Friday, November 10, 2017

Wither The Luxury Car, Part II

 When I bought this pickup in 1995, it was "fully loaded" with power locks, windows, and cruise control, as well as the optional air conditioning!  Today, this level of "luxury" in a pickup truck would be deemed laughable.   Even a stripped pickup truck has more options today!

Several years ago I wrote a blog entry about luxury cars.  Since then, it is getting harder and harder these days to distinguish what is a luxury car from an ordinary car, compared to how things were in the past.

When I grew up in the 1960s, a car with power windows or power door locks was a very rare and unusual thing.  It was something that only rich people had.  Air conditioning was not a common option, even in the South.  Most of the cars that my parents and my parents' friends owned, had basic AM radios, drum brakes, cloth or vinyl interiors, and manual crank windows.  Actually, cloth interiors were a fancy upscale option from vinyl!

My parents' first car with air conditioning, a 1965 Dodge 880 wagon.  They would not buy another car with A/C until 1980.  Today, A/C is standard on nearly every car sold in the US.

It was a big deal in 1965 when my parents bought a Dodge 880 wagon with fake wood on the side and air conditioning, an unheard-of option in chilly Chicago at the time.  They wanted to take the family on a trip to the Southwest and felt that air conditioning was necessary.  Unfortunately air conditioning back then only cooled the front of the car and we kids baked in the back seat particularly in the way-back seat.

It was no doubt the most expensive car my father had bought up until that time, and indeed probably the most expensive car he bought for more than a decade after.  But even with highfalutin' air conditioning, it still had manual crank windows, manual locks, and vinyl seats.  It was a pretty basic car by today's standards - actually what today would be considered "entry-level."

Back then the big package of power options was power steering and power brakes and an automatic transmission.   If you had a car with these three features it was considered pretty slick.

Some of the first cars I owned didn't even have those options. I had a 1973 Pontiac Ventura which had manual brakes, manual steering, and a 3-speed on the column manual transmission.  Parallel parking that car was quite a workout!   When you stepped on the brakes nothing happened until you stepped on them very hard.  Your physical force was needed in order to stop the car.  It was a very visceral thing.

Today, people freak out when their car stalls and the power steering and brakes peter out.  The car will still steer and brake, of course, but you have to really use some effort - the effort we used to use "back in the day" to steer and brake our cars.   Many people simply "give up" and crash their cars when the engine stalls, convinced the steering and brakes have "gone out" entirely!

So-called luxury cars like Cadillacs, Lincolns, or maybe an Imperial had things like power windows and locks, cruise control, and air conditioning.  They also had a lot of gim-cracks and doo-dads to try to make them appear fancier than they were.  Cadillac had a little round thermometer mounted on the outside rearview mirror so you could tell what the outside temperature was. Of course it was such a small thermometer that it was marked off in increments of 5 degrees - which really didn't tell you too much.

They had other doo-dads like "Twilight Sentinel" which in early cars in the 50's was his giant pod on the dashboard - it was a huge and expensive option and all did was dim your headlights when somebody was coming in the opposite direction or turn your headlights on at dusk.

Of course today, even cheap economy cars have automatic headlights.

Even foreign cars back then were pretty basic.  Of course things like Volkswagens and Toyotas came with manual transmissions and manual windows.  Automatic transmissions were usually considered unreliable in those cars - and were usually foreign versions of GM or Borg-Warner slushboxes.  While some Mercedes back then came to this country with power windows and locks and cruise control, even BMWs were offered with paltry 4-speed manual transmissions, manual windows, no power locks, and not even available air conditioning. For many foreign cars of the time, air conditioning - if it was available at all - was a dealer installed option and often didn't work very well.

I noted another posting from years ago that the foreign carmakers either had to move up or move out. And that's why Mercedes, BMW,  and Jaguar started pushing luxury instead of their price point. Suddenly the only European cars you could get in America were fully loaded ones, compared to the stripped-down options offered in their home countries.  Volvo at that time went from offering basic four cylinder, four door, tank-like cars to leather trimmed luxury vehicles with many power options.

Of course part of this is an overall trend. We've become accustomed to having more features and options and toys in our cars and that's exactly the point of this posting.  Today there are only two cars you can even buy that don't come standard with air conditioning - one is the Jeep Wrangler and the other was the Chevrolet Sonic.  However probably 90% of both of these vehicles built are shipped with air conditioning from the factory, so it's really a moot point.

Power windows and power locks, are also pretty standard, as is remote keyless entry a magical like device that would have baffled people back in the 1960s.  Cruise control is also pretty standard on a lot of cars and usually automatic transmissions are offered at little or no extra cost.   In fact, manual transmissions are today, nearly extinct.  Folks today wouldn't even understand what a car without power steering and power brakes is all about.   As I noted, today, if somebody's power steering goes out, they crashed the car into a tree, not realizing that they can still steer the car - it just requires a exponential level of effort.

