This cannot be good news for the American car industries as they offer so few fuel efficient cars.

You make great points. IIRC, Toyota did a major study on the Dodge Neon and made all sorts of decisions based on that to LOWER the quality of many of their parts. That is about the time you say they were decontenting. Apparently, they had been over building a lot of parts, like their gas tank coatings that were likely to fail twenty or thirty years after the car was crushed.

Unfortunately for them, and their buyers, this is almost the same road I think our Domestics went down decades ago. Eventually the mind set poisons the process and the pendulum swings too far towards “cheap crap”. If it is not fixed immediately, they will be right where our guys are in a decade or two.

Think about it: we have about 1 car in the US for every person. If China becomes as developed as the US is today (which they may well be in 20 years), that would mean a billion plus cars. There ain’t enough steel in all the junkyards in the world to supply just 10% of that number.

And there’s not enough oil in all of the world’s active fields to satisfy that same 10% of future demand.

One must wonder if we are headed for something more than just a “friendly competition” with China over the world’s resources. Can anybody else see the potential for physical confrontation and maybe even the use of military force (on either side…or both)?

Interesting times.

Indeed.

We are at an interesting period in economic history. Economists will tell you that the price of commodities — any commodity, even oil — may have peaks and valleys, but always declines over time.

The reason is that although the commodity may become scarce, human ingenuity to substitute or find other sources always overcame that scarcity. So when whale oil became expensive because we killed most of the whales, kerosene was substituted in lamps. Kerosene lamps were then replaced by electricity fired by coal.

But the last decade has been a real challenge to the theory, because the incredible economic development in China (as well as India, etc.) has created so much demand for raw materials.

Think about it: we have about 1 car in the US for every person. If China becomes as developed as the US is today (which they may well be in 20 years), that would mean a billion plus cars. There ain’t enough steel in all the junkyards in the world to supply just 10% of that number.

Interesting times.

Scrap is far from worthless. When I got out of school the first time and got a job as an auditor, I was assigned to an audit of a manufacturing firm. When the manager came up to review our workpapers, he gave us some grief because we hadn’t looked into controls over storage and disposition of scrap metal. He told us diversion of leftover aluminum, copper, etc. was a major opportunity for stealing from a factory.

Years later I saw in Japan people sifting through piles of junk, looking for salable materials. A friend who is currently living in a large city in China reports there’s no municipal trash collection; that’s done by people who go through neighborhoods and retrieve what’s discarded to get food for hogs, cans and bottles to recycle, etc. As has been said, one man’s trash in another man’s treasure.

You’re also comparing vehicles from 15 to 20 years ago to the ones sold today. Not much of a comparison. I’m looking at vehicles from 5 to 7 years and comparing them to today’s new releases. Other than the technologies mentioned the overall quality of the materials has indeed become cheaper and less durable.

If I were to sum up the automotive zeitgeist of our time it would be…

“Our goal is to make a cheaper product resemble a better one.”

We’re at a very strange point in the history of the automobile. The avalanche of innovation that had taken place during the last 20+ years seems to have slowed down considerably due to the ‘price’ factor’. I really see it in everything sent to the auctions these days but I’ll give you an example with Toyota that epitomizes the quote given above and the role commodities have within it.

Toyota’s ‘decontenting’ of their vehicles actually started out in the mid-1990’s due to their difficulties with the strong yen. When the 1992 – 1996 Camry came out this wasn’t as important of an issue. Toyota wanted to build a premium image and the Camry was heavily influenced by Toyota’s need to compete in the more upscale and luxury markets. During the early 1990’s Toyota was more concerned with offering world competitive products, and less concerned about containing cost. Ford shared the same attitude with the T-Bird and 96 Taurus, Honda refused to engage in incentive driven and fleet accounts to acquire the sales crown, and even Chrysler was benchmarking their vehicles with higher end models (the LH sedans and the 1996-2000 minivans were both very big leaps in terms of selling price and content).

But by the mid-1990’s Toyota wanted to get the sales crown real bad and they decided to ’simplify’ their product by eliminating many new car buyers wouldn’t initially see or value. Sometimes it was something small like the lack of ornamentation on their engines or less durable tires for the new vehicle. However sometimes it was more pronounced such as the use of fewer moldings to isloate road noise or the overall quality of their stereo systems. What really ended up happening is that the level of durability in Toyota’s products gradually eroded…. to the point where it’s really hard to make the case that the Camry really is the best buy in the field.

