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Old Nov 21st 2008 | 10:49 am
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Default Re: "Big Three" bailout ....

All 3 of them have suitable vehicles in their range, just not ones they sell in the US.

And some that are OK in other markets, Mondeo, seem to be much worse here.
 
Old Nov 21st 2008 | 11:01 am
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Default Re: "Big Three" bailout ....

Originally Posted by Boiler
All 3 of them have suitable vehicles in their range, just not ones they sell in the US.

And some that are OK in other markets, Mondeo, seem to be much worse here.
I wonder what it is that makes it so hard to 'transplant' cars? I can imagine
1) Safety regulation compliance - each country has its own set of rules; eg, I hear US bumpers (fenders) are designed to minimize cost of repair, while Euro bumpers are designed to minimize pedestrian injury
2) Emissions standards - each country is different. I THINK the US and Japan have the most stringent standards, but not sure.
3) taste/style - chrome and leather may be 'in' in one place, while cloth and stainless steel are 'in' somewhere else.
4) Weather conditions. Much of the US goes from one extreme to the other in a year; you need snow-capability in winter, and huge A/C capacity in the summer. This is not the case in much of Europe.
5) taxation, gas prices, etc. With gas prices so low in the US (relatively speaking, even now), people are less inclined to choose a small car. Further exacerbated by the fact that cars are not taxed that highly here - a new car here is cheaper to buy so again, you don't "need" to choose a very small, inexpensive car.
6) space - Anyone who's been to Rome or Paris (and to a lesser extent, London) can marvel at how small the streets are, the parking spaces are, etc. You wouldn't DREAM of buying anything bigger than a mini if you lived in these places (see picture below). The average American city is only just struggling to accomodate a Hummer or Suburban. So the desire/need to own a very small car is reduced.

I'm sure there's a lot more.

Picture below - small cars in Rome ... a scene that took my eye!
Attached Thumbnails "Big Three" bailout ....-200104r2-13a.jpg  

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Old Nov 21st 2008 | 11:52 am
  #108  
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Default Re: "Big Three" bailout ....

1- is a big issue, because in the EU, crumple zones are designed to lessen impact on a pedestrian being hit as well as people in the car, the bonnet has to cushion a head impact and the body hit is meant to throw you over the car to minimise damage, the US, it's to keep the people inside safe so a pedestrian would be thrown through the window...it's also because signposts/lamp posts etc in the EU are designed to bounce over a car in a hit rather than stand the impact like over here.

2- Don't know, different system entirely, could get a massive fuel improvement in the EU if they got rid of the O2 sensor ruling, basically in Japan they switch the o2 burn ratio depending on temp of engine, this gets much better stop start mileage, but the ratio has to change for long journeys or it is bad, in the EU, if the car has a 02 sensor the ratio is set, that setting is for best performance, so not good for traffic like use, the US is pretty similar.....tough standards in a different way.

3 - Makes no difference, it's modular design, it's how options are designed in, switch and swap for local market, no cost problem.

4- Not a problem for countries like Sweden etc, so no excuse over here, perhaps an improved air filter a/c for dessert conditions like they do for the ME market, but it's already been designed, again not a problem to modular inclusion.

5 - Yeah, can't help there, but convenient parking could be a selling point, well regionally like in NY, San Fran, Boston, aimed as a second car, thus increasing a car sale for having a inner city car...

Originally Posted by Steerpike
I wonder what it is that makes it so hard to 'transplant' cars? I can imagine
1) Safety regulation compliance - each country has its own set of rules; eg, I hear US bumpers (fenders) are designed to minimize cost of repair, while Euro bumpers are designed to minimize pedestrian injury
2) Emissions standards - each country is different. I THINK the US and Japan have the most stringent standards, but not sure.
3) taste/style - chrome and leather may be 'in' in one place, while cloth and stainless steel are 'in' somewhere else.
4) Weather conditions. Much of the US goes from one extreme to the other in a year; you need snow-capability in winter, and huge A/C capacity in the summer. This is not the case in much of Europe.
5) taxation, gas prices, etc. With gas prices so low in the US (relatively speaking, even now), people are less inclined to choose a small car. Further exacerbated by the fact that cars are not taxed that highly here - a new car here is cheaper to buy so again, you don't "need" to choose a very small, inexpensive car.
6) space - Anyone who's been to Rome or Paris (and to a lesser extent, London) can marvel at how small the streets are, the parking spaces are, etc. You wouldn't DREAM of buying anything bigger than a mini if you lived in these places (see picture below). The average American city is only just struggling to accomodate a Hummer or Suburban. So the desire/need to own a very small car is reduced.