A friend of mine still likes to buy Mercedes, and he just recently bought a very lovely E-class Coupe. He was quite frustrated as he was regaling me with all the fancy features on his new E-class Coupe - while at the same time running down our little hamster.  He told me that the E-class had a glass sunroof that ran from rail to rail and from front to back, "The car has its entire roof made of glass!" he said.   "So does the hamster," I replied.

"Well," he said. "I have electric push-button start in my car.  I don't have to put the key in, I just push a button in the car starts!"

"So does our hamster," I replied.  Although I'm not sure exactly what the point of that feature is.

"Well," he said, "My Mercedes has heated leather seats and a heated steering wheel and not only that, the seats are air-conditioned as well!"

"We have that in the hamster, too," I replied, "And the rear seats are heated as well."

He was starting to get frustrated.  Almost every feature on his Mercedes was replicated on our hamster.  The only thing we didn't have was a power passenger seat, and of course the engine in our car is much smaller.  But all the features we used to consider the realm of "luxury" are pretty much available in even the most plebeian of cars.  And oftentimes, these are the exact same components made by the exact same companies.  You look at the controls in a luxury car, and there are nearly identical to those in a much cheaper car.  And this is because these parts are all made by the same company.  Usually in China.

And I think people are starting to figure this out.  Why pay more for a BMW or Mercedes when all you get are the bragging rights for the status of the emblem on the front grill?  Not only that, if you've looked at the BMW and Mercedes cars lately, they are rather boring vehicles.  Yes, Americans are infatuated with their SUVs and pickup trucks, and both BMW and Mercedes offer SUVs as well.  But there is no real compelling reason to spend two to three times as much money to own one.

When we bought our BMW X5 (used), it was a 2002 model, one of the earliest ones off the assembly line.  Back then, very few people made SUVs like the X5.   Ford was offering the Explorer, which was based on the Ranger pickup truck, and Toyota was offering its 4Runner which was based on Tacoma pickup truck.  Most car companies were offering truck-like SUVs with fairly spartan Interiors.

The X5 was something different. It was shaped differently and was a unibody construction with front and rear subframes - and a fully independent suspension as well.  It handled like a car.  And the interior was lined with wood and leather and it had all the toys in bells and whistles - for the time.

Fast forward a decade and a half, and almost every car maker today offers a midsize SUV that looks like a clone of a 2002 BMW X5.  Hyundai has one, Kia has one, Chevrolet has one, Ford has one dash - everybody has one.  And they all follow the same format - with a unibody construction, independent suspension front and rear, and loaded with all sorts of luxury goodies. The only difference is the SUVs from these more plebeian makes are far cheaper than the ones being sold by BMW and Mercedes.

Again, I think people are starting to figure this out.  When your Chevrolet Traverse breaks down, you can take it to a Chevrolet dealer in almost any town have it fixed fairly cheaply.  And when it finally blows a head gasket at hundred fifty thousand miles you can just afford to junk it and buy another one.

A BMW or Mercedes SUV, on the other hand with a six-figure price tag, is a whole 'nother proposition.  Even if you can "afford" to buy or lease one, you'll end up paying a lot of money for not very much transportation.  And you may find it sitting in the shop a lot more than more plebian brands.  Cars that are made in limited numbers tend to be less reliable than mass-produced vehicles.

A recent article a rider in Reuters suggest that BMW and Mercedes are headed for a blue Christmas. sales of automobiles in general are down, while sales of SUV's and pickup trucks are up.  But sales of luxury cars are really in the toilet and luxury SUV's aren't doing so well either.

I think Reuters gets it partially right, that the transition to trucks and SUVs in the US market is a big factor. But it's like these stories that claim that such-and-such a brick-and-mortar company went out of business "because of Amazon" when the real problem was staggering debt.

Similarly, I think we're seeing other factors that work with the decline in sales of luxury vehicles. People can find the same features of a luxury car in a much less expensive vehicle today.  Vehicles are becoming interchangeable, with no one brand or type or class having an advantage over another, other than for status purposes.  Why spend money on a BMW or Mercedes when you'll actually get just as good a driving experience in a lesser car, and perhaps in terms of overall value and reliability a much better experience?

But that's not the only thing that work here. I think we also have an issue of consumer confidence which I alluded to earlier.  This is not a good time to be buying expensive vehicles, at least for most people.  We are hearing over and over again about how manufacturing is up and the stock market is up and everything is going hunky-dory.  But a lot of people are struggling right now and a lot of them are struggling with a lot of debt.  Maybe the very rich can afford to buy expensive vehicles but Mr and Mrs Middle-Class - the Strivers - can't afford to buy that hundred-thousand-dollar Mercedes at this point.

Now, of course, many of the same people are buying $50,000 pickup trucks  (or were, anyway) and not batting an eye.  However I think the sales of those monsters will start to taper off, even though the manufacturers are all offering enormous incentives to move iron off the showroom floor.

In other words this might be another point on a graph that indicates a trend.  We may be headed for a recession and perhaps as early as next year.  It may not be just the luxury car makers that are facing a Blue Christmas.