The automotive industry has lost its damn mind

Okay automakers, we need to talk. I’ve seen enough. Heard enough. Had enough

There’s something really, really wrong here. In 2023, we’ve seen the prices on virtually everything we consume soar to heights that has left financial analysts appalled, intrigued, and somewhat confused. 

And the rest of us filthy broke.

CHEESE is $15. So, you might wonder, what’s the situation in the automotive world, especially for hopeful car owners? 

Not great. Actually, really bad. It hasn’t stopped every automaker, domestic or otherwise, to serve customers with any possible excuse under the bright sun for spiking their prices; and, chances are, you, my dear readers, have heard at least one (albeit not exclusive to cars either): 

“Inflation. It’s driven the cost of everything up.” 

“The pandemic screwed things, so we are struggling to get inventory.” 

“The war in Ukraine.” 

“The cost of raw resources has gone up.” 

“The sun is too bright.”

To be fair, at least one of those things is closer to the truth, but it isn’t by any means a reasonable explanation for every single cost increase we’re seeing right now. It certainly doesn’t add up in the showroom, yet, despite astronomical costs, people are still laying down their hard-earned cash, whether it’s out of a lack of choice, lack of knowledge, or are simply too rich to give a shit – after all, these are the customers who walk into showrooms right now. The rest of us are outside licking the showroom windows. 

So. After many visits to multiple dealerships, discussions with salespeople and owners alike in the last two years or so, I’ve flagged a few things that are genuinely concerning and alarming.

This is by no means the gospel truth either, so take it as you will. 

Elimination, consolidation of base trims

One of the most obvious factors in why cars, even cars that were considered cheap, is the quiet elimination and consolidation of base trims. A great example of this is the Honda Civic. At one point or another, you could walk into a Honda dealership and buy a no-frills Civic with vinyl seats, a basic stereo, a manual transmission and basic steel wheels, all for the price of roughly $15,000. Today, a base Civic (at least in Canada) STARTS at $28,000. Let’s not forget, the Civic, much like the Corolla, is a cheap compact sedan; for decades, it was the poster boy for affordable car ownership. So why does the base model cost as much as an older-generation Si, or a base model mid-size sedan or SUV? 

This mid-range 2023 Civic commanded an appalling $41,496 MSRP at a local Victoria Honda dealership
Wait, it comes with ALL WEATHER MATS!? 41k must be worth it then! Right? RIGHT!???

Well, part of that answer is rather simple; they cut the base trims and consolidated them into a whole other trim level as the new “base” model. You still get the cheap vinyl. You still get the steel rims and hubcaps. Where is the… “more” in $28,000 you might wonder?

Read on.

Stuffed with electronics and features 

I wanted this to be its own point, because while it connects to the first reason above, so it’s important to be independently dissected. I will also stick with the Civic as the central point of discussion as it’s a good example. A lot of it has to do with the way cars are manufactured today, what safety standards they need to follow and what tech is rabidly desired by customers these days.

An army of robots stitch together a car at the Jefferson North plant in Detroit (Fabrizio Costantini/The New York Times)

My 2011 Civic for example, shares almost no resemblance to my partner’s 2018 Civic. My 2011 was crude, but equipped with all the raw essentials; a decent radio/CD player with an AUX jack; anti-lock brakes, and a basic but well-orchestrated digital speedometer; it even had curtain airbags for the passenger and driver, along with two more airbags in the dashboard. That’s it. In comparison, the 2018 Civic, which was also a base trim, was around $4,500 more than what mine cost me in 2011, with differences that were immediately noticeable. Inside, a digital infotainment system with phone integration (no CD player anymore though); fully-independent suspension on all four wheels, a full suite of ABS, traction and stability control systems, a reinforced A and B pillar, as well as a complete set of airbags from the front all the way to the back of the car, including a knee airbag. Under the hood, a five-speed automatic and 1.8-litre was replaced by a continuously variable transmission (CVT) and a 2.0-litre, also naturally aspirated. 

