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Car Guy
GM's $4,000 Car We Won't Get
Here is a starting tidbit:
In coverage of GM's reported intention to produce a $4,000 car, the company revealed that its near-term "goal" is to "have 75 percent of its sales" outside the United States.
Your tax dollars at work.
Now, the $4,000 car is a fine idea. It represents a return to economic sanity. It would be simple and affordable. No six year payment plan. No $40,000 "investment" (like the completely insane Volt electric car) that will depreciate to less than half original MSRP sticker price by the time it's finally paid off. No GPS, closed-circuit cameras, power parallel parking systems, multiplexed seat heaters or built-in coffee pots.
Just, you know, basic transportation.
America needs this right now. Or rather, tapped out Americans need such a thing right now. The proposed $4,000 car costs less than the government's loathsome "cash for clunkers" giveaway -- which forces some taxpayers to subsidize the "purchase" (loosely used) of a new car by others. Instead of ripping off one group of taxpayers to provide a government giveaway to another set of taxpayers, GM's $4,000 car would represent honest productive effort, free exchange -- goods produced by a market that freely consents to buy them. People would get the basic, inexpensive transportation that has largely disappeared from the new car marketplace. GM would make money.
What a concept.
But, here's the catch: GM won't be able to sell the $4,000 car in the United States. Because in the United States, new cars must be "government approved" before they can be approved by consumers. And to be approved by government, a new car must be fitted with a horn o' plenty of government-mandated safety and emissions control equipment.
"Safety" and "low emissions" may be laudable, but they aren't free. The federal requirement that each new car be equipped with multiple air bags is alone worth an estimated $1,000-$1,500 per car -- or one-third to nearly one-half the projected final cost of the GM $4k car.
In so-called "developing countries," there are not (yet) such requirements (which explains why they are still developing while we are treading water and about to go under). And it explains why GM will be selling its $4k car in such countries rather than in this country.
GM knows the United States is a dying market for new cars -- mainly because Americans are increasingly no longer in a position to buy them. And they are no longer in a position to buy them because they have become so expensive (an average mid-sized family sedan such as the Toyota Camry or Chevy Malibu typically sells for around $25,000). And they have become so expensive because of the endless conveyor belt of new diktats issuing forth from the DOT and EPA in Washington.
Until The Crash, we were able to pretend we could afford all this via the helpful hand of easy credit and by dipping into the bubble-financed "wealth" of artificially (and temporarily) jacked-up real estate and 401k portfolios.
Now it's all gone and not likely to return.
But the mandates continue to flow (most recently, the congressional edict that all new cars average close to 40 mpg within a few years -- no matter the cost).
GM knows there's no future in this -- or here. And that is why it is shifting its corporate gaze to greener pastures, where it expects it will be doing 75 percent of its business within just a few years.
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Dale Huffman| 8.20.09 @ 7:25AM
Thank you, I have privately been mourning the loss of the $3,000 car for about 40 years now. My only question: Why is this just coming up now, and why only here and not on the front page of every newspaper in the country? I ask this as, I think, the only non-fat cat in the country, who is not just skinny anymore, but on the very point of starvation. Why do all those oh-so-serious and yet oh-so-widely smiling faces in the media want me dead?
Robert| 8.20.09 @ 8:36AM
Dale,
You will be on the Obamacare death list because you are no longer a cash cow he can plunder to pay back the constituents who fraudulently got him elected.
Surely it's some consolation to know that you won't be there to help ACORN, Soros, the New Socialists, and all the other 'progressives' in this country scheming to turn the US into the USSR (United States Socialist Republic?
jerryofva| 8.20.09 @ 8:52AM
This is one of Eric Peters more inane columns. This $4K marvel is not a 1967 Plymonth Valient and it isn't even a Smart Car. If you want cheap motorized transportation you can get a 250cc powered Honda or Kawasaki motorcycle for $3.5K and it will be a lot more fun to drive.
