Recently by Eric Peters: Legal Tender… Except When It's Not
How many car brands have died-off over the past ten years? How many will die off during the next ten?
Among the dearly departed: Pontiac, Saturn, Hummer, Mercury, Oldsmobile, Daewoo, Isuzu, Saab, Plymouth.
That’s nine. Which is a lot.
There are still arguably too many contenders for too few buyers. Hair-thin profit margins for a product that requires major investments of capital to R&D, market – and bring successfully to market. Increasingly onerous, expensive-to-comply-with government mandates – such as the soon-to-be-in-force 35.5 MPG mandate Obama, et al, crammed down the industry’s throat.
It’s getting much tougher to make a buck selling cars.
So, who’s next?
Here are some likely dead pool contenders – and some thoughts as to why they may not make it:
There are some dark clouds gathering above the sign of the triple diamond. Not one new model is on deck for 2013. Everything’s a carryover.
And nothing’s selling well.
The newest model – the iMiEV electric car – has barely registered its presence. Partially because it’s not yet available in all 50 states – and probably also because its maximum range under ideal conditions is only about 60-75 miles. For many otherwise-interested buyers, that’s cutting it too close. A safety recall this summer for defective airbag sensors hasn’t helped.
The once-popular Eclipse sports car has been eclipsed by the passage of time – and allowed to die on the vine. It hasn’t been significantly updated (mechanically, as opposed to minor cosmetic tweaks) since 2006. The current model is thus pushing seven years old. Production of this car actually ended mid-year, with no apparent replacement on deck.
The current Lancer sedan also dates back to prehistoric times, automotively speaking: 2008. It won’t be significantly updated for 2013, either.
Meanwhile, every competitor model is either all-new or significantly updated – leaving the Lancer looking (and feeling) like yesterday’s oatmeal.
The high-performance EVO version of the Lancer – which just a couple of years ago was considered one of the hottest cars on the market – has likewise become long in the tooth. The current EVO is five years old now. A lifetime in a market where three-year product cycles are becoming routine. The high-performing but also highly thirsty (17 city) car’s future is also threatened by the 35.5 MPG fuel efficiency edict that goes into effect in 2016.
Subaru, meanwhile, launched an all-new (and 34 MPG-capable) Impreza last year. And, of course, there’s the new BRZ … .
The 2013 Outlander is the same as the 2012 Outlander. Which was the same as the 2011 Outlander.
And the 2010.
A reboot is supposedly coming … but not before late 2013 as an early 2014 model. Can Mitsubishi afford to wait that long?
The truly ancient – and slow-selling – Galant is also being retired after this year. It has been the same for eight years.
A cursory look at Mitsubishi’s recent sales figures shows some truly titanic declines: Down 40.1 percent in June 2012 vs. June 2011; total exports from Japan to all overseas markets down 34.1 percent. Total passenger car production for the first six months of 2012 down 10.2 percent.
The one bright blip on the radar screen has been sales of the Outlander Sport – the only new – or at least, recent – model in the Mistubishi lineup, other than the MiEV electric car. In September, sales of this model (it’s different from the regular Outlander) were up 49 percent, with 2,253 sold. However, the bleak fact remains that Mitsubishi’s overall sales were down 17.2 percent for September. August was even worse: 46.8 percent. July: Down 47.4 percent. (See here for more.)
Such a nose-down trajectory can only end up one way: in a sleeps-with-the-fishes scenario.