So in name, they are the same. But in reality, they are two totally different cars. The Civic also increased in scale, leaving behind its compact roots and inching ever closer to a mid-size sedan. You could park a modern Civic next to a 90’s or even early 2000s Accord and they’d be surprisingly comparable in size. Not only has the Civic grown bigger, but it’s also loaded with creature comforts and safety features (some of it federally-mandated). Yet none of those things are free; all come together as added costs, which ultimately get passed on to the customer. It makes sense on paper, but not when you’re asking thousands of dollars more, because at the end of the day, the Civic is still a Civic. Everything extra tacked on to it right now doesn’t ultimately give it better value; it may be safer, it may be better equipped, but it’s no longer affordable. I stand by the fact that a Civic should not cost as much as a mid-size vehicle, which, in most cases, is supreme in practicality, comfort, functionality and power. 

Price gouging on popular models and electric vehicles

This one really, really gets under my skin. This isn’t because I am a know-it-all when it comes to cars. I do know however, the meaning of value, and the importance of finding the right vehicle for the right price, using enough of my background and knowledge of cars and the automotive industry to make a reasonable decision of what is within a reasonable cost… and what is egregious price-gouging on behalf of countless dealerships.

I’m going to use the new-ish Ford Bronco to start. Right now, it is one of the hottest 4×4 off-roader out there – and while it closely shares a platform with the Ford Ranger mid-size pickup, it’s the neo-retro look of the Bronco that’s gotten people all excited, with its late-60’s, early 70’s styling and persona (despite the fact that it isn’t at all the same, underneath, and is far more mechanically complex than its grandfather).

An early 2020’s model Ford Bronco (Ford)

A simple walk around any Ford dealership that does have one on the lot will reveal some seriously-eyebrow-raising MSRP stickers. At one point right after the pandemic, a local Ford dealer was asking over $80,000 for what is, essentially, a fancy Ranger in a retro suit. A Ranger, which, on its own, has an actual value of no more than $30,000. At closer look, you notice things too, that, perhaps, you wish you didn’t; rough plastic edges with plastic shavings still sticking out from where the factory couldn’t be bothered to smooth down, random internal components and cables sticking out in plain sight, not to mention a spartan interior with few luxuries in sight (unless of course, you want to spring in for higher trim levels, for a lot more money). 

MSRP sticker for a Mustang Mach 1. Call it special, but it ain’t $80,000 worth of special. Because at the end of the day… it’s still just a Mustang…

Or another example, just down the street, at a Subaru dealership, which had four new Solterras on the lot. The Solterra is Subaru’s first official all-electric vehicle, even though it is actually a blatantly-obvious rebadged Toyota bz4x crossover. As I looked at one, a (somewhat reluctant) salesman stepped out and asked me if I was looking for any help. I kindly said no thanks, just looking – after which I asked him how much does a Solterra go for.

I kind of already knew the answer.

“$67,000, or $56,000, depending on the model,” he said, shaking with slight terror as he saw my face shift from disbelief to angry discontent. 

“Ooof. That’s stiff. That is really, really stiff. Wow,” I exclaimed. He soon got the gist that I wasn’t interested in his “help” and that I wanted him to kindly fuck off now. 

Also, let’s not get anything mixed up here – it’s not because it was an electric, or that I have a hatred for Ford, or any manufacturer for that matter – no, the reason it gets me all riled up is because the VALUE, the value of what they are asking for, does not match what they are giving in return. 

Not even close.

A poorly-assembled Bronco does not have a value of $80,000, which most of us have to work really, really hard for. Neither does a Mustang, regardless how cool it looks and how fast it is. That’s the yearly salary of two years worth for many. For a fucking simple truck/SUV or a low-level sports coupe.

Or the Solterra, what is a basic Toyota sled with a ton of batteries slapped in it, which looks just as boring and generic as every other goddamn crossover out there. I don’t even look at badges anymore because it doesn’t matter; everything looks exactly the same. 

Boring, lifeless, repetitive design 

….aaaand yup, you know this was coming. Take a look around. On the street. At a dealership. Any dealership. Then walk over to another street, and another dealership. You’ll think your eyes are playing tricks, but nope, you’re not seeing double, you’re just seeing the same thing that is designed to match the other same thing that it is trying to look like. Following me here? 

Every parking lot is essentially dominated by the tubby shoe-like shape of the modern crossover.