Sean| 8.20.09 @ 9:38AM
I agree with Peters. There is a market out there for cheap new cars with no frills. If only we can get the government out of the auto industry. Some of the blame needs to go to auto dealers and state governments that limit the way cars can be sold to customers also.
Tim| 8.20.09 @ 10:00AM
Correct me if I'm wrong but before any metal even gets stamped for an American car there's $8,000 worth of Government induced costs and another $5,ooo of union benefits to be recouped.
JP| 8.20.09 @ 10:40AM
I can vaguely remember the Chevy Gremlin circa 1972-1974. I believe it was the last auto to have a sticker price under $1000 ($999). I also remember the AMC Pacer ($3000), and the Ford Pinto and Chevy Vega -all sold for under $3000. All were pieces of sh!t.
A $4000 car in this day and age would probably be no better.
L. Ross| 8.20.09 @ 11:03AM
Mr. Peters:
Correct me if I am wrong, but GM builds this inexpensive econobox and sells 25% of them in the United States, wouldn't they in fact be selling them in the United States? Couldn't I buy one, possibly after a wait?
Also, regarding the Volt. If this car is able to get 230 mpg while holding an expensive battery pack with enough juice to drive for 40 miles on batteries alone, why don't they just make it into a more conventional hybrid. Same drive train, same engine, but only enough batteries for a 5 or 10 mile run before the motor kicks in. Those batteries have got to be a significant portion of the cost, and when you factor in the weight savings from few batteries, smaller motors needed because of less weight, you might be able to build an even higher mileage car with lower cost.
By the way, JP, the Gremlin was an AMC car like the Pacer. Where was AMC's government bailout when they needed it?
I used to have a 72 Beetle. Terrific car. Cheap, reliable. Terrible defrost and heat in those Colorado winters, though.
Jack| 8.20.09 @ 11:07AM
Actually I owned an AMC Gremlin. Straight 6 3 speed. That car got me from point a to point b for 10 years and never once gave me a bit of trouble. I had over 200k miles on that engine and It was still going strong when I gave it to my brother. Wish I still had the little thing.
Appleby| 8.20.09 @ 11:32AM
Here in Canada the new sport is Smart Car Tipping, which is the urban version of cow tipping. Fun loving hooligans, er, Victims of Society are seeking out the little punch cans on wheels and tipping them on their sides or their roofs -- because they can, and because frankly stupid things look like turtles when posed that way.
Of course this does damage to the cars and infuriates the owners, but hey, where's your sense of humour?
Besides being buried when the snow plow comes by, not to be seen again til Spring, these little cheap cars are simply not safe to leave around. How about the day when some fun loving frat boys tip your car over with you inside it?
Peter McGrath| 8.20.09 @ 11:51AM
Government Motors is an unfunny joke, sustained by massive infusions of tax dollars solely for the purpose of avoiding the much deserved annihilation of the autoworker unions. Any sane person purchasing anything from this once-great private company needs to have their head examined. Know that each vehicle purchased from this crap company is another nail in our collective socialist coffin.
Martin Owens| 8.20.09 @ 12:09PM
So, the only remaining question is whether, in 10 years or so, GM will signify "Ganesh Motors" or
" Guangdong Motors".....
"Angry White Guy"| 8.20.09 @ 12:39PM
Not surprising that Government Motors is going to sell cheap cars to foreigners when you realize in the cash for clunkers schemes Canadians and other non-US citizens could get American taxpayers to help them buy a new car. What else can one expect from the American hating Democrats.
Dale Obama and the Democrats want you dead, because they are good for nothing bastards and you're taking up space from a Muslim or Polar Bear -- both unnecessary for the survival of civilization.
Michael Tomlinson| 8.20.09 @ 1:18PM
Who wants a GM? Not me! I wish Barack Obama would give me a big subsidy so I could buy a BMW. Now that's a car.
