It’s been a hard couple of months for everyone in the auto industry, no one is debating that. Some days it seems like no one is buying anything. Japan in particular has been rocked by a strong Yen and plummeting exports. This means that not only is the country sending less vehicles abroad, but that the money they receive on every sale is worth less in the Japanese domestic market.

However, there seem to be a few rays of light at the end of the tunnel. Many will (naturally) point to the Toyota Prius and Honda Insight as representatives of the new class of green car in North America, but I think last month’s sales figures from Honda paint a different picture. While hybrid sales are still doing comparably well in the grand scheme of things, small, cheap, and fuel-efficient cars like the Honda Fit are surging forward in the automaker’s lineup.

What does this mean? I think it represents a shift in the American car-buying mindset. Times are tough, and people are not only trying to save money on gas, but they’re cutting the fat. Do you really need to spend that extra ,000 on a Prius when you could get a small car that is still among the most efficient in its class?

What do you think? Am I premature in thinking that hybrids are falling by the wayside in the face of more conventional conservation or will Honda see a resurgence of hybrid sales with their more affordable Insight?

Related posts:

1. New Honda Insight Already Beating Expectations
2. Honda Insight Debuts at Detroit
3. New Honda Insight Debuts at Paris Auto Show

Chevrolet Volt

The Beans

General Motors has shelved work on the factory earmarked to build the engines for the Chevrolet Volt, but still claims that the plug-in hybrid will appear in showrooms by the end of 2010 as promised. I will believe it when I see it.  The decision comes as cash strapped GM struggles to shift the growing mountain of petrol guzzling suv’s and other V8 fuel guzzlers that North American buyers are now refusing to spend their hard earned money on.  Meanwhile, GM officials are hoping that Barrack Obama throws them a bone or two in the coming weeks, once he’s settled into his new comfy big house.  Mr Obama had hoped to move in quickly but there are rumours of delays as whitehouse staff struggle to remove 8 years worth of Bush family pebbledashing from 35 bathrooms in the big white house.   GM and Chrysler have also stated ‘if the current economic downturn continues, they would be flat broke and doing ‘elephant impressions’ on the whitehouse lawn in the not too distant future’.  Their cries fell on deaf ears, as the US administration appears to be in no rush to pull them out of the hole they’ve dug for themselves. GM says it had no choice but to shelve work on the the factory in Flint, Michigan, where GM were planning to build the 1400cc turbocharged engine designed for the Chevrolet Volt hybrid. The Chevrolet Volt was intended to be the catalyst in GM’s efforts to reinvent itself as a modern company that builds fuel efficient cars. But with the economic crisis or credit crunch as some have labeled it (a recession to the rest of us), there is no money available for that project right now.

A Turbocharged Battery Charger?

The Volt is by far GM’s most important project and a huge leap foward over conventional hybrid technology as it relies entirely on electric propulsion. The petrol engine exists only as a charger the lithium ion battery pack as it approaches depletion. The car is capable of a 40 mile range in pure electric mode and deliver 3 digit fuel economy figures. I can’t help but wonder why they would need a 1.4 litre turbocharged petrol engine to charge a few batteries? There are similar engines already fitted to several conventional small cars here in the UK car market, namely the VW polo 1.4TSI, and VW extract 140 bhp from that 1.4 litre turbocharged petrol engine and it hits close to 130 mph? and while its reputedly fuel efficient, its hardly the model of high fuel economy, and certainly not what you would expect to see being utilised as a battery charger? But I suppose that with the vast majority of americans driving 5 litre V8′s for the last 60 years, it probably seems like a small engine to them? I’m going to stick my neck out here and throw out a guess that the 10 Horsepower diesel engine in my lawnmower would be perfectly capable of charging a large battery bank in a relatively short period of time. It seems to me that the high powered petrol engine has more to do with pleasing Texan Oil Barons than producing fuel efficient motor cars, but then i’m a naturally suspicious person with an unhealthy dislike of oil companies. GM insiders say that development of the Chevrolet Volt will continue and they hope to see them rolling off the production line before the start of 2011 as previously announced. Now I know what you’re thinking already, “That might prove a little difficult without a factory to build your engines in?” or “I think it goes without saying that if you’re serious about making engines, you need an engine factory?” Well it turns out that General Motors already builds that particular 1.4 litre turbocharged engine in their Austrian engine plant, so they could just send a few over if its really neccesary. That bombshell makes this article rather pointless really, and now i’m wondering why I’ve even bothered to write it.

