Posted by: David Kiley on October 2, 2007
Will European style cars ever fly in Detroit?
I have been pondering this question in the last two weeks as GM seems intent on making a mid-sized notchback car at its Fairfax Kansas plant starting in 2010, as well as a new family of small rear-drive cars. I also recently heard Chrysler CEO Bob Nardelli list the Dodge Magnum as one of Chrysler’s product successes. And then there is Ford, which is going to mesh the styling of the next generation Fusion and Mondeo with a European flair—more Mondeo than Fusion.
A mid or full-size notchback? We saw this movie with the Chevy Malibu Maxx. I know the guy who bought the one Maxx GM sold at retail that wasn’t to an employee or a rental car fleet. Notchbacks do well in Europe, but it’s an answer to a question no one has been asking in the U.S. The Magnum, a Euro sport-wagon, is a bust. Make no mistake. I like the car, but from a non-fleet sales standpoint, it’s been nowhere. DaimlerChrysler CEO Dieter Zetsche thought the U.S. was ripe for a touring wagon.
GM too is planning a derivative of the Opel Zafira for the U.S. GM couldn’t sell its full-size minivans. But it thinks it will be able to sell a smaller Euro-sized minivan in the U.S.? That’s a gamble.
Now, the Ford Mondeo as the next Fusion? That seems like a good idea. The new Mondeo in Europe, I think, would be selling nearly without incentives in the U.S. if it was the Fusion. And by the way, let’s call it the Mondeo on both continents when these new cars debut in a few years.
GM’s small rear-drive cars? I dunno. I did like the Chevy concept of a few years ago that was based on the Pontiac Solstice/Saturn Sky rear drive platform. Are there enough rear-drive enthusiasts to make that niche work?
The key to some of these products will be price. Audi, for example, is choking to death on inventory of the A3, a decidedly European car. But that’s because exchange rates have pushed a loaded version of the car close to $40K. But don’t under-estimate the possibility that U.S. customers may balk at Euro car fashion.
Perhaps the gas crunch in the U.S. will push us closer to looking like the European car fleet. I heard an analyst this morning say we will see $100 per barrel oil in the next 24 months—bank on it—because some of the developing nations that now export oil will be using more and more oil domestically, thereby reducing the supply…while demand goes up. Higher European-style gas prices, could, indeed, mean a more European looking car fleet. But I’ll believe it when it happens.
I also saw Volkswagen’s new clean diesel Jetta, which will go on sale this May. Well over 40 miles per gallon, and a 40% smaller carbon footprint than gasoline. How many more reasons do we need to have more clean diesels in the U.S.? It’s brilliant technology.
Ah, but an awful lot of U.S. consumers simply won’t accept a diesel of any kind. Nor are they likely to be interested in notchbacks and touring wagons. The jury will stay out on small rear drive sedans and coupes until GM proves it’s what the market wants, and not just what its executives think will be cool.