
Other Fiat models aren’t doing nearly as well.
Sales of the 500L – an upsized version of the 500 – are as lifeless as Dracula’s corpse, with the difference that Dracula rises at night. Fiat hasn’t sold more than 184 in a month so far this year. And that was a good month for the 500L. A bad month was February; 72 cars got bought and that’s it.
The only thing that seems to help boost Fiat’s stock is the rumor about Jeep. The Chinese are very interested in buying the one un-cankered portion of the FiatChrysler conglomerate – chiefly because China is a kind of Asian revivication of 1950s America and its middle class desires large, powerful vehicles – like the SUVs Jeep specializes in and because it has a rising middle class that’s able to afford them.
America’s middle class, meanwhile, continues to wane like Hugh Hefner’s bedroom prowess.
It’s not that Americans have changed their minds and no longer want large, powerful cars. The problem is they’ve been economically eviscerated by an economic system that pillages them via taxes, on the one hand, for the benefit of a growing army of permanent entitlement moochers and the bureaucracy that’s parasitical upon them and then the double-penetration thrust of regulations that have made large, powerful cars exorbitantly expensive and thus, beyond their means.
Consider, for instance, the flat-lined Dodge/Chrysler portfolio, starting with the Dodge Charger sedan.
This car is, in terms of its general layout – rear-drive, heavy steel frame, V8 engine – very similar to the cars middle class and even working class Americans routinely drove during the heyday of America’s working and middle class, from (roughly) the mid-late 1950s through the mid-late 1970s.
What’s not similar – and accounts for the sales plummet – is the price.
The V8 Charger stickers for $34,995 – equivalent to the buying power of $5,600 back in 1970. And back in 1970, you didn’t need $5,600 to buy a large, rear-wheel-drive sedan with a V8 engine. You could, as a for instance, have bought an Oldsmobile Delta 88 for about $3,800.
And the Olds was a near-Cadillac.
$5,600 – back in 1970 – could also have bought you a V8 Corvette, Chevy’s most expensive model – and left you a few hundred bucks for gas and tires.
In between then and now, the price of cars got higher but the means available to middle-class Americans did not rise to keep up.
Fast forward to now and cars like the ones Dodge (and Chrysler) sell are not selling – except to the government (which has unlimited funds) which buys up fleets of Chargers for use as cop cars. But otherwise, forget it.
Meanwhile, China.
It is an unplowed field, rich and loamy. Brand-new superhighways, as opposed to our ancient and decrepit ones. A chunk of real estate roughly analogous to the continental United States but instead of a tired and worn out population hag-ridden by debt and with its back to the wall, a potential market at least three or four times as large and flush. Did you know that the Chinese car industry is the world’s largest car industry? That it produces more cars than the U.S. and European car industries combined? That it grows by double digits, annually?
There is a damned good reason why GM hasn’t killed off Buick.
The brand is an irrelevance here – because there is no longer a market here for a nicer-than-Chevy but-not-quite-a-Cadillac. The Americans who bought cars like that are either mostly dead or getting ready for death, whiling away their remaining hours watching Matlock reruns in old folks homes. The cohort immediately behind them, meanwhile, is trying to figure out how to afford the monthly payment on a Honda.
And the cohort behind them – the Millennials – have tuned off to cars generally, as a generation. They are the ride sharing generation. Because when you can’t afford to buy, you rent. Cars, to them, are a burden. And they are.
Financially, at least.
The whole ride-sharing thing is premised on the realization that there’s only so much peanut butter left in the empty jar; it is a finger desperately trying to reach the last scraps sticking to the wall.
But China?
It’s like a case of unopened jars of peanut butter. Cases. Stacked a mile high and as far as the eye can see. One-point-four billion Chinese, lopsided to the left of 50, in their prime car buying years and with the means to buy cars and the desire to buy them.
How do you say “Motor City” in Mandarin?
Elio like cars will be the future here and even they will have to be manufactured in India to avoid the government taxes on the US employer (income, SS, medicare, medicaid, unemployment, workers compensation, liability, property, health, etc).
Waste of an article. Nice job to peters for writing an article about the Chinese auto industry that doesn’t say a word about it.
You deserve so much better for free. Ranks right up there with your free education
The moocher class along with many of the free shit army were in many cases forced into that role not by choice .
You are 30 you just reached 11 years with a company with retirement and good wages and other benefits . Pow the lay off Boom the shut down & Zap the bankruptcy and that 30 year pension you were a third of the way to evaporated . You struggle and work other jobs but the pay never matches the benefits are priced out of reach but you hang on raise your family reach mid to late 50’s and get sick “REAL SICK” ! Can’t do even 1/4 of what you did at 30 . Old used up you grab for disability and Medicare . You and your employers were required to pay into that for the 42 years you worked . Now your a moocher . Then so is every retired cop school teacher fireman and any other government employee .
Unless the plan was to use average people like Dixie cups and throw them in the dump when your done . Should that be your thought : may you die a slow miserable death while people who could help don’t !
That’s probably not any workers desire but it is common now and for the foreseeable future; that is the downside of Globalism’s low prices.
The problem is not necessarily the lower prices, the problem is our economic structure here in the US. Because of our governments addiction to borrowed money – out of thin air – things that cannot be manufactured on a printing press, and handed out to “friends of the fed” get more expensive, as apposed to cheap labor, which gets cheaper when you start employing people from other countries that don’t have over priced houses, education, healthcare, taxes etc.
