Car Guy

GM’s $4,000 Car We Won’t Get

But we'll pay to help it capture the foreign market.

By 8.20.09

Send to Kindle

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.

You can't really blame GM for this -- as galling as it maybe to recall that American taxpayers were forced to chuck over billions in "bailout" loans -- monies that will surely be used to finance the move to those greener pastures, and with it, the movement of all those manufacturing jobs to places like India and China (where Buick is GM's hottest selling brand and a rising star).

We Americans won't get the $4k car.

We'll just get the bill for it.

Like this Article

Print this Article

Print Article
About the Author

Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.