I'm sure there's a lot more.

Picture below - small cars in Rome ... a scene that took my eye!
 
Old Nov 21st 2008 | 12:30 pm
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Default Re: "Big Three" bailout ....

Originally Posted by Bob
1- is a big issue, because in the EU, crumple zones are designed to lessen impact on a pedestrian being hit as well as people in the car, the bonnet has to cushion a head impact and the body hit is meant to throw you over the car to minimise damage, the US, it's to keep the people inside safe so a pedestrian would be thrown through the window...it's also because signposts/lamp posts etc in the EU are designed to bounce over a car in a hit rather than stand the impact like over here.

2- Don't know, different system entirely, could get a massive fuel improvement in the EU if they got rid of the O2 sensor ruling, basically in Japan they switch the o2 burn ratio depending on temp of engine, this gets much better stop start mileage, but the ratio has to change for long journeys or it is bad, in the EU, if the car has a 02 sensor the ratio is set, that setting is for best performance, so not good for traffic like use, the US is pretty similar.....tough standards in a different way.

3 - Makes no difference, it's modular design, it's how options are designed in, switch and swap for local market, no cost problem.

4- Not a problem for countries like Sweden etc, so no excuse over here, perhaps an improved air filter a/c for dessert conditions like they do for the ME market, but it's already been designed, again not a problem to modular inclusion.

5 - Yeah, can't help there, but convenient parking could be a selling point, well regionally like in NY, San Fran, Boston, aimed as a second car, thus increasing a car sale for having a inner city car...
So - if only the US and EU governments would cooperate on emissions standards and safety standards, the car companies could actually save lots of money by selling almost the same car in both places ... Hmmmm .... anyone got a hot-line to someone who gives a sh*t in washington so we can make a suggestion?
 
Old Nov 21st 2008 | 12:58 pm
  #110  
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Default Re: "Big Three" bailout ....

Originally Posted by Steerpike
So - if only the US and EU governments would cooperate on emissions standards and safety standards, the car companies could actually save lots of money by selling almost the same car in both places ... Hmmmm .... anyone got a hot-line to someone who gives a sh*t in washington so we can make a suggestion?
well we all know how well the kyoto agreement went over here, so I can't see anything happening, which is a shame because yeah, potentially, the car makers could save a bundle and make life a lot easier, but then you'd have that dodgy issue of making it easy for people to import their cars all of a sudden and the US wasn't to keen on that idea in the first place
 
Old Nov 21st 2008 | 1:00 pm
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Default Re: "Big Three" bailout ....

Originally Posted by Steerpike
So - if only the US and EU governments would cooperate on emissions standards and safety standards, the car companies could actually save lots of money by selling almost the same car in both places ... Hmmmm .... anyone got a hot-line to someone who gives a sh*t in washington so we can make a suggestion?
It ain't gonna happen. A primary reason for maintaining the difference in standards is to make it more difficult for imports to enter the US market. The minor players that can't afford the cost of federalization are effectively barred from the market. It's the sort of trade barrier that doesn't violate trade agreements because it isn't explicit in its intent.
 
Old Nov 21st 2008 | 4:49 pm
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Default Re: "Big Three" bailout ....

Originally Posted by RoadWarriorFromLP
It ain't gonna happen. A primary reason for maintaining the difference in standards is to make it more difficult for imports to enter the US market. The minor players that can't afford the cost of federalization are effectively barred from the market. It's the sort of trade barrier that doesn't violate trade agreements because it isn't explicit in its intent.
I can understand this, but then - how do (eg) Porsche handle this? Porsche is a small company that sells into both US and EU. Do they have a US line and an EU line? What about BMW - larger, but not massive, and selling essentially the same model line in both regions ...? Just curious ...
 
Old Nov 21st 2008 | 5:10 pm
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Default Re: "Big Three" bailout ....

