Bark's Bites: 2018 Changed the Way We'll Drive Forever

Mark "Bark M." Baruth
by Mark "Bark M." Baruth

2018 was pretty lit, am I right? Let’s recap some highlights:

In fact, this has probably been the craziest post-bailout year yet. Since TTAC was one of the first blogs to predict the General Motors bankruptcy, I thought I might honor that tradition by taking this New Year’s Eve opportunity to predict how events that unfolded over the past 12 months will affect the way we buy and drive cars for the foreseeable future. Click the jump and see if you think I’m right.

  • New vehicle sales are going to continue to trend downward. Why, you may ask, especially with the economy trending up and unemployment virtually nonexistent? There are several factors at play, including raising loan interest rates and increased life for pre-owned cars. But equally important is the raising transaction price of new auto sales. Cars are now accounting for the lowest percentage of new autos sold in the history of the industry — under 29 percent in November 2018. Compact crossovers transaction prices average a little bit over $28,000, which not only exceeds the average compact car sale by almost $8,000, it also exceeds the average midsized car transaction price by almost $3,000. It’s going to be harder and harder for lower-income individuals and families to buy new.
  • Another manufacturer will make the call to slash passenger cars in 2019 … and it will shock most of us. With margins shrinking to previously unseen levels, some new car manufacturers are going to have to make a tough call in 2019 — will they trade volume for profitability? Toyota still sells hundreds of thousands of Corollas and Camrys. Same with Honda and its Civic and Accord models. But what about Nissan? Altima sales numbers have both fallen off a steep, double-digit YOY cliff in 2018, and Sentra is down a bit, as well. Maxima is a non-factor. Meanwhile, Rogue sales are higher than ever, trailing only the RAV4 and the full-size trucks in sales volume, and the Murano is climbing by double-digits, as well. Would it be so crazy for Nissan to take the plunge and cut passenger cars for the US? I don’t think so. (PS — I think Acura might next.)
  • Genesis might be DOA. Yes, I know that everybody loves the G70 (including me). Yes, I know the crossovers are coming. But all reports indicate that they are at least another year out. How long will dealers, who haven’t had any inventory for most 0f 2018, be satisfied for the low-volume G70, G80, and G90 models? Currently, about 400 Hyundai dealers have the right to sell Genesis, and even the Genesis brand brass think that’s too many. They’re also asking dealers who want to re-up their commitment to build standalone stores, and while Genesis isn’t mandating a minimum showroom investment at this time, I don’t see how it could be done for less than $1.5-2M each — or the average cost of a Ford/GM showroom remodel. In case you’re not aware, that’s more money than most franchise dealers clear in annual profit, all for the right to sell a brand that most Americans don’t even know/care about. Those crossovers better be fire when they finally arrive, because Americans keep demonstrating that they don’t care about passenger cars. Genesis is starting to feel like a vanity project gone bad.
  • Subscription models aren’t ready for primetime, and they won’t be anytime soon. I have several former coworkers who moved over from Autotrader to Clutch Technologies, and they privately tell me they’re looking for work. The financials of it simply don’t work, at least not yet. Margins are too razor-thin for automakers to lose money operating a subscription service (I hear Melody Lee is looking for some work opportunities) and dealers don’t believe in the business model enough to invest in it — after all, car dealers are often among the last to change or adopt new ways of doing business, so why would anybody think that they’d want to invest significant money in something that even the OEMs have yet to get right?
  • Tesla is gonna Tesla. I have no idea why every autowriter in America appears to either be Team Tesla or Team Haterade, but I find myself squarely in the “meh” camp. Musk and crew have proven to be brilliant, and I do mean brilliant marketers. They don’t spend a dime on advertising and yet they dominate the news pages. They have managed to create more raving fans in just a few years than their competitors have with several decades of a head start. Mercedes buyers will consider BMW. Audi buyers will consider Lexus. Tesla buyers only consider Tesla. That, in and of itself, is a fantastic accomplishment. Yes, the cars appear to have some quality and consistency issues on delivery, and I still think that Tesla will fight an uphill battle against dealers and unions. But they are making and selling a genuinely significant number of cars right here in the United States at a time when Ford and GM are fleeing for China. That alone is worthy of applause. I don’t think they’ll go out of business, and I don’t think they’ll dominate the industry from top to bottom. Apparently I’m wrong by not having one of those two opinions, but whatevs, you know?
  • Jim Hackett won’t be employed by the end of 2019. Ford is a ship currently lost at sea. They don’t know who they are, what they make, or how they’re going to do it. Nothing Hackett has done since taking over the CEO chair appears to have worked. Jim, let me save you the trouble. Kill everything but the F-Series and the Mustang. Kill Lincoln. Kill any talk of “mobility.” Save yourself. PS — Mary, you’re next.

All in all, 2018 was a hell of a year, but 2019 looks to have its own share of drama in the works. Good thing, too, or else I might not have much to write about.

[Image: JRE/YouTube]

Mark "Bark M." Baruth
Mark "Bark M." Baruth

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  • Krhodes1 Krhodes1 on Jan 01, 2019

    Fundamentally, Tesla is Apple, but making cars. Highly regarded but ultimately not nearly as special as their devotees think products, sold at OUTRAGEOUS prices. The difference being that Apple has figured out how to make mountains of money doing so, because they actually understand how to mass produce things. I really don't care if Tesla lives or dies. I'd never even consider buying one until they cost commensurate with what they actually are, which is about half the current MSRPs. I think Bark is pretty spot on with the whole list.

  • Vehic1 Vehic1 on Jan 02, 2019

    Hummer: And there's the view from his remaining 39%.

  • Kwik_Shift_Pro4X As much problems as I had with my '96 Chevy Impala SS.....I would love to try one again. I've seen a Dark Cherry Metallic one today and it looked great.
  • Susan O’Neil There is a good reason to keep the Chevrolet Malibu and other 4 door family sedans! You can transport your parents and other somewhat handicapped people comfortably and safety! If someone can stand and pivot you can put them in your car. An armrest in the back seat is appreciated and a handle above the door! Oh…and leather seats so your passenger can slide across the seat! 😊Plus, you can place a full sized wheelchair or walker in the trunk! The car sits a little lower…so it’s doable! I currently have a Ford Fusion and we have a Honda Accord. Our previous cars were Mercury Sables-excellent for transporting handicapped people and equipment! As the population ages-sedans are a very practical choice! POV from a retired handicapped advocate and daughter! 😊
  • Freddie Remember those ads that say "Call your doctor if you still have...after four hours"?You don't need to call your doctor, just get behind the wheel of a CUV. In fact, just look at one.I'm a car guy with finite resources; I can't afford a practical car during the week plus a fun car on the weekend. My solution is my Honda Civic Si 4 door sedan. Maybe yours is a Dodge Charger (a lot of new Chargers are still on dealer lots).
  • Daniel J Interesting in that we have several weeks where the temperature stays below 45 but all weather tires can't be found in a shop anywhere. I guess all seasons are "good enough".
  • Steve Biro For all the talk about sedans vs CUVs and SUVs, I simply can’t bring myself to buy any modern vehicle. And I know it’s only going to get worse.