Nissan exec: Car culture is fading

[imported_Green Tea]

DETROIT (Fortune) -- If you are looking for some insight into what the automobile of the future will look like you could do worse than talk with Tom Lane. An American, he runs all of Nissan's Product Strategy anad Product Planning from his office in Tokyo.
Unlike most executives, he welcomes the imposition of new U.S. fuel regulations that mandate 35 miles per gallon by 2020.
"It is not an issue" for Nissan (NSANY) he says.
He expects the new regs to drive more small cars, improved technoloy, and a broader variety of shapes and sizes, as designers try to get more variety out of similarly-sized vehicles.
But he points to some discouraging global trends that don't bode well for the industry.
He notes that consumers in Japan are losing their mojo when it comes to cars. The population is aging, and younger drivers would rather spend their money on new cellphones and Internet access.
"Japan is increasingly not interested in new cars," he says.
The population in Europe is aging too, and Lane sees similar ennui spreading there. As car ownership becomes more expensive and cities increasingly impose congestion pricing on car usage in center cities, he sees car owners switching to mass transit for their daily commute, and then renting cars for longer trips.
"The U.S. is headed that way," he says. "The challenge for us, going forward, is a more interesting offer. Doing a better Sentra or an Altima isn't going to do it."

http://money.cnn.com/2008/01/14/news...tune/index.htm


Don't see it, but I do not often look at sales numbers for automakers.
What do you all think?

[Dave]

I think Nissan is whining

Although some of that story may have merit the us would boy be heading that diection if cars like the new supra actually cam out... And we got BMW s true fusel engines like the 123d

[1ster]

Everything is cyclical. The thrill of going fast will be in our DNA for a long, long time. We may do it differently in the future (hopefully in very light, fuel efficient Elise-like cars), but the urge will always be there.

[Nixon]

Cars are too expensive now to be passion purchases for most people, so I wouldn't be surprised to hear that many love affairs with the car have been crushed.

Look at some of the classics. The Mustang was a CHEAP car compared to the rest of the Ford/Lincoln/Mercury line. Young punks with only a few bucks in their pocket could buy one. Then these buyers become life-long car nuts. The same goes for cars like the classic BMW 2002, which was much cheaper than BMW's higher up in the BMW line.

With a US median family income of $48,000 (before taxes), the median family can't afford to buy two $40K+ cars that lose half their value before they are even paid off. Reality hits Passion like a run-away train, and Passion loses.

Car makers are pricing themselves out of the market. Car prices have outgrown US incomes for the last 3 decades. New car sales have been surviving on increasing consumer debit levels that are no more sustainable than they are for the current housing market.

The key to revitalizing the passion is affordability. Cheaper to buy, cheaper to fill with fuel, to maintain, to repair, to insure, etc...

[imported_Green Tea]

Originally Posted by Nixon

Cars are too expensive now to be passion purchases for most people, so I wouldn't be surprised to hear that many love affairs with the car have been crushed.

Look at some of the classics. The Mustang was a CHEAP car compared to the rest of the Ford/Lincoln/Mercury line. Young punks with only a few bucks in their pocket could buy one. Then these buyers become life-long car nuts. The same goes for cars like the classic BMW 2002, which was much cheaper than BMW's higher up in the BMW line.

With a US median family income of $48,000 (before taxes), the median family can't afford to buy two $40K+ cars that lose half their value before they are even paid off. Reality hits Passion like a run-away train, and Passion loses.

Car makers are pricing themselves out of the market. Car prices have outgrown US incomes for the last 3 decades. New car sales have been surviving on increasing consumer debit levels that are no more sustainable than they are for the current housing market.

The key to revitalizing the passion is affordability. Cheaper to buy, cheaper to fill with fuel, to maintain, to repair, to insure, etc...

Very good points. Now if the auto makers will take a look.

[1ster]

Originally Posted by Green Tea

Very good points. Now if the auto makers will take a look.

I've got two concepts that were shown recently that went nowhere. Both would have made excellent entry level sports cars: Nissan's Urge (2006) and Dodge's Slingshot (2004). Both I4 engines, both RWD, both good looking enough to make an emotional connection with buyers...

