Tuesday, July 1, 2008

THAT THERE WAS URBAN BRONCO MUSIC, BUT CAN I HAVE MY '98 BACK NOW? Two and a half years ago, I lamented the lack of hybrid options between super-sub-compact and SUV. I wrote that "[i]t would have been nice, by the way, to see a faltering American auto industry getting ahead of the demand curve with a cool-looking luxury hybrid model."

Two and a half years later, the auto market is ugly. June sales for the industry as a whole are down 18.3 percent year-on-year, with low-mpg vehicles like the Explorer (sales down 50%) and the F-Series (down 41%) leading the drop. Meanwhile, Toyota and Ford couldn't meet demand for Priuses, Corollas, Yarises, or Focuses (Priii, Corollae, Yarii, or Focii?). Even when automakers can shift production (expensively) to those smaller cars, their margin will be much lower.

So: two and a half years ago, the SUV and truck market was shrinking and consumers were shifting away to more fuel-efficient cars. A sizeable number of affluent consumers were buying hybrids that were less-expensive than their prior luxury cars and doing it for a variety of reasons. China's oil demand was rising and there was instability or hostility in three oil-producing regions. The auto makers knew all of this. And yet we still have the same options: a $60K Lexus, some SUVs, some compacts and subcompacts, an Altima, and a Chevy Malibu to replace the discontinued Honda Accord.

I know lots of Prius owners who love their cars, and I imagine that people driving that Lexus are pretty happy too. Wouldn't it be nice if Detroit, Tokyo, and Germany could make something daring in between that people could get excited about?

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