Saturday, September 10, 2005


CAFE Society

Myself I think CAFE is sort of a mixed bag. On the plus side, a lot more fuel efficient cars are made available at a low price to the market. If car makers were constrained only by the market demand on fuel economy there probably would not be nearly so many fuel efficient cars on the road. The auto makers have invested where the market was not in order to move high economy cars that would offset their profitable vehicles (in the PT Cruiser's case, trucks). They have added tech and features and cut prices to move the necessary number of economy cars. So many folks bought a smaller car than they would have had the automakers not been selling CAFE offset cars at a loss.

On the downside, this flood of cheap iron into the economy segment has associated small with cheap in the American mindset. Ford's will not bring their new Focus design to the US because it is too costly. Many European makers cannot sell their compact cars at a price the market will pay. Unfortunately the domestic iron has suffered terribly in quality as well. The Dodge Neon and Ford Focus were both very nicely designed cars with horrible quality issues at first. I think in part this is due to cost cutting (hard to justify spending more on a car you are going to lose money on).

No comments: