By Richard Howell-Thomas
Six cylinders good, eight cylinders better. For so many years the mantra of the all-American car buyer, but now a purchase influencer rapidly falling from grace.
Witness the fact that the Fiat 500 is a common sight on city streets here in the US. It’s a small car in Europe let alone in the birthplace of the gas guzzler but its popularity clearly reflects a sea change in the expectations of many US motorists.
Auto manufacturing has undergone a considerable shake-up, to say the least, in recent years following the virtual collapse of General Motors in 2009 and the knock-on effect that had. Essentially GM had lost focus, creating too many models for too many market segments plunging its cash flow into negativity.
Sales of ‘light motor vehicles’ in the US bottomed that year at around 10 million but the recovery began almost immediately and is continuing. Overall, car sales have fallen significantly from the high spot of 17 million plus units before the financial crash, but the rebound is clear to see with sales in 2011 standing at the 13 million mark and sales for 2012 forecast to reach 14 million units.
And it’s the domestic manufacturers – GM, Chrysler and Ford – who have benefited most as each one has increased market share. By the end of 2011 domestically-produced cars took a shade under 80% market share compared with 73% in September 2009.
The loss of consumer confidence in Toyota played a part in this as did the consequences for Japanese car makers of the country’s earthquake and tsunami but, more importantly for US auto makers, has been their increasing focus on fuel efficiency and build quality. The big three’s ‘next generation’ vehicles are going down well with buyers feeling the financial pinch at home and keen to make savings where they can.
While fuel prices topping out at around $4 a gallon (about £2.50 a gallon, or 55p a litre) may not attract much sympathy from European and UK motorists, that figure represents a significant hike for US drivers. Bear in mind that this is a big country and that long distance commutes are common so an increase at the pump of some 25% in the last five years can represent a lot of additional expense for an average American family.
So the home grown car makers are, at last some might say, on the quest for smaller, lighter vehicles with efficient engines and consequent good ‘gas mileage’. Progress is being made but, by European standards, fuel consumption is way high – for example the US Department of Energy’s fuel comparison website features the Ford Fiesta as the most fuel-efficient petrol-driven (non-hybrid) American-built car on the market with an average 37mpg.
That figure wouldn’t impress many British drivers and until the US market embraces the use of small, efficient, powerful diesel engines, buyers will continue to suffer these comparatively poor fuel economy figures. While American manufacturers have come a long way, they can undoubtedly benefit from the expertise crafted over recent years by the British and European automotive industries in fuel efficiency and pollution reduction.
The US auto industry continues to look increasingly to Mexico for the supply of high labour, low expertise components where a wiring loom costs a dollar or two to assemble compared to as much as $23 for the same task in a US plant. But the supply chain for high tech components requiring special skills and equipment is another matter and if US car makers are serious about developing their brands along fuel efficient, reduced pollution lines then there will always be potential for British component manufacturers to play a part.