Conclusion

Bring on the electric cars GM, we were ready for them 80 years ago, that’s how long it’s taken you to catch up! For those of you waiting to buy a chevrolet volt in 2010, 2011 or maybe 2012?, let’s hope that whitehouse staff get to the bottom of the George W Bush pebbledashing problem soon, and Barack Obama gets to move in before Dub’ya makes off with what’s left of America’s valuables. In the meantime, i’m off to build myself a new generation diesel hybrid, now that GM’s told me how to do it.

<- This Car is currently under development in France and is Fuelled by Compressed Air!

I would like to offer a few tips on used fuel efficient cars, and offer a little advice to those who may be considering a change of car. If you are about to purchase a new car which you plan to keep for 3 years, and you think that diesel is the way to go, THINK AGAIN! As much as I love diesels, when you compare the cost of ownership of a new diesel car, over the petrol equivalent for a 3 year ownership, in most cases it just does not work in your favour. With a higher purchase price, higher servicing costs, quite often the diesel car is in a higher insurance group, then when you factor in that diesel is currently 12 pence a litre MORE expensive than petrol, the potential savings look bleak. The gap between both fuels currently appears to be widening on a monthly basis. A diesel car will retain a little more of its value after 3 years of ownership, but running costs will make it the more expensive option, overall. It really does not make great financial sense, UNLESS you plan to keep the car for more than 3 years. There will always be people out there who have a hard time accepting reality, the facts being, that sometimes car manufacturer’s, use the ‘PERCEPTION’ of economy, to nail you in the long run. It’s not all bad news, there are many great bargains to be found on the used car market. Below is a list of 50+ super frugal cars to look out for at used car dealers in the UK.

Alfa Romeo 147/156 1.9L JTD Diesel – 50+ MPG

Audi A2 1.4L TDI Diesel – 65+ MPG

Audi A3/A4/A6 1.9/2.0L TDI Diesel – 55+ MPG

BMW 118d/120d/318d/320d Diesel – 50+ MPG

Citroen C1/C2/C3 1.4L HDI Diesel – 65+ MPG

Citroen Saxo 1.5L Diesel – 55+ MPG

Citroen Xsara 1.4L HDI – 60+ MPG

Fiat Punto 1.3L Multijet Diesel – 60+ MPG

Ford Fiesta 1.4L TDCI Diesel – 60+ MPG

Ford Focus 1.8 TDdi Diesel 60+ MPG

Honda Civic 1.7 CDTI Diesel – 55+ MPG

Mazda 323 2.0L TD Disel – 55+ MPG

Mazda 626 2.0L TD Diesel – 55+ MPG

MG ZR 2.0L TD Diesel – 55+ MPG

Mitsubishi Charisma 1.9L DID Diesel – 50+ MPG

Peugeot 106 1.4/1.5L Diesel – 60+ MPG

Peugeot 206 1.4L HDI Diesel – 65+ MPG

Peugeot 307 1.4L HDI Disel – 60+ MPG

Renault Clio 1.5L DCI Diesel – 65+ MPG

Renault Megane 1.5L DCI Diesel – 60+ MPG

Seat Ibiza/Cordoba 1.9L SDI/TDI Diesel – 60+ MPG

Skoda Fabia 1.4L TDI Diesel – 60+ MPG

Toyota Yaris 1.4L D4D Diesel 70+ MPG

Toyota Corolla 1.4L D4D Diesel 60+ MPG

Vauxhall Corsa 1.7L DI/DTI Diesel – 60+ MPG

Vauxhall Astra 1.7L DTI ECO4 Diesel – 65+ MPG

Volkswagen Polo 1.4L TDI – Diesel – 60+ MPG

VW Golf/Bora 1.9L TDI – Diesel – 55+ MPG

This car that you believe is more fuel-efficient than a hybrid car, must be hidden in the back of a dealership behind the red, green, and yellow cars. It must be stuck between a big SUV and a van somewhere.