Thomas O. Meehan| 8.20.09 @ 6:01PM
One reason that American car makers don't build small, cheap cars is that they don't like competing against themselves. That is, every Chevy "el cheapo" sale is one less Buick sale.
Also, it's just not economically possible to make small cheap cars using expensive American unionized labor. The cars have to recoup the costs of production.
But there is a need for basic cars and I'm afraid that the anti-innovating and cost generating hand of Ggvernment bears much of the blame. An American equivalent of the old VW might be possible if labor costs could be kept down and the design had some interesting engineering aspects that would capture American imaginations. I'm eagerly awaiting it.
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Pingback| 8.21.09 @ 6:38AM
GM’s $4,000 Car We Won’t Get « links to this page. Here’s an excerpt:
Richard Baker| 8.21.09 @ 10:18PM
JP:
I had a '73 Pinto wagon, my personal favorite, and a '76 Pinto hatchback on which I put nearly 95,000 miles each with little or no maintenance while getting 28-31 miles per gallon. Basic transportation for a, then, young soldier who needed dependable transportation. I'd buy this model car now, if I could.
S Atkinson| 8.21.09 @ 10:42PM
When GM decided to "trim the fat", why did they choose to cut the Saturn? LOL.. Corporate greed. Just in case none of you noticed, they kept the name-tags on the MOST EXPENSIVE models, and only out of shame did they decide to ax the Hummer. Corporate Greed is alive and well!
GH| 8.21.09 @ 11:40PM
Um...let me guess... You would not be someone who is in a position to have to purchase one of these vehicles. So, sure, a car without airbags and other "frivolous" safety features for SOMEONE ELSE seems like a great idea to you.
And as far as those ridiculous emissions standards- obviously you and your offspring breathe a more rarified air, no worries about asthma, bronchitis or emphysema for your family. Nor do you care about acidification of the trees, soil, ocean or waterways. That'll fall into your kid's lap, so ...screw 'em.
Let's insist that America become more like the third world countries (that is what you're espousing, eh? That you admire "India and China" because the rich there are far, far richer than the poor -- and you think that's the side you'll wind up on.) So, yeah... let's fire up some tin foil death traps and sell them to the desperate... You can always get another maid.
Richard Baker| 8.22.09 @ 5:23PM
GH:
If my car is getting 28-31 miles per gallon with '70s technology please tell me how I'm not running clean and efficient? I doubt your late model car is as effective. If you want all this government mandated "safety" equipment all well and good. I don't drive expecting to "survive" the crash, I drive to avoid them as I learned when I was stationed in Germany. If you are in fear for your life when you go to drive then please cower in fear by yourself and get out of our lives!
Larry Disney| 8.23.09 @ 7:53PM
We're all GM shareholders now. We should get a car for FREE! :-)
I knew it| 8.24.09 @ 1:03PM
That's right, blame GM for building that big SUV you been driving around in for 6yrs because they didn't do any market research and just assumed that is the type of vehichle you wanted. After all you had no choice right. Get a clue. I have bought quite a few of the domestic produced econo boxes that have been traded in for the bigger luxury rides in the last 15yrs. Got em cheap too. Resale was nothing on em. Go figure. Now there is a rush for GM to build a fuel efficient car people can afford? They always have. You whiners just never bought one.
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Kendall| 10.4.09 @ 3:10PM
Agree, a sub $5000 car would be a lifesaver for most people in the US. Issues, in addition to the reasons listed above are that many people simply don't feel safe in smaller cars, And smaller cars just don't have the room most people need.
an't blame the automakers for the SUV's on the road, people buy what they want, and the SUV was the only vehicle that provided the room most people needed.
My complaint with the US automakers is that you can't walk in and buy a 'basic' truck. The option list has has everything in packages, and trying to get rid of them is useless. Abare truck can only be purchased if you want a fleet of truck. I've talked to a hundred different dealers, and except for imports the only way to get a truck is with a slew of options I don't want or need.
Sell me that truck, and I'll go back to driving new US made trucks.
Ken.