Death of The American Car; GM kissing Sedans Goodbye.
The year is 1950. The war In Europe is over, the forces of fascism lay in ruins, and the cold war is brewing like a seething pot of coffee. Eager GIs return home and reenter the workforce, setting the economy off to a booming start, and what to spend their new found prosperity on? Why, new homes and cars, of course! And not the diminutive, wimpy microcars of postwar Europe. American cars: big, lofty, stylish, and increasingly powered by bigger displacement V8s. Chevy gave the returning GIs affordable style, Buick gave the middle manager type affordable luxury, and Cadillac was stamping out the world standard for luxury, with the sight of its V-shaped crest proudly proclaiming “I’ve made it.” It’s the golden age of the American car as we instinctively imagine it, and nothing can bring it down…or so it seemed. Fast forward 68 years. Chevy’s once stylish sedans are now bland and uncompetitively styled, Buick is only luxury in an theoretical sense, and Cadillac has fallen from the world standard to a glorified entry-level luxury brand. The American car has at last completed its long, slow fall from grace. Of the “Big Three” (GM, Ford, and Chrysler,) Ford has killed all of its sedans in North America, with the sole exception of the Mustang. And GM just killed off 6 of its sedans. Chrysler, which seems to be in permanent restructuring purgatory at this point, only has three sedans left, the increasingly long-in-the-tooth 300 and Dodge Challenger, plus the Charger. It would seem the American car is finally dead. So, what happened? Lets look at what killed the American car.
The 1950s and 60s were, I would argue, the golden age of the American car. The Big Three knew what their customers wanted: big, fast, gas guzzling, V8 powered beasts; or so they thought. During the 50s and 60s the Big Three had killed almost all of the smaller domestic brands by pricing them out of the market. Nash and Hudson merged and formed the American Motors Company (AMC), they had planed to bring Packard and Studebaker on board, but disagreements between executives kept them out of AMC. Studebaker and Packard remained independent until the pricing wars killed them in the early 60s. It was pricing that killed Packard and Studebaker not a failure to innovate, The Big Three didn’t innovate new products that were of better quality that appealed to a larger consumer base, they just simply sashed prices. While The Big Three focused on killing domestic competition, a new breed of cars where entering the marketplace. They were small, slowish, sipped gas, and were powered by small engines. A far cry from the American standard, but they started to carve a comfortable niche in American car market in the 1960s. Imported cars of this description, like the VW Beetle, took off with greater success that anyone might have guessed, and the first Japanese nameplates, Nissan (under the Datsun brand) and Honda, started selling cars in the US. The Big Three didn’t pay them much notice; after all, these new imports were small and fairly ugly. But, they were selling.
Then, with the 1970s, the good times were abruptly ended, and a middle eastern oil embargo threatened to bring the American car to its knees. The price of gas to skyrocketed, and for the first time since WWII, consumers were facing significant gas shortages, even rationing.
The American cars, with their thirsty V8s, lined up all around the gas stations, while smaller imports wizzed right past. This was the moment when consumers took notice en masse. After decades of constant sales growth, the Big Three saw declining sales of their traditional bestsellers, as customers took to smaller, more fuel efficient, imports that the American makes couldn’t match. In response, the Big Three rushed all new compact cars to market, such as the Chevy Vega and the Ford Pinto. But these cars flopped like a fish out of water by all objective design and performance standards. The Vega tried hard, and automotive legend John DeLorean oversaw the project; initially it was looking good. Motor Trend named the Vega the 1971 Car of The Year. But, the Vega was plagued with engine issues, rust, drive axle problems, and endless recalls, all after being overhyped by Mr. DeLorean. The Vega, and its sister cars across GM’s other brands, tarnished the whole company’s image. It painted them as out of touch— and they were. Ford likewise rushed the Pinto to market to meet consumer demands, it too was plagued with issues, worst of all being that it could explode in a rear-end collision and kill you. Instead of saving the American car, the Vega and the Pinto nearly killed it. Meanwhile imports, with Mazda joining the mix, continued to grow their market share.
After the failure and PR disasters of their new compacts, American automakers were loath to change. They saw the growing popularity of the compact imports, they saw sales dropping, but they largely refused to changed and adapt to a changing market. This failure to change and the killing off of smaller domestic competitors, who are generally faster at adapting to market changes, created a false sense of security within the Big Three. These factors helped lead to the death of the American Car.