And what does it take to fuel this car? You don’t know the answer to that question. You barely know if this type of car exists. But there just has to be something out there better than a hybrid car. You insist that it’s true.

Well, there are a few choices for you. You could be thinking that a very small conventional car is more fuel-efficient than a hybrid car. You could be thinking that an electric car is better than a hybrid car. You could also be thinking that the dealership employees must have some cars in the back that they are creating on the spot that run on anything but gasoline and batteries. These cars, you think to yourself, would be better buys than hybrid cars.

Well, electric cars don’t get better fuel-efficiency than hybrid cars mainly because a lot of times electric cars don’t even need gas to power them, so you can’t even compare electric cars to hybrid cars.

A small conventional is definitely not more fuel-efficient than a hybrid car because no conventional car is.

And there are not any just-made cars sitting in the back somewhere. Car dealerships don’t make cars. They sell them.

But the final answer to the question is the new fuel-economy numbers that have been issued by the EPA. Those numbers conclude that the most fuel-efficient cars available to the public when looking at 2008 models are hybrid cars. Just the Toyota Prius as an example has a combined highway or city mileage of 46. This and other hybrid cars have overcome the 40 miles per gallon mark.

So, it looks like there are no new discoveries to be made at the auto dealer. And that’s a good thing. You wouldn’t want to be outdone by the Joneses because you thought you bought a great car, but you saw that they had a better, more fuel-efficient one. Nope, that’s not going to be you. Now you are armed with the knowledge that hybrid cars are the most fuel-efficient cars around and until automakers start to come up with more ideas, a hybrid car is what you have to work with.

However, advancements in fuel-efficient cars are on the horizon. Auto manufacturers are working on plug-in hybrids, battery-electric cars, and gas-engine systems that are more efficient. So look out, your dream car is coming soon. But if for now, you just buy a hybrid, you won’t regret it.

Currently in the US market there are a few types of people looking for small, fuel efficient cars. Traditionally, those people have been the types to wait in long lines for Smart ForTwo tests drives and Prius ownership: the treehuggers (of which I am a part, so I say it with love). With gas prices skyrocketing and the threat of global recession looming on everyone’s mind a new buyer has sprung up: the frugal new car buyer.

As gas gets more and more expensive, fuel economy will become more important to the cost of total ownership. These days, it’s not hard to make the case for buying a Civic Hybrid in terms of payback and fuel costs, especially with gas prices expected to rise in the next few years. However, not everyone wants a Prius, needs a Prius, or can afford the upfront cost expecting to be paid back in several years.

This leaves a large segment of people who wish to save money on both gas and the initial cost of the vehicle. Traditionally, these people have bought things like the Civic and Corolla, but with those cars getting bigger and more expensive over the years, people have been looking for other options. Currently, there aren’t many besides the Honda Fit and Toyota Yaris. They’re definitely both good cars, but consumers are still want for more variety and selection.

That’s why I was so surprised when I read this today:

“The Mazda2 is a very good product, and we’ve received very strong requests from dealers. But it is still under study,” said Mazda president Hisakazu Imaki in a report about the possibility of the small car’s North American debut.

“One of the biggest factors (for why) the decision hasn’t been made is that the Mazda3 is still enjoying strong sales,” Imaki said.

This is the story we hear from automakers time and time again. They’re selling cheaper, more fuel efficient cars in other markets, but because of the lower profit margins aren’t selling them in the US. Especially since that would take some of that frugal, efficiency-minded market away from the small cars currently for sale.

But what’s the solution? Well, like other countries have done, we could institute tougher fuel economy regulations. The automakers sure whined about the new CAFE regulations the last time around, but if they’re not in a rush to bring more fuel efficient cars to market in the US, the regulations obviously aren’t that strict. While more regulation might seem onerous, I posit that the burden will be primarily in marketing existing vehicles in North America, and not in a complete technical revolution of any sort.

The auto industry is beginning to look more and more like a crooked politician with lies and deceptive statistics. Everyone knows the industry is hurting recently: gas prices are up, vehicle miles are down, people are buying less, and people are buying smaller. All of this means that car companies are making a lot less money than they used to. Environmental concern is definitely a big player here, but when you consider that hybrid sales are also down a considerable amount this year, it’s obvious that the current ill state of the auto market is a result of a global economic downturn.

