Recent car-buying statistics tell a sobering tale about car sales. The federal government has purchased 25 percent of the Chevy and Ford hybrids that have been sold since President Obama took office — at least 14,584 hybrids in the last two years. Auto manufacturers no doubt are happy about the government’s decisions, because consumer demand for the vehicles is falling — for the third year in a row.
In the meantime, the government has committed to buy the first 100 Chevy Volts that roll off the assembly line. Who else is buying the Volt? GE, for one. It can’t resist the chance to get a $7,500 per vehicle rebate, funded by the federal government. Other big corporations that have corporate fleets are expected to follow suit.
Whatever you think of the merits of a Volt (and the car is viewed by some as too expensive, too small, and too limited in its range, among other issues) it is just wrong for the government to subsidize the sale of particular cars — especially when the cars are built by a manufacturer that is largely owned by the government. In this instance, the subsidies also are benefiting large corporations like GE that don’t need taxpayer assistance, and will allow them to curry favor with the Obama Administration and its “green initiatives” at a discount. GE is making billions of dollars in profits. Why are taxpayers helping GE buy cars? And shouldn’t the Chevy Volt succeed or fail on its own merits? Why should the federal government subsidize a car that could turn out to be a lemon?
Here’s an interesting piece on GM and “green cars.” The apparent focus of GM and Chrysler on “green cars” as the lever that will move them out of the ditch is wishful thinking. Sure, there are some Americans who will buy “green cars,” regardless of their quality and reliability, just to say that they are driving green cars. (See the classic South Park “smug” episode.) I think the number of those consumers is pretty small, however. Here’s a method of approximating that market — the next time you drive to work during rush hour, look at how many drivers are content with humping along in the slow lane, and then from that number subtract all white-haired drivers and all drivers who are shaving, combing their hair, fiddling with their Blackberry, or performing other morning ablutions. The remainder is a good approximation of the potential audience for hybrids and electric cars. You aren’t going to buy one if you must have a car that can give you the crucial burst of acceleration that allows you to cross three lanes of traffic and pass that slow-moving panel truck that has been getting on your nerves.
The other change in the car market — and one that has been devastating for GM and Chrysler — has been the increased focus of consumers on buying cars that last. When I was a kid, Americans seemed to accept that they needed to buy a new car every few years, just to have the biggest fins or the biggest engines or the station wagon with the most realistic faux wood paneling on the side. Those days are long gone, however. I’ve been driving my car for many years, have put more than 120,000 miles on it, and hope to continue to drive it for years more. The fact is that consumers don’t buy GM and Chrysler cars because they perceive that many of those cars are poorly made and unreliable. I think even “green” consumers will be looking for green technology that is reliable. Why buy a green car from a company that has a well-earned reputation for building poorly made cars when you can buy a proven green car from a company like Honda, whose reputation for quality is unassailable?
This article is interesting. If Americans want hybrid cars — a proposition that is by no means certain — maybe Ford has a future. To give a some perspective, 1445 miles is only 17 miles less than the distance between Columbus and Albuquerque, New Mexico. Pretty amazing.