Subaru
Saab
Volvo
Ferrari
even Lotus

It can be done, trying to think of major companies that have not tried at some time.
 
Old Nov 22nd 2008 | 12:01 am
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Default Re: "Big Three" bailout ....

Originally Posted by Steerpike
I can understand this, but then - how do (eg) Porsche handle this?
The cars are costly. Because those cars can command high prices, it's worth the effort in many cases.

The differences in standards deter those companies that can't sell the cheaper cars in volumes that are high enough to offset the low price point. The cost of federalization can be a nine figure affair -- for example, GM reportedly spent about $100 million to federalize the Astra -- which requires that a lot of cars be sold in order to hurdle the expense. (You can bet that GM took a bath on that, because the Astra has been a bomb here.)

That factor helps to keep players like Peugeot and Fiat from making the effort, and discourages the companies that are already here from bringing their lowest-tier products. If a car company wants to sell in the US, they need to be focused specifically on this market, they can't just grab a few things off of the shelf, and experiment to see how things go. It makes playing for the US an all-or-nothing affair.
 
Old Nov 22nd 2008 | 4:02 am
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Default Re: "Big Three" bailout ....

Originally Posted by Boiler
Saab
Volvo
Ferrari
First two are US owned aren't they? And Ferrari is Fiat owned, who are pretty large...
 
Old Nov 22nd 2008 | 5:03 am
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Default Re: "Big Three" bailout ....

Originally Posted by RoadWarriorFromLP
The cars are costly. Because those cars can command high prices, it's worth the effort in many cases.

The differences in standards deter those companies that can't sell the cheaper cars in volumes that are high enough to offset the low price point. The cost of federalization can be a nine figure affair -- for example, GM reportedly spent about $100 million to federalize the Astra -- which requires that a lot of cars be sold in order to hurdle the expense. (You can bet that GM took a bath on that, because the Astra has been a bomb here.)

That factor helps to keep players like Peugeot and Fiat from making the effort, and discourages the companies that are already here from bringing their lowest-tier products. If a car company wants to sell in the US, they need to be focused specifically on this market, they can't just grab a few things off of the shelf, and experiment to see how things go. It makes playing for the US an all-or-nothing affair.
The key here seems to be, '...the Astra has been a bomb here' ... GM have such a poor reputation for quality and small cars in general, that not many are willing to consider it, I imagine. At the lower end of the market, the price points are quite close, so - why would you risk $15k on an untested Astra when you can get a Honda Civic for not much more. I found this post on an auto forum that seems to have some insight into strategy. However, I disagree with the poster above who said they 'hid it' on the Saturn line; I've been of the opinion that Saturn represents the one ray of hope for GM, including a dealer network that aims for no-fun-and-games pricing.

Are you guys suggesting there was a deliberate attempt to setup different safety AND emissions rules in the US to deter imports, or just safety? I thought the US was something of a leader in emissions, in which case, if the rest of the world chose to implement different standards, they must have been the ones who made a conscious decision to be 'different'. As for safety, I was never aware of the differences so can't speak to that.

Last edited by Steerpike; Nov 22nd 2008 at 5:06 am.
 
Old Nov 22nd 2008 | 5:19 am
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Default Re: "Big Three" bailout ....

Originally Posted by Steerpike
The key here seems to be, '...the Astra has been a bomb here' ... GM have such a poor reputation for quality and small cars in general, that not many are willing to consider it, I imagine. At the lower end of the market, the price points are quite close, so - why would you risk $15k on an untested Astra when you can get a Honda Civic for not much more.
GM's Bob Lutz seemed to understand that GM's current US small car offerings weren't competitive. He went to Opel because it was the fastest way to bring a better small car to market. A bit futile at this stage, but that's what he had to work with.

Originally Posted by Steerpike
Are you guys suggesting there was a deliberate attempt to setup different safety AND emissions rules in the US to deter imports, or just safety? I thought the US was something of a leader in emissions, in which case, if the rest of the world chose to implement different standards, they must have been the ones who made a conscious decision to be 'different'. As for safety, I was never aware of the differences so can't speak to that.
Along with Japan, the US is the world's most progressive country vis-a-vis emissions regulations. In that regard, Europe should catch up with the US, not the other way around.