I doubt strongly that a person would need a six figure income today IF they could buy a home for $30,000 or a car for $3400.00. The problem is that our stupid fuck populous cannot understand basic math, and thinks that you are rich making six figures, when a common home costs $500,000, an education costs $80,000 and a simple car costs almost $40,000. The fact is that you are the same place, if not a little worse off making $100,000 now, with assets costing what they do, than our parents when they could buy a home for $30,000, but only made a couple of hundred bucks every month….
We are on a road to nowhere until our idiot countrymen / women figure out how they are being robbed, and do something about it, instead of just continuing to “get an education” so they can make a “six figure salary”.
Well said , who are you going to kill first second and on and on it goes because waking up to the problem doesn’t do shit . Voting doesn’t do shit . Bitching and protesting doesn’t do shit …….
Knew this was coming for a while. Love Jeeps, on my third one now since 1994. I am 62 and perched on the brink to be in the dustbin of history as well. So sad to see so much good go to waste.
This is one of your most dishonest articles yet. Americans are not buying any 4 door sedans at al, let alone big rear wheel drive sedans because they are STUPID. Americans are buying vastly overpriced SUE’s while many desireable sedans sit in spite of deep discounting. The new Chevy traverse is $16,000 MORE than a loaded Chevy Impala, but people want the Traverse. I am not trying to be rude, but the author of this article is either a pathological liar of a 30 generation inbred imbecile.
http://oilprice.com/Energy/Crude-Oil/Gasoline-Shortages-Loom-On-East-Coast-As-Colonial-Pipeline-Shuts-Down.html
The destruction Hurricane Harvey leaves in its wake has prompted the shutdown of a major fuel artery to the East Coast, the Colonial pipeline. The pipeline, which has a daily capacity of over 100 million gallons of fuels, has two lines, one for gasoline and one for diesel and jet fuel. The diesel and jet fuel line shut down yesterday and the gasoline line, already operating at a reduced capacity due to lower refinery output in Texas, will be shut down today.
http://oilprice.com/Energy/Gas-Prices/Looming-Gas-Shortage-Imports-Cant-Make-Up-For-This.html
Yep. Meanwhile the Telab.an will mounting machine guns on 30 year old Toyotas. Just add oil and there good to go.
Let’s face it. Toyota is a superior brand. As the Romans said keep that man Archimedes alive . We can use that man.
Ah am da mota sit e ah mad maun, and ah I a speek of a wang dang and ah sue weet poon tang, dey ah are my mudder and ah fauder.
Translation: My mother evidently was a stupid whore in Detroit who died of AIDS and my father was unknown so they named me Mr. Anon Anonymous.
Communist China is the manufacturing powerhouse it is thanks to the treason of Bill Clinton and the Republican-controlled 106th CON-gress via their implementation of Permanent Normal Trade Relations for the ChiComs, in May of 2000. They sold American manufacfuring and wealth down the drain with the transfer of said manufacturing to the Red Chinese.
Manufacturing creates wealth. Goodbye Amerika. Hello the Peoples Republic of China.
The US auto industry and it’s union have only themselves to blame for the destruction of the auto manufacturing in the US. And it’s not going to get better, no matter what the R’s or D’s say. The only reason Ford can still function without a huge bailout is that they saw the future and spent the $$ to change. GM and C need to go away for good, with all of their pension liabilities cut down to social security and medicare benefits. The UAW in 170 had 350,000 members, today 35,000. Yet labor costs are as high as ever as retiree costs continue to gouge the average car buyer thousands of dollars. Only when the auto makers spun off their part suppliers and then the suppliers went bankrupt form the labor costs, could what is left even survive. When the Cincinnati OH GM plant when was closed, it was sad to see high school dropouts whose family connections got them 6 figure jobs realize they had no chance to ever make so much for doing so little. When the hourly workers have better retirements than the engineers and professionals, it’s not going to work out. Bye Bye, Bye Bye!
I was the supply clerk in 1984 at an ITT factory in Cairo, Georgia that manufactured automobile wiring harnesses for Detroit and our truckers said that Union workers up there mostly sat on their butts. That’s one reason that industry moved out of Detroit.
Mr. Peter’s again uses a vehicle platform to continue his old saw that “it’s the goobermints fault.” What he fails to mention is that when Fiat bought Chrysler from Cerberus we were in the midst of the biggest oil price spike since the 1970’s. People were trading in their guzzlers for econoboxes and Chrysler had none to offer the market since they had previously gone all-in on the rear drive LX platform which is not a fuel sipper. The Italians thought they’d found the perfect timing to move in with their product line in an established dealer network. Unfortunately the global economy tanked and with it fuel prices and suddenly American’s wanted their CUV’s again.
He also fails to mention that large rear drive sedans went out of vogue with the American car buyer back in the early 90’s. Here we can blame them Germans at Daimler for ditching a rather successful LH platform for the LX cars. 1960’s-70’s nostalgia only goes so far and again Chrysler was late to the retro party. Sales of the Intrepid and it’s sister LH cars didn’t slow because people wanted their oversized hot rods and land yachts again, they were buying SUV’s and the only one Chrysler offered worth a damn was the Jeep Grand Cherokee.
AND those SUV’s cost a whole lot more than the Dodge Charger at $35k and people are buying lots of them (on credit).
Actually going back decades Chrysler is one bone headed move after another. Sure, they have some hits that keep them going like the minivan and Jeep. Outside of that they pretty much suck, no matter who owns them. They should’ve gone tits up in the 1980’s. Good riddance.