What’s Wrong With The Automobile Industry

I went to the Philadelphia Auto Show this past weekend with my family. We are starting to look for a car to replace our aging minivan. We’re having the debate I’m sure many families are having- Are the kids old enough to justiofy something other than a minivan? Do we really need the third row seating? Which options are MUST haves versus luxuries that we might add if the cost is reasonable?

In the past, different car makers had very different vehicles. You could tell a chrysler from a cadillac without looking for the manufacturer’s symbol on the grill. This is ebbing away. There’s surprisingly little to distiguish between most car models, especially in the “family vehicle” market- SUV’s, cross-overs and minivans. The Honda versions look like the VW versions; the Volvos are the same, just a bit boxier; Toyota, Saturn, GM, Chevy, Ford…even Mercedes has something that looks similar and serves the same functional difference. The sameness means there’s less difference, so the decision making points come down to much more mundane matters that auto companies can’t control. Your finances, your individual preference for where the cup holders should be, and how you feel about fuel economy.

The companies seem to be churning out a “sure thing” rather than making something that really stands out in the field. There is so much same old, same old. It was hard to get excited about anything. My husband even joked you could shop for cars as effectively in the parking garage next to the auto show, seeing who is driving what, and asking them what they thought- a “field” version of consumer reports, right there. Plus, anyone who has been to a mall, school, or shopping venter knows that every car is looking more and more the same, and it often looks like there are secret SUV and minivan breeding experiements going on in the lot while you are shopping. Your Golden Tan minivan was parked next to a blue one, and now a vaguely green one is sitting beside it, like they had offspring in the short time you were away.

So let’s just take a look at the similarities up close and personal.

All the information on fuel economy and price is based on notes I took off the actual window stickers on the vehicles presented at the Philadelphia Auto Show, February 4, 2007. Different models have different options included- we just wrote down approx. cost and fuel economy off the stickers so we could cross compare later on. It’s not strictly Apples to Apples, but it certainly gives you the ball park, and an insight into the decision making we all have to do in the real world about these things. I’d love to hear your opinion on these things, and how you make decisions for your family.

The huge SUV’s like the Ford Explorer or the Expedition have really awful fuel economy. They’re simply huge. So for a family of 4, we rule this class of vehicles out immediately. Too big, too costly to operate. Too Costly, almost any way you slice it. Even when you compare the Volvo SUV to the Tahoe, you get similarities- both get 15 miles city, 20 highway and cost +/- $50,000. Even the VW Toureg has 17/22 for fuel economy and starts at a base price of $56,000, and the decked out version at the show was over $70,000! I left that display saying “I just can’t imagine paying that kind of money for a VW.”

When you get to the minivans, the fuel economy gets a bit better- 19/26 for the Honda Odyssey and 19/26 for the Toyota Siennna (what we currently have). The prices start around $35,ooo and go higher, up to $43,000 for the decked out Sienna with leather interior, etc.

The cross-over SUV types like the Toyota RAV4 and 4 Runner, BMW X5 and x3, Nissan Armada and Muano, Saturn FWD, And Acura MDX/RDX series get roughly the same mileage as the minivans. 17/22 on average. The RAV 4 does a bit better with 24/30 on the 4 x 2 and 21/28 on the 4×4. Some have 3rd row seating, some have bench seats in the 3rd row, and others have split seats (which I think is just more practical day to day- why would a manufacturer go for the all or nothing option back there? I don’t get it.) Prices on these cars with a nice selection of amenities, as shown at the Auto show, are in the $37, 000 to $46,000 range. The Nissan is a bit cheaper at $31,000, the 4Runner is $33K, and the RAV4 4×4 is $30,ooo.

We then went and looked at the upscale cars. Just to see the difference, we thought. And you find that Mercedes has an M and R class vehicle in this general range, starting around $42,000. Even the posh GL starts at $51,000. And you can get the Lexus SUV-type hybrid with 31 city, 27 highway mileage for $51,000. And the mileage factors for these upscale vehicles are essentially the SAME as every other SUV out there (17/21), except the hybrids, for obvious reasons.

