Are Customers Finished Buying Tickets to the Horsepower Race?
February 13, 2008
By Bill Visnic
The evidence is mounting. Big engines and huge horsepower no longer are the keys to the car-buyer’s heart. In fact, it quickly may become the opposite.
Installation rates for V8 engines -- the bread-and-butter powerplant for the horsepower wars that have dominated the U.S. market for more than a decade -- are dropping. And data from Edmunds.com extrapolating the purchase intentions of consumers actively shopping for a new vehicle show those potential customers are markedly less interested in V8 power.
Certainly, it’s a time of deep but swift transition for the U.S. light-vehicle market. At the recent Detroit auto show, there were numerous examples of high-horsepower wares, but they most decidedly were presented in modest tones, taking a back seat to whatever fuel-efficient and eco-friendly model or technology was available. The chest-thumping days of explosive, twin-Hemi concept SUVs are done.
Fewer Chrysler Models Ordered with a Hemi
Speaking of the Chrysler LLC’s seminal Hemi, there is perhaps no better example of how the worm has turned. Chrysler says installation rates sat at 38 percent at the end of last year for all models in which the 5.7-liter and 6.1-liter Hemis are installed.
The industry’s best-branded powerplant -- and for years the reason many buyers bought one of the dozen models in which the Hemi currently is offered -- was launched for the Ram pickup in 2004 and was available in passenger cars the following year. In the Hemi’s headiest days Chrysler boasted of installation rates of 60 percent or more -- 67 percent shortly after the Charger’s launch, for example, and comfortably more than 40 percent in numerous models such as the Durango, Ram pickup and Magnum wagon.
To Chrysler powertrain planners’ credit, the company always answered Hemi demand from a single plant, hiking production there through process improvements. In fact, though, Chrysler has for some time been discreetly trimming Hemi production as long ago as an announced cutback in September 2006 – around the time gasoline prices began to rise noticeably and consistently.
Now, Chrysler declines to break down Hemi installations by model, nor will it discuss how much capacity the Hemi currently is accounting for at its Saltillo Engine Plant in Ramos Arizpe, Mexico, which initially was constructed to build the Hemi.
New Edmunds.com Data: V8 Power Declining
The anecdotal evidence from the Hemi is backed by new data from Edmunds.com that shows customers shopping for and configuring vehicles are deciding to do without a V8.
Overall demand for V8s has dropped from 19 percent two years ago to just 15 percent now, said David Tompkins, Edmunds.com executive director. The public’s taste for eight cylinders in SUVs has dropped even more markedly, from 24 percent in January 2006 to 18 percent at the end of 2007.
Demand for V8 power in large cars also slid from 36 to 29 percent in the same timeframe -- and the same numbers apply to two-seaters.
One market segment in which V8 consideration is holding strong, said Tompkins, is full-size pickups. Demand actually has increased from 55 percent at the beginning of 2006 to a current 59 percent. Tompkins believes this can be attributed to the number of “casual” buyers vacating the segment, leaving a larger ratio of those who buy pickups for genuine work duty.
Today’s concerns about fuel prices and environmental impact may be relegating the V8 to true passé status. No less a luminary than Margo Oge, director of the Environmental Protection Agency's office of transportation and air quality, asked at a recent auto-industry conference if automakers wouldn’t cease and desist in marketing horsepower and instead turn their collective developmental resources toward creating customer-pleasing low-carbon transportation.
General Motors Corp. recently made headlines with a gutty announcement that it canceled a mature development program for a next-generation premium V8. California persists in its legal wrangling to define a de facto fuel-economy standard by strictly regulating carbon-dioxide emissions, which are linked to global warming. And perhaps most directly for consumers, fuel prices just keep rising.
Sum it all up, and the slogan “That thing got a Hemi?” just doesn’t have the carefree, playfully insolent ring it once enjoyed -- and the ring V8s once lent to automakers’ cash registers is sure to be a casualty, too.
Posted by at 1:19 PM under Analysis , Chrysler , Featured , Ford , GM , Technology | Comments (17) | digg this | Seed Newsvine
This is not good news. This looks like the dark days of the 1970s all over again, when the principal objective in most automobile manufacturing was to reduce the most from manufacturing costs, weight, and fuel consumption. One need only remember disasters such as the Ford Mustang II and Fairmont, or the Chrysler lineup of most of the 1980s, which was dominated by anemic four-cylinder engines, to recall the fruits of this fuel-crisis engineering. A temporary shift to smaller engines in the face of spiking fuel prices is one thing, but if this is in fact a trend, we won't just see fewer V8s available; the entire auto industry will run out of gas. Environmentalists may cheer at this, but consumers shouldn't. Let's hope the automobile industry, especially in North America, gets running on all cylinders again, and soon.
Posted by: Christopher | February 14, 2008 at 12:07 AM
This is no surprise. When are the car manufacturers going to wake up and be responsive to the interests of the car buying public? The success of the turbo powered cars (2.0T from Volkswagen and the turbo charged motor in the Saab) point to the future. You can have power, performance AND efficient gas mileage. Car companies need to simply get smarter.
Posted by: Jim | February 14, 2008 at 6:25 AM
Jim, you need to simply get smarter. Are you serious? How many VW turbos and Saabs are in your area as compared to Mustangs? Also, a very dear friend has had his 2007 Jetta 2.0T in the shop FOUR times in the year he has owned it, with FOUR separate issues, for a total of 26 days down time. Jim, folks of your ilk need to stop being apologists for foreign car companies. Jim, are you aware of the rape of Chrysler Corp. by Daimler? When all American manufacturing companies have been driven out of business or swallowed up by offshore interests, then where does our economy go? Everyone working at Wal-Mart hawking Chinese made goods?
Posted by: Bubba | February 14, 2008 at 6:59 AM
Bubba, it sounds like you need to get smarter. Those of us with an education are working at American software companies that dominate globally, like IBM or Microsoft or Intel, not working on automotive assembly lines. I'm sorry to hear about how bad things are at Chrysler, but many big 3 vehicles, in particular those made by Chrysler, simply aren't up to the standards of the rest of the world. Why would I encourage their sloppy behavior by buying their product? The future of automotive IC engines is smaller displacement forced induction or common rail diesel or hybrid electic. When $4 per gallon gas hits this summer, this trend will gain momentum. It seems Ford and GM are on the ball here, but I have yet to hear anything from Chrysler.
Anyone actually interested in this would see a great example by looking at how GM is transitioning to the DI V6 rather than the northstar V8. Customer acceptance of the V6 was so strong, the next gen V8 has been mothballed indefinately. To be honest, why buy a 320hp v8 over a 305hp v6?
Posted by: Ryan | February 14, 2008 at 10:26 AM
V8s made it through the 70s and 80s. They'll undoubtedly make it through the 10s and 20s too... if ICEs aren't replaced by something different.
Posted by: Courtney | February 14, 2008 at 10:35 AM
Ryan,
Sounds like you need to go back to school instead of hurling insults. As I recall the American Software companies are immune to exporting jobs. Each of your examples has branches in labor-cheap countries such as India, and are proponents of outsourcing.
American performance cars can and do get great gas mileage. I regularly get 26-30 mpg (highway) from my LS-1 340 hp Corvette.
Short sighted and trend conscious people like you who rely on rags like Consumer reports (flawed to the core by their own information collection methods) are the reasons why the US car makers have a problem. All cars have problems. Toyota and VW recall a bigger percentage of their cars than GM or Ford. Unfortunately our media is the most critical of domestic makes, giving the other makes a publicity advantage.
Why do you think that the imports choose to locate their plants in depressed areas of right to work states? Is it because workers in those states are better workers than workers in other states, or better than workers in Japan, Korea, or Germany? No it is because a) they want to avoid paying import duties (thus assemble cars / trucks from kits sent from the homeland) b) want to avoid the unions and prefer areas where the prevailing wages are lower
and c) want to play like they are "American" because employing 1 worker for every 10 they displace makes sense
Climb out of your import (Toy-onda-sson) and try to judge a car on it's merits, not how important you will appear to your peers. You will find that domestic cars are as good as any import if not better, and you'll support the home team.
BTW - I am educated w/ a BS, Masters, and certifications so please save your insults and NO desire to own a car from Asia or Europe
Posted by: rick | February 14, 2008 at 2:41 PM
Rick,
If you think foreign automakers locate in depressed areas and don't contribute, you should come to Ohio. The city of Marysville has been transformed from a sleepy farm town to a prosperous city. The whole central Ohio area has benefited immensely from the Honda plants. They employ 13,000 people here. Obviously that's not a knockdown assembly. >70% of the parts in Hondas are made in the US.
Since you already have a good education, you'll recall from your economics class that the average person experiences a net benefit from increased competition and efficiency. Productivity gains are the reason we get raises. So its a good sign if the companies that come in aren't employed the same number of people for an equal output. A few will suffer, yes, but that's capitalism. If you don't like it, you can always move to North Korea.
Let me also say that I love some of the new domestic cars coming out lately. The Cadillac CTS is awesome, as are the Chevy Malibu, Ford Fusion, and GM mid sized crossovers. Honestly though, it took GM getting kicked over and over for them to finally respond with amazing products. It was painful to watch, but they (and everyone) will be so much better going forward.
Posted by: Ben | February 14, 2008 at 8:27 PM
Happy Valentines Day, everyone! The V8 will survive, love it or hate it. It is an optimum configuration for smoothness because, in a 90-degree vee, primary imbalances cancel themselves out. With GM's cylinder deactivation (don't think V8-6-4) or Ford's Ecoboost, I believe a 2. something -liter V8 could achieve 150+bhp/liter smoothly and greenr'n Kermit. A 283 cid small block Chevy V8 Turbo Thrift 2bbl put out 195 hp at the crank. Many 2-liter turbo 4cyl's will make that kind of power and more efficiently; but which would you rather listen to? I mean, c'mon!
Posted by: fulcrumb | February 14, 2008 at 9:14 PM
Do you have any info about the VW Touran minivan?
Posted by: Fred | February 15, 2008 at 5:59 PM
The VW Touran is a Chrysler LLC job. Maybe the "milleniels" will buy it but it aint no Jerry Garcia sin bin.
Posted by: fulcrumb | February 15, 2008 at 8:30 PM
This is a silly comparison to the 1970s and early '80s, when so-called "industry observers" predicted the demise of the V-8. There was a widespread belief turbochargers would dominate the performance scene as it had in Europe, and turbos were offered with mainstream icons such as the Chevrolet Monte Carlo and the Ford Mustang. Still, despite the early surge in turbo development in the 1980s, it lost out in industrial preference and consumer taste to the small-block V-8.
This is not 1968. Unlike Detroit in the late '60s, which was given only hints and then harsh action immediately after, the upgraded CAFE regulations won't be put into effect until more than a decade from now. This does not mean the V-8 engine's downfall. VW and Saab are both the models for nothing in American industry, as both brands are struggling just to stay in the US market. The VW turbo two-liter engine is common as an engine more in standard because it's entry-level equipment, placed below a naturally aspirated V-6. For all the acclaim turbo engines have, Subaru's own Impreza WRX and STi have consistently ranked poorly in real-world fuel economy ratings, even next to a Ford Mustang GT with a 4.6 L V-8, and even more so with a Chevrolet Corvette.
I have read some half-minded articles hastily put up on Yahoo!, MSN, and news sites on the coming EPA guidelines, and the consumer trend moving against big power. The authors point to the higher sale of V-6 packages over the V-8. Let's be serious. Of course more people are going to spend $20,000 on a base package with a smaller, but reasonably powerful, engine over a $26,000 performance trim line. It's financial logic.
These vehicles, however, make only a small number compared to the SUVs, pickups, and sedans that will be affected by CAFE. Less weight and drag would be the logical steps in engineering, with or without the 2020 hike. If anything, this will mean a more focused performance group from each automaker. Instead of a mass-market Mustang targeting 160,000 units annually with a starting price of $19,000, you may see a Mustang with only a high-output V-8 priced at $30,000 and meant to sell at just 30,000 units annually. Instead of Ford making 52% of its annual sales from full-size trucks, it will likely make a much lesser number--perhaps 1/3 of that. The auto world has learned from the mistakes of the 1970s and what they caused to both labor and industry. That is why Congress permitted this long period for manufacturers to meet these heightened standards.
Posted by: Drew | February 17, 2008 at 3:11 PM
I drive a 2007 Dodge Ram with a Hemi. I get better highway gas mileage than most midsize SUV’s at 20MPG. This truck gets better gas mileage than my 2006 trailblazer with a V6. Furthermore, I get better gas mileage in both of my Corvettes and my Camaro. Which are both V8's and have more upgrades and power than you can shake a stick at. Go to a Chevy dealership and look at all of the midsize and full size Trucks, and SUV’s. You will find that the Corvette gets better highway gas mileage than almost all of the other models. The stereotype of a smaller motor means less fuel consumption is not always true. For an example, most small Trucks and SUV's with smaller motors get the same gas mileage as that of a full size Trucks and SUV's. Same gas mileage but, half of the vehicle. Point being, just because there is a decline in the production and demand of V8’s doesn’t mean it is due to gas mileage.
Posted by: NICK | February 19, 2008 at 9:38 AM
The way I see it is, if people need a large V8 truck for say, their work, then they will buy one. And say if a commuter needs something more full efficient for their daily commutes they'll probably opt for a hybrid, or some such. People will eventually have to choose between buying what they need over what they want.
With our questionable economy in the shape that it's in, most people will certainly find themselves in the 'what they need' bracket anyway.
Posted by: Richard B. | February 19, 2008 at 1:50 PM
I disagree. I think there's less vehicles on the road being offered with a V8, coupled with having cars offered with V8s too expensive for the average American to think of buying. The cheapest V8 offering is in a two door truck. The next cheapest offering of a V8 in a passenger car is the Impalla SS. With the demise of the Crown Vic and Town Car, V8s in affordable cars have dropped significantly. The newest crop of cross-over SUVs are only available with V6s.
It's not that Americans aren't buying V8s (sales of Mustang GT are proof, and upcoming muscle cars from Chevy and Dodge will also sell well). It's that manufacturers aren't offering them to us any more, and if they are offering V8s, they're in expensive models or low volume models that the average consumer isn't even aware of (Cadillac V).
Posted by: David K. | February 20, 2008 at 9:45 AM
Nick - of course your V8 Corvette will get better mileage than a large SUV with a V6. That may have something to do with the weight and aerodynamics!!
Compare apples to apples. A I4 Malibu vs a V6 Malibu and the I4 has better mileage - common sense.
V8's will survive, rightly so, for performance needs like the Corvette - you don`t need on in the Malibu.
Posted by: Guy Atherton | February 21, 2008 at 9:52 AM
Guy Atherton-My point was not to compare a Corvette to a large SUV with a V6. Obviously, that does not make much sense. My point was specifically not to compare “apples to apples”. As many people do not compare different engines in the same vehicle, but rather different engines in different vehicles. The point is to show that people often