Since the 1970s the American car has entirely failed to lead the industry. Imports may have started out leading the largely untapped compact market, but it wasn’t long before they refused to settle for merely leading in fuel economy. By the 1980s, Honda, VW, Nissan, and Mazda really rose to prominence, Although VW had enjoyed a cult following in the US since the 50s. During the 80s VW introduced the new hatchback Golf (originally called the Rabbit;) Nissan the Sentra; Honda the Civic; and Mazda the Great Little Car, or GLC (now the Mazda3.) All of these cars where introduced in the 70s, but really rose to prominance in the 80s, thanks to car magazines and TV shows taking serious interest in what the imports had to offer.
The descendants of all these cars are still sold today, though some of the names have changed. Think about that: cars first introduced in the 70s are still in production today. The 80s showed American automakers that the imports were here to stay.
So, how did the Big Three respond? Chevy gave us the Citation, a dinky compact car that, like the Vega, showed promise at first. It won Motor Trend’s 1980 Car of The Year. But, also like the Vega, it failed to deliver quality alongside economy size. It was poorly made, suffered from horrible torque steer, and the rear wheels would lock under braking. It was discontinued after just one generation, in 1985.
Chrysler, meanwhile, created the highly adaptable and successful K car compact platform, though it was short lived. It saved the company, but the cars it undergirded weren’t class-leading or awe inspiring.
Ford responded with the Fiesta: another compact that failed to deliver in the US market. It was ugly and under-whelming, though it did well overseas.
One begins to notice a troubling consistency: none of the American cars mentioned made it out of the 90s. They couldn’t compete with the imports, they no longer led the pack and where being forced to play catch up, something the manufacturers were not used to doing, and they weren’t very good at it. In the luxury market, too, Cadillac was falling fast: the 80s and 90s were not easy on the brand. Jaguar, BMW, and Mercedes Benz had eroded Cadillac from its chromium thrown. While they all offered performance and luxury, Cadillac was struggling to offer either, with high prices and V8s still chocked on emission regulations, no amount of fancy ostrich leather could make amends with consumers.
So, the American auto makers not only failed to recover their leadership positions in North America, they even failed to adequately play catch-up. The Big Three fell flat on their face, and couldn’t quite make out how to get up.
The Big Three are big, hence the name Big Three, but by the 2000s they had become even bigger. Perhaps thinking that if they couldn’t beat the imports, they’d simply buy their way in, all three American automakers began ventures in conglomeration. In 2008, GM found itself containing a whopping 9 brands, one for just about every automotive segment. This tied the company with British Leyland at its height in terms of overlapping nameplates. Ford had acquired a majority sake in Mazda, and Chrysler, after buying American Motors in 1987, had dipped its fingers into every market it could think of. The Big Three now had a car for every need, in some cases more than one. Their business models, like the stereotypical American public, were fat, bloated, and heading for disaster. The unsustainable expansion came to a head in 2008, when the stock market and economy crashed. GM suddenly realized it was in debt up to its eyeballs. Ford owned lots of money too, and Chrysler, which had actually slimmed down before the crash, was on such shaky footing that it couldn’t handle the market collapse at all. GM was forced to file for bankruptcy in 2009, and were required to cut 4 brands: Saturn, Pontiac and Hummer, while Saab was sold to the Dutch. Ford sold its stake in Mazda and mortgaged itself to the hilt to stay afloat, and Chrysler ended up being acquired as a part of its bankruptcy. They changed hands a few times before being bought by Fiat in 2014.
The Big Three had refused to slim down, but they didn’t sell well enough to justify the added fat. They had operated on the idea of if we build it, the customer will buy it. But nobody bought the Chevy SSR, or the Jeep Liberty. This turned out to be an awful strategy, compared to the import market which only sells what sells in the US. They carefully trimmed their lineups before being brought over.
And now, GM has slimmed down again, with 6 sedans getting the ax. This cull includes the decently selling Cruze, and the Volt. Personally, I think GM should have took the internal bits from the Bolt, and transplanted them in the Volt. That way GM would have kept a full electric car, and a known nameplate.
It would seem the American car is finally dead. But where does that leave us? While American automakers are dropping the sedan in droves, the imports are still hanging on. Honda, Toyota, Nissan, and Mazda have no plans to kill their sedan lineup, with Mazda is even unveiling an all-new Mazda3. The American car is quickly disappearing; while I doubt it will ever completely disappear, it serves as a lesson of what happens when car companies fail to react to changes in the ever shifting market. Let’s hope the American SUV and truck has better fortunes.