I remember Car & Driver remarking in 1992 about the new Camy, “With a car like this, who needs a Jaguar?” Toyota’s goal at that time had been to instill such a high level of quality and workmanship in their primary products, that they were often as good as competitors that cost thousands more. This is what lead to the establishment of Lexus as a top notch luxury brand and the Camry as Toyota’s ultimate triumph in North America.

Now though it’s a completely different story. Commodity prices have grown by double digits over the past five years, and this is what separates a nice thick piece of wood in a luxury car from one that is wafer thin. It’s what makes the difference between a classic Mercedes that can last through the decades, and a contemporary Mercedes that can’t last through the year without some annoying or potentially devastating electronic problem. In the case of Toyota it lead to a serious decline in quality but they are far from alone in this. Everybody is trying to make their products cheaper, and better in the short term , which is all well and good until you realize that we’re revisiting the world of planned obsolescence that was the guiding force of the auto industry in the 1970’s.

I don’t think quality wise we’ll ever meet that nadir of automotive bungling. But I do think that a modern Camry or Lexus may have less of a chance of hitting the 300,000 mile mark than the ones that were built 15 years ago.

Whenever I touch the upper part of a dashboard, a door panel, or even a trunk of a modern day car, I see and feel firsthand the long-term effects of an industry that is experiencing serious bouts with inflation. The products offered are simply becoming less durable because circumstances are requiring less material and limited quality.

Don’t remind me Menno. I have a huge collection of photographs taken at a place called Minakers near Toronto. It was AWESOME. Anyway, they had at least 1,000 cars from the 20s to the early 70s. GONE! All of them. Brought in a crusher and one by one in they went. Stupid thing was there was tons of scarce glass (ie., the rear window of a 6 Charger) that was left in the cars and got mashed along with the metal. If you own a classic and need parts? Act soon.

They’re actually double-Darwin Award candidates. First for the obvious disregard for the damage done to flesh by large numbers of high-energy electrons. Second because many powerlines are made from aluminum, not copper.

In Detroit, a number of would-be thieves have been electrocuted trying to steal copper wire from live power lines!

The Chinese love the scrap US cardboard because it is must higher quality (more fiber in it) than Asian paper. It can be remade into cardboard packaging 2 or 3 times for Chinese made products shipped back to the US.

Pretty clever.

Yes, William, I also noticed that all interiors are less “nice” than they used to be. Well, maybe the 2009 Hyundai Sonata is nicer than the 2007 my wife has – but the 2002 we had was nicer than the 2007. So Hyundai cut back, realized the error of their ways and improved their interior at least in their big selling car line.

Look what happened to the price of concrete starting a few years ago, when the Chinese started building the biggest dam ever seen.

Bought a 2002 Daewoo Nubira in 2003 (after GM was forced to sell parts to Daewoo USA) at a huge Ford dealer in northern Ohio, the car had 25 miles on it, and was $7800 (about 1/2 MSRP). We gave our other car to our college age son, and needed a cheap 2nd car for ourselves, did not want someone’s used junk.

Actually, it was a gamble but it has been one of the best cars we ever had. Of course, it has no value on the market. But after we replaced it, we passed it to my parents as a runabout, then they passed it to our other son. 50,000 miles, very few problems, economical, and parts can still be had.

Ironic that a Daewoo seems to be a better car than a GM, Ford or Chrysler, but there you go.

Also ironic that GM buying Daewoo was the only smart move they’ve made in several decades.

If GM does go bust, SAIC and Suzuki still own part of GMDaewoo, so parts would presumably be manufactured and available via common car parts stores. (The Chevrolet Aveo is the only US market vehicle which is built by GMDaewoo).

If/when the Detroit 2.8 go bust, and leave tons of people without warrantees and factory parts, there will be a huge aftermarket of car parts. Probably Chinese and Indian, because by then, not much may remain of US auto parts manufacturing.

The huge increases in commodities is already speeding up a trend – moving production to low wage nations such as India, China, Mexico, Vietnam, Romania, etc. etc.

A friend of mine was building a house in Phoenix, AZ and copper thieves got his copper pipes and cable from the construction site.

And a car parts theft ring was busted up not too long ago in Northern New Mexico. Imagine going into a restaurant and coming out only to find that your vehicle won’t start because someone stole the starter and/or alternator.

As the prices of commodities rises, so will the thefts.