As for safety, the US seeks to be different. It has a right to make its own standards, but it does use them in order to limit competition. The grey market rules are a good example of that; Detroit and Daimler lobbied for them in order to make it more difficult to import used European-market cars.
 
Old Nov 22nd 2008 | 9:28 am
  #118  
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Default Re: "Big Three" bailout ....

Originally Posted by RoadWarriorFromLP
Along with Japan, the US is the world's most progressive country vis-a-vis emissions regulations. In that regard, Europe should catch up with the US, not the other way around.
I'm not sure its quite as clean cut as that, the US (California) has been ahead in emissions such as NOx and particulate/HC, however the tighter particulate standards have prevented diesels coming into the market resulting in the US being far behind in CO2 emissions.

It could be that a slight relaxing of the US particulate/HC standards would give an overall emissions benefit - perhaps the US ought to drop down to the EU level?
 
Old Nov 22nd 2008 | 9:56 am
  #119  
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Default Re: "Big Three" bailout ....

Originally Posted by Bob
First two are US owned aren't they? And Ferrari is Fiat owned, who are pretty large...
An example of Companies who export to the US outside of the large producers.

US may or may not have higher emission standards at point of sale, but as there are very few subsequent checks my guess is that the average of vehicle life must be worse.
 
Old Nov 22nd 2008 | 10:12 am
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Default Re: "Big Three" bailout ....

Originally Posted by Cape Blue
I'm not sure its quite as clean cut as that, the US (California) has been ahead in emissions such as NOx and particulate/HC, however the tighter particulate standards have prevented diesels coming into the market resulting in the US being far behind in CO2 emissions.

It could be that a slight relaxing of the US particulate/HC standards would give an overall emissions benefit - perhaps the US ought to drop down to the EU level?
I don't have an issue with diesel, per se, but it is no panacea and I don't see it as being particularly eco-friendly or providing a viable alternative.

There are a lot of diesel fans out there, I know, but there seems to be a basic misunderstanding of why they get better fuel economy.

To put that into context, let's understand that CO2 emissions per mile are related largely to mpg. It's true that diesels do tend to get more miles per gallon, but here is the primary reason: because diesel fuel has a higher oil content. There is more energy contained in a gallon or liter of diesel than in petrol, but that reduces the quantity of gasoline that could be otherwise produced by a greater amount.

A barrel of oil is comprised of many components, including those that make up gasoline and diesel. The refining process can change the mix a bit, but a barrel still inevitably has some of each.

When you look at from a macro view, the diesel doesn't really create benefit.

If you produced more diesel, you would end up with fewer units of fuel, because of the higher oil content in the diesel fuel. Since you need more oil to produce a quantity of diesel than you would an equal quantity of gasoline, you haven't saved anything.

Diesel motors do have a slight inherent technological advantage because they run with higher compression ratios. However, as gasoline engines evolve in their ability to run at higher compression, that benefit will be negated.

Diesel motors also get a slight benefit from the fact that they are turbocharged. But those benefits can also be gained by turbocharging gas engines. By replacing larger naturally aspirated (non-turbo) motors with smaller turbo'd versions, the same advantages can be gained by gas motors.

Also, the cleaner emissions from ULSD come at the expense of some lost fuel economy. The trend here is for diesels to lose advantages while gas engines gain advantages in comparison, so migrating toward diesel would be a move in the wrong direction.

The US already consumes a lot of diesel, it just does so with its heavy equipment, rather than with passenger cars. There is no benefit to be gained by trying to change this mix.

The inevitable result would be to raise the pump price of diesel fuel, because US refineries would have to be modified at great expense to change their refining mixes if the shift was dramatic enough, and the consumer would have to foot the bill.

The US could end up like Europe, which has had such a dramatic increase in diesel consumption that it has resorted to importing diesel fuel while simultaneously exporting refined gasoline, because its refineries are also not capable of handling the demand. If you want to know why European diesel prices have been rising more quickly than gasoline prices, despite the tax differences, that explains much of it.

Biodiesel is no solution, either. There is no way to produce enough of it to make a significant difference. Even in the best case scenario, the world could not meet more than 5% of its diesel needs with biofuel. The EU 10% standard is a bit ridiculous, as their use of it will only take it away from someone else.

Last edited by RoadWarriorFromLP; Nov 22nd 2008 at 10:16 am.
 


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