So how do you differentiate all these vehicles that look VERY similar, serve similar purposes, cost about the same, and get similar gas mileage? This is ultimately going to be about brand and service, because there’s very little else to differentiate them on. Some do have more or less interior room, the feel is different, but largely they are all pretty much equivalent.

My husband and I are not flashy car people. We are entering middle age, so we want something comfortable- we’re not quite as ready for a stiff car like a Jeep. Something family friendly. Our kids are almost through the spills in the car phase, but not quite. We still take plenty of road trips in the car, and haul a fair amount of stuff around. We go to Home Depot and Lowe’s. We need to drive more than one kid to karate, play dates, events, etc. Since we met as undergrads, we have had a succession of vehicles over the past 20 years, new and used. We have owned:

  • VW’s (my first car was an ancient VW Rabbit);
  • Mazdas (I loved my little 626),
  • Saturns (my first car out of law school and the one we had when our first child was born),
  • Suburus (love the Outback but HATED the service department ),
  • Hondas (Loved my husband’s Accord- he had it for years),
  • Toyotas (an old hatch back thing Matt drove for a while, and now our Sienna)
  • And my husband’s current car, a MINI Coooper S.

So when choosing a new car, do I want to go with a company with whom I have some experience and familiarity with local dealers and service people, or do we want to try something new?

My husband and I are modest people. We’re doing fine financially, but we are not interested in buying vehicles or things just to show off to the neighbors. Matt bought the MINI Cooper because it’s a fun car, yes, but it’s great on gas and a perfect commuter vehicle for him. We can still fit everyone in for a day trip into (name the city of your choice) and get parking anywhere. (Ok, so we are lucky the children are still not full sized humans.) And it was frankly, very reasonable. The service experience at the MINI dealer, part of BMW, has been exceptionally good overall. They understand customer service and making owners feel like family unlike any other car company I have ever come across. We are enthusiastic owners, even if we don’t participate in the weekend MINI owner get togethers they sponsor. (yes, seriously, MINI does this. They send you cool stuff from time to time in the mail. I love them.)

We think and laugh about the line from the Nicholas Cage-Sean Connery movie where Nicholas Cage says “I drive a Volvo. A beige one.” to demonstrate his run-of-the-mill middle-classness. It seems to fit us. You become parents and the racy vehicles of your youth (or that you dream of in your youth) are reluctantly given up for more practical, dowdy, utilitarian vehicles, but we still hope for something more exciting. So trading in the minivan forsomething a little more adult, like a cross-over, appeals.

There are vehicles I see on the road and think they are impractical, at least for me. A Porsche SUV. Seems kinda silly. The Porsche of my dreams is a convertable or a race-car, not an SUV. I don’t want to put us into permanent debt to buy a car, that we will use and wear out like every other vehicle on the road we could buy. I don’t want to have to take out a home equity loan to get the thing repaired when things do go wrong. I am fundamentally a bit cheap at heart, mostly because I have kids I want to put through college.

All this said, for the money, cars that I never thought we would even consider are coming onto our list. The BMW. The Mercedes. When a decked out minivan and a Mercedes crossover are in the same general price range, it makes you stop and pause. I don’t know what we’ll end up with at this point- we have some time before we need to dump ‘ol reliable for something new. But I can tell you, the lack of any different choice, along with seeing that every manufacturer has something in the same price range, takes a decision that changes a decision that was based almost solely on economics and practicality into a debate about personality, brand, comfort, image.

The emotion based decisions are much trickier than the old decisions based on finances. When it’s only about money, decisions are easy. Can you afford it, or can’t you? Is this gonna kill you in maintenance, or is it worth it? Is it a car safe enough for you and your kids? If the money and practical facotrs are no longer at the top of the list, then the only way to make the decision is based on emotion. Are you an X brand person? You have to decide based on your sense of self, your “personal” brand- the emotions of how you see your family and how you want others to see you- this is much more difficult.

I kinda liked it when making decisions was easier and less involved. Less emotional. But as the world changes, and all these vehicles converge, it’s all becoming about emotion. And I’m afraid to say it, the same is becoming true across many other industries as well. We may have bred a generation of consumers, but since the choice is becoming infinite, the differentiation between options becomes harder and more time consuming, just at the point when I am already overwhelmed.

What do you think?

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