Every single manufacturer is guilty of this. Even the likes of Rolls Royce, Ferrari, Lamborghini, Maserati and now Aston Martin are all pumping out crossovers/SUVs. What an utter desecration and humiliation of their brand and their badge, given that none of these four-wheeled aberrations are distinctive in any way. They blend into any parking lot like the rest of the mass deluge that’s flying out of showrooms these days. 

At every corner of a brand-new vehicle right now, you get a disheartening sense that there are minuscule cost savings, all carefully hidden beneath a false sense of luxury and appointment.

“But it’s what consumers want…” 

No… it’s what you, the regulators, the manufacturers, the designers, the marketers, the PR agents, the gatekeepers to all that is information and control of norms and ideas in today’s automotive industry, are telling the public. When the SUV started becoming popular in the early 90s, the station wagon was tossed aside, despite its decades-long proven practicality; not because it became impractical overnight, but because that’s what we were told.

I hear the same thing when I get into discussions with people about pickup trucks. “Oh but I can haul a skid with my pickup.”

That’s nice, so can I in my Outback station wagon, with half the footprint and a fraction of the gas.

But that’s another topic for another time. 

Freight and shipping costs

This one is my favourite. Look at any MSRP sheet on a new car at a dealership; it will have a breakdown of what the costs are – any federal or provincial fees, environmental taxes, and… freight. In the past (talking less than eight years ago) that used to be anywhere between $200 and $500, depending on the vehicle and the dealer. So of course, I couldn’t believe my eyes when I saw a whopping $1,950, ON TOP of an already inflated MSRP sticker on a 2023 Subaru Crosstrek. 

Why are consumers being charged just shy of two thousand dollars for just bringing the vehicle over to the lot? Why should we fucking care? This is the cost of an entire option, like a more powerful engine, a sunroof or other, additional features to the vehicle. This is just freight! No, I understand the cost of fuel is up; cost of continental and global shipping is up; but no one can say this is entirely justifiable.

Value, value, value

I can’t say this enough – or ask it enough, where is the value. Where is it? Fine, ask what you will for the vehicle you are selling, but are you giving as much in sufficient value in return? If not, then that’s a big, big problem. And people are starting to notice. 

Mercedes-Benz for example – a prestige brand known for some of the most luxurious, powerful, sophisticated vehicles and world-renown for all the innovation and ingenuity it has brought to the development of the automobile – is now seen as somewhat cheap and chintzy. Everything from cheap interiors to lackluster design, to highly-publicized quality issues and premature maintenance problems, all have collectively stained the Silver Arrows brand, possibly for generations. 

We’re seeing this effect across all other luxury brands, even mid-range and lower-tier brands. At every corner of a brand-new vehicle right now, you get a disheartening sense that there are minuscule cost savings, all carefully hidden beneath a false sense of luxury and appointment. And who else to lead the way of this movement, than the #1 best-selling flagship for any manufacturer right now… yup, once again, the crossover. 

“Just keep smiling, maybe they won’t know how much we paid for this Corolla”

Believe me, I have no intentional desire to turn the crossover into some kind of boogey man of the automotive industry; some are, in fact, well-priced, with a nice repertoire of features, and look distinctive from the rest of the herd. But they are rare, and are getting further and further away from reach of the average person. It also doesn’t help that crossovers typically take everything that’s bad in the modern car industry today (complacency, cheapness, laziness, boring design, high cost) and shove it all into a single vehicle.

In some cases, it’s even a matter of “live long enough and you see yourself become the villain” – looking right at you, Mitsubishi Eclipse.

(For those who don’t get that reference, the Eclipse was a sporty two-door coupe that was popular in the 90s and early 2000s, until Mitsubishi decided to bring back the nameplate in crossover form.) 

But I digress.

Bottom line is value. And from my impression, it seems a lot of consumers have lost sight of that. We’re so used to throwing money at everything that we no longer ask why.

And we absolutely should. 

Wait lists, deposits, and more excuses

I recently went with a friend to a local Subaru dealership, since he’s been considering a Crosstrek, to get an idea of how much it would cost him with a possible trade-in option. Towards the end of our visit, the salesman dropped a mini-bomb on us which to this moment I’m trying to process. He said, “we have no Crosstreks left for 2023. They are all gone. You’ll need to put down a refundable $500 deposit and wait 6-12 months until we can get one in.”

