#growth

TTAC reader Brennan writes:

Hey Mark,

Long-time reader, first-time e-mailer. This might be a question for the TTAC’s Best & Brightest.

This all started when I was looking over the specs for the 2016 Honda Civic after reading your first drive review and really liking what I saw (both the car and your writing). I wanted to see how much of a size difference there was to my wife’s 2001 Honda Accord coupe, which is getting on in age and will need replacing soon. It turns out they’re almost identical in size.

That got me to thinking, how much bigger is the 2016 Accord than the 2016 Civic’s cabin and trunk?

This past Sunday night, I wandered over to my local movie theater to catch Black Mass. Although I’m suffering from a bit of Joel-Edgerton-related-ennui lately and I never really got over the idea of Hey, that’s Johnny Depp in makeup, I had to admit that overall, it was a tightly plotted and thoroughly entertaining film. More importantly, it had an absolutely killer lineup of Malaise-era automobiles, including an utterly stunning ’78 Oldsmobile Ninety-Eight with a white leather interior. In fact, until the moment that a 1980 Citation makes an unexpected and rather violent appearance on the scene, it’s nothing but wall-to-wall Seventies sedans. Just the way I like it.

I remember that as a child my grandparents complained about the squared-off, generic appearance of pretty much everything for sale in the post-Nixon era. I can sympathize a bit because although every car sold in the Fifties also looked just like every other car for sale, the general template of the Bel Air/Fairlane/et al was appealing and colorful and optimistic. But even if you don’t care for the ’74 Malibu Classic or the ’79 Granada, at least they had proportions that emphasized width over height. The worst of them had a certain dignity.

Not so with today’s rolling toaster ovens. We’re rapidly approaching the era where every single car for sale will be some variant on the almighty CR-V. The latest sales data from Porsche and MINI simply hammer that home, with a uniquely depressing twist.

I always get a little dismayed whenever I hear a car company talking about sales volume targets.

Yes, sure, reasonable sales targets are OK. Acceptable sales targets. If Toyota wants to say they’re going to sell one billion Camry units this year because they sold 997 million last year, that’s fine with me. If Honda wants to say they’re going to sell 950 million Accords this year because they’re contractually obligated by a higher power to slightly undersell the Camry, that’s fine too. And if Dodge wants to say they’ll sell 100,000 Grand Caravans this year, of which 99,000 are going to Enterprise, and the remaining 1,000 are going to people who don’t know any better, I guess I can accept that.

But I’ve never really understood why automakers set insane volume targets that keep them desperately reaching for sales for the next few decades.

Nissan-Renault CEO Carlos Ghosn said today that he does not expect any sales growth in Europe over the next three to four years. He is not giving up on growth, and said that most will come from higher demand in the United States and China, Reuters reports.

Low cost cars? Who needs them. BMW’s CFO Friedrich Eichiner thinks that the premium segment is where the growth is. Eichiner projects the global auto market to go basically sideways by growing 4 percent in 2012. He expects the premium segment to grow twice as fast at 8 percent. That according to an interview given to Munich’s Süddeutsche Zeitung today. Of course that growth is not spread evenly around the world. Eichiner predicts that the European car market will remain flat this year. Growth potential is seen in the U.S. and China.

“We can’t make cars as fast as they sell in China,” said an old friend of mine last night on the phone from Wolfsburg. He works at Volkswagen, the company that fights with GM for the title of King of the Middle Kingdom. I wanted his opinion on the sudden reduction in Chinese car sales. His answer? “What reduction? We are building three new factories in China, and we better get on with it.” He is right. If they don’t hustle, the competition will pour concrete faster than Volkswagen does.

GM China, our recently no longer so reliable oracle for the Chinese market, raised its November sales by 11 percent, compared to an absolutely batty November 2009. 11 percent are not the same growth as the 109.5 percent GM China had recorded in last year’s November, but how much battier do you expect them to get? The more meaningful number is that for the first 11 months of 2010: From January through November, GM’s China sales jumped 33 percent to a mind-blowing 2.17 million units. GM China will most likely close out the year in the 2.35 to 2.4m area – this is higher than the total sales of some of Europe’s larger countries, and definitely a whole lot more than GM sells back home. Better get used to it.

People have accused me of irrational exuberance (or worse) when I mentioned that the Chinese auto market could be 17 million or thereabouts this year. Impending bubbles were predicted. Popping bubbles were (erroneously) reported. Gordon Chang, guest of Glenn Beck whenever Beck needs an Asian that says something nasty about China, even offered the theory that the Chinese government secretly buys most of the cars and hides them somewhere. (For 17 million, the Gobi desert would come in handy, but then there’s Google maps.) I stuck by my prediction of 17m or thereabouts.

Well, it turns out I was wrong after all.