The industry is getting desperate

Why do I say this? My partner on the EcoModder forums sent me this link, telling me it would be worth writing about it. To be honest, I didn’t even read it for a few days, but now I’m glad that I did.

There’s no denying that people are becoming more and more concerned with the environment, but instead of selling hybrids, the industry is trying to twist that environmental concern into sales of big cars and trucks:

“Small cars don’t last,” DesRosiers says. “They fail to retain value, utility or desirability.” And while longevity may not be a sexy subject, it stands to reason that if some vehicles are useful longer than others, what consumers save in fuel economy will be lost in higher capital costs. In other words, small car buyers may be robbing Peter to pay Paul and manufacturers are just following suit.

Before the phrase “completely idiotic” starts to get thrown around, please keep in mind the Dennis DesRosiers is a professional industry consultant / smut peddler. It would be a stretch to call him stupid, but the things the he tries to have us believe, at best, push to limits of truth.

Firstly, take a look at my article on how fuel efficient cars are holding value better than less fuel efficient vehicles. If you don’t believe me, go to kbb.com and check anything out for yourself. Some of the larger cars may be worth more after a few years, but only after losing more value, on average, than smaller, more fuel efficient cars.

DesRosiers goes on to assert that small cars are less durable:

But according to DesRosiers and other analysts, small cars are less durable. First off, they are built lighter. Secondly, they are cheaper, so they attract younger drivers who tend to maintain them poorly. They have a lower resale value, which guarantees they won’t trade hands many times before they are scrapped, and they’re more likely to be written off by insurance companies if they are involved in serious collisions. In other words, “the useful life of the vehicle” is as short as their wheel base, according to Erich Merkle, an automotive consultant with Crowe Chizek in Grand Rapids, Mich.

To me, it makes sense that small cars are lighter. They’re smaller, therefore they consume less materials, and weigh less. And get this, they’re smaller, therefore they consume less materials, therefore they are more environmentally friendly! DesRosiers expects to argue that big cars go to the junkyards less frequently, but he “conveniently forgets” that when they do, they also send more materials to the junkyards with them. This article also seems to imply that cars end up in some sort of landfill, rather than stripped and melted down for scrap and reused in new vehicles.

If you look at this reliability index, you will see that contrary to the assertions of this article, cars like the Honda Civic and Toyota Yaris are both in the top 6 of all cars in terms of reliability. The article in question specifically attacks these two small cars for being the type that would end up in junkyards due to their “lack of durability,” but that doesn’t seem to mesh with what most consumers and analysts are saying about the same cars.

Secondly, DesRosiers seems to conflate young drivers destroying their cars with the cars not being durable. Does he seem to think that young drivers who don’t maintain their cars wouldn’t be sending SUVs to the junkyard in just the same way they do small cars? He expects us to be too stupid or uncritical to think about these deceptions, but I hope that most of us here on EcoModder can see through it.

Now, onto his assertion that small cars just aren’t worth as much:

Comparing the entry-level Chevrolet Aveo (1,148 kg), for example, to the mid-size Chevrolet Malibu (1,642 kg), Merkle adds, “You will get rid of the Aveo faster. It’s much lighter, it doesn’t have the strength. After about three years, the Malibu will be worth something; the Aveo, no.”

I did a little research on KBB, and comparing 2008 models with 2005 models with 45,000 models, yes, the Malibu will be “worth something.” He’s telling the truth! The 2005 Malibu LS 4D is still worth a whopping ,815, whereas the same model of Aveo is only worth ,115.

But wait, there’s more. The 2008 only costs consumers ,188 for that model while Malibu owners are paying ,522. That means the Malibu has lost 40% of its value in just three years, but the Aveo has only lost 25% of its value. I guess the Malibu wins the race to the bottom, not the Aveo, contrary to DesRosiers’ suggestion about their comparative values.

So, in conclusion. When someone who’s paid to tell you what kind of car to buy is doing just that, use a critical eye to look for deception, because you may just find some. I hope you all take the same approach to what I write as well. I may not be right, but I’m also not in the market to sell my Civic, either!

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© 2008 EcoModder.com Taken from Auto Industry Desperation: “Small Cars Are Disposable and Bad for the Environment”.