Wait, what?

I was flabbergasted, shaken. The immediate response in my head was, “You want me to put down $500 that, y’know, I just have laying around, on a car that will arrive in SIX MONTHS TO A YEAR… that I may not even like. You’re kidding me right?” It’s not uncommon for dealerships to not have the car you want right on the lot. But we’re talking something special here, like a 911, or a Testarossa… not a fucking Crosstrek.

The supply chain issue I keep hearing is also pure nonsense. While this may have been the case at first following the pandemic, it doesn’t explain this sudden and widespread demand in cars. People still bought cars during the pandemic; in fact, people bought EVERYTHING during the pandemic. So much so that countless companies found themselves with their trousers down in Q4 2022, realizing that those waves of profits weren’t gonna last forever.

We’re so used to throwing money at everything that we no longer ask why.

But if we follow the logic here, it supposedly falls down to the consumer being the main driver of this phenomenon, since dealers and manufacturers keep citing “high consumer demand” – it’s either that I’m missing something here, or suddenly everyone has a line of credit, a credit card, or some pile of cash they didn’t have previously. Otherwise, who the fuck is buying all these overpriced heaps… and with what. So, this tells me that A) manufacturers are playing some kind of game of greed with consumers, also posing as victims that they don’t have enough to serve their consumers (which isn’t true) or B) people have lost their minds and going chin-deep into debt that not 300 lifetimes will ever save them from. 

Both scenarios are entirely possible, albeit idiotic.  

Used models that cost more than their new counterparts

This used to be an anomaly, something you’d see once in a while at some obscure dealership – now, it’s the norm. And it has nothing to do with the used version having anything better or more kit added to it; same engine, same tires (with considerably more wear) same tech, same everything. 

What’s particularly interesting is that these overpriced listings for used vehicles feed into the whole vicious cycle of double-kicking the customer, and it’s always the same scenario: customer goes to a dealership, wants to buy a new Toyota Tacoma. Dealership tells them they’re all sold out and they need to put down a deposit and go on a waiting list (for reference, a local Toyota dealership told me their wait list for a 4Runner is up to three years). So the customer, now kind of pissed off, walks out of the dealership and goes to a used car lot. He then finds the same Tacoma, maybe a year or two older, with visible wear and tear, which costs more than the new one he was trying to buy. I really do wish that I was making this up, or exaggerating, but this happens very often these days. 

A 2023 Toyota Tacoma (Toyota)

The customer is then left with two very shitty choices: they can get the vehicle the want right now, but pay more for it, on top of the fact that it’s used, or they go back to Toyota and pay the already-inflated price for a new truck, because by that point, it looks like a bargain. 

What’s next? Where do we go from here?

I have believed, for some time now, that the automotive industry is going through a phase of transition and uncertainty. A global push for EVs has drastically shifted the landscape for manufacturers to start pumping out these things in larger numbers, which, in turn, is nudging governments more to expand EV charging infrastructure that is still embarrassingly behind. Drastic impacts of climate change, dwindling resources and constant global conflict over fossil fuels in recent years has also added immense pressure on manufacturers to trim down their costs and explore alternative means of propulsion, which so far has rendered mixed results, with much of that burden of cost being dumped onto consumers.

Automotive design and technology has also plateaued; there seems to be a stagnation in new ideas, and there’s a popular trend of old concepts and nameplates being resuscitated for another kick at the can. We’ve yet to see what all this transition and soul-searching will amount to, and who knows if that will even happen in our own lifetimes.

There’s further indication of where things are headed in terms of cost and affordability, like how Car and Driver recently quoted a Toyota executive saying the “average” cost of buying a car will reach $50,000 this year, meanwhile the average car owner in North America has a monthly car payment of $500 – $700.


*deep breath*

Okay, well, all this is seems rather gloomy – and it kind of is. So, how much worse can it get?

Ultimately, I believe that depends on us, the consumers. Simply going along with the bullshit allows fertile ground for this kind of hostile buying environment, where vendors of virtually anything (not just cars) feel fully justified in their asking prices. But what will they do without customers? What will happen when showrooms suddenly go silent because people are far too deep in debt, too unhappy and frustrated with the status quo?

I guess only time will tell.

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