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RE: [comment] VWoA...WTF?



Agreed with one correction:

The reason that the Big Three make small cars isn't actually for brand 
loyalty (although it's a nice side-benefit).  It's because of the CAFE 
Standards.

Those of you who aren't familiar with CAFE, it stands for Corporate Average 
Fuel Economy.  It's currently at (I think) 24mpg.  This means that the 
average fuel economy of all cars that any manufacturer sells in the USA 
must lie under the 24mpg mark or the company will be fined heavily by the 
EPA.

For every 42mpg Neon that Chrysler sells, it can sell *two* 18mpg 
Dakotas.  Chrysler doesn't care that it loses a few hundred bucks on the 
Neon, cause it more than makes up for it with the thousands that it earns 
on every Dakota.

All of the big 3 have stated publicly that if it weren't for the CAFE 
standards, they would all abandon the small car market.  What does that 
tell you about the small car market in the States?  It's just not there.

Jason



At 08:46 AM 12/15/00 , Aaron Ness wrote:
>One thing to consider is that small cars don't have profit margins.  Did you
>know that GM takes a loss on nearly every Cavalier it sells?  Carmakers sell
>small cars to establish brand loyalty, assuming you will think your POS
>Cavalier was so friggin' awesome that you will run out and buy a Monte in
>two years, and a Tahoe after that, and then an Escalade.  This is just an
>example, but note the logic - each successive car I mentioned has a higher
>profit margin for GM.  The luxury models have the profit margin that allows
>the carmaker to be profitable - and still sell entry-level cars at a loss in
>order to bring people into the brand.
>
>Others have mentioned crash safety standards.  This is another factor, as
>well as emissions and little things like lighting requirements.  If VW is
>satisfied that they are growing as fast as they need to grow in the US
>market without drawing people in via "entry level" cars below the Jetta in
>their lineup, it would be stupid for them, from the business side, to even
>consider the additional development on the smaller platform that would be
>required to make the cars legal to sell and drive in this country.
>
>Another way to look at it is that VW is meeting its goals with the current
>lineup, so if they were to bring in an "entry-level" such as the polo for
>the enthusiasts, they would either have to be less profitable, or they would
>have to pass their costs along to the consumer (a.k.a. you), and the car
>would be so expensive (relative to "comparable" cars) only the most die-hard
>VW nuts would even consider it.  That's not a big enough market share to
>make it feasible, and the fewer interested people they can find, the more
>each person will have to pay.  In general, people just won't pay a premium
>for the privilege of driving a small car.
>
>I think the root of the problem is that Americans are spoiled by excess, so
>they would prefer to drive a big car.  That's why models continue to get
>heavier/larger over their life.  I, like a lot of you, prefer my small cars,
>but my wife doesn't understand my obsession.  I'm about 6'3", incidentally,
>so I can understand her confusion.
>
>Aaron
>'82 Scirocco
>'70 Beetle
>'87 Jeep Cherokee 4.0
>'81 Honda CX500
>
>
> > -----Original Message-----
> > From: owner-scirocco-l@scirocco.org
> > [mailto:owner-scirocco-l@scirocco.org]On Behalf Of Night Shadow
> > Sent: Friday, December 15, 2000 7:50 AM
> > To: Christian Els
> > Cc: VWMikeLVW@aol.com; scirocco-l@scirocco.org
> > Subject: Re: [comment] VWoA...WTF?
> >
> >
> > On Thu, 14 Dec 2000, Christian Els wrote:
> >
> > > BMW is not the only maker to suffer this -- look no further than the
> > > Porsche SUV...
> >
> > Good true stuff snipped from Christian's email above, car
> > makers tend to
> > try and make what they think people will buy.
> >
> > Funny thing is, I want a Lupo too.  You guys remember when
> > EuroSport took
> > all those signatures to petition VWOA to bring the Lupo here?
> >  Well, they
> > chose to ignore it.  VWOA is being stupid here, they could sell those
> > Lupos by the truck load as an entry, enthusiast oriented VW.
> >
> > Another funny fact, the Porsche SUV?  A joint project with
> > VAG.  Yes, VW
> > and Audi will have SUVs soon, with the same chassis as the Porche
> > unit...just different engines...and interiors...etc.
> >
> > Eric
> >
> >
> >
> > --
> > Email LIST problems to: scirocco-l-probs@scirocco.org. To
> > unsubscibe send
> > "unsubscribe scirocco-l" in the message to majordomo@scirocco.org
> >
>
>
>--
>Email LIST problems to: scirocco-l-probs@scirocco.org. To unsubscibe send
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----------
1987 Scirocco 16v
1988 Mercedes 190E Sport Euro


http://www.scirocco16v.org


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