[~AJ]

Originally Posted by izzodesh

And we got BMW s true fusel engines like the 123d

Diesel? Fuel cell?:iono:

[~AJ]

Originally Posted by Nixon

Car makers are pricing themselves out of the market. Car prices have outgrown US incomes for the last 3 decades. New car sales have been surviving on increasing consumer debit levels that are no more sustainable than they are for the current housing market.

Yup.

And I don't feel sorry for people that buy houses and/or cars that they can't comfortably afford. They made poor personal financial choices. They did it to themselves.

Discipline: controlling spending when your desire for something is bigger than your ability to pay for it.

[Nixon]

Originally Posted by AJ~

Yup.

And I don't feel sorry for people that buy houses and/or cars that they can't comfortably afford. They made poor personal financial choices. They did it to themselves.

Discipline: controlling spending when your desire for something is bigger than your ability to pay for it.

The only ones I feel sorry for are the home buyers who were told by their mortgage brokers over and over not to worry about the low teaser rates running out on their ARM's in 3-5 years. I feel sorry for the folks who were assured they could just refinance when the teaser rate ended, and are now being denied refi's to 30 yr fixed's through the exact same mortgage brokers. Licensed mortgage brokers who had a legal, fiduciary duty to represent the buyers' best interests in the transaction with the lender.

These should not have been cases of buyer beware. These licensed mortgage brokers were paid by buyers (through their commissions) to give them mortgage advice that matched the needs and risk level of each individual home buyer they represented. Many (not all) failed their clients, and sold them on any loan that would earn them a commission.

Sorry to any of the good licensed mortgage brokers out there - I know it isn't everyone, but the bad apples spoiled everything.

[Year1of1]

Originally Posted by Nixon

With a US median family income of $48,000 (before taxes)

is that number really true?! i make more than that and i'm only 23 :eyebulge:

[BForbes]

Originally Posted by Year1of1

is that number really true?! i make more than that and i'm only 23 :eyebulge:

I could believe it. Hell I'm 22 and will be making double that by the time I'm 25. I could understand why the culture is fading though. GAS IS EXPENSIVE...and cars are getting more and more expensive. For every new economical car a company comes out with they have a new gas guzzler coming out simultaneously.

[Year1of1]

what do you do for a living onehots2k? I'm a marketing director for a honda autogroup here in NJ. I'd love to see some of your s2000 shots. I was going to say I make double, but I didn't want to sound snobbish, at my age i watch myself when talking about salary.

[damian]

wow you guys are so rich.

[Year1of1]

bill gates is rich, not i

[Nixon]

Originally Posted by Year1of1

is that number really true?! i make more than that and i'm only 23 :eyebulge:

To be accurate, the 2006 median income was $48,201/yr. (2007 numbers won't be out until summer).

Keep in mind this is the median FAMILY income. So the $48K includes both paychecks if a husband and wife both work.

http://en.wikipedia.org/wiki/Househo..._United_States

The gap between rich and poor is growing.

[BForbes]

Originally Posted by Year1of1

what do you do for a living onehots2k? I'm a marketing director for a honda autogroup here in NJ. I'd love to see some of your s2000 shots. I was going to say I make double, but I didn't want to sound snobbish, at my age i watch myself when talking about salary.

Whoa, sorry it took me so long to supply. I totally forgot about this thread. I graduate in May of this year. I've gotten offers that greatly exceed the 48k median salary at a hedge fund company. On top of that I've been saving for 3yrs to start up my own person business that goes live in a year. Godwilling, I will be looking at 2 substantial incomes. I dont have any debt so if my business goes to hell then at least I tried. :biggrin: To be honest, sending more capital to my new business will be the only thing that will hold me off a little longer from the 1 series. IMO, it is well worth it. I might have a lot of problems down the road. Hopefully cash wont be one of them.--i hope I didnt sound snobby either. :smile:

Congrats on being so sucessful at what you do. Its really young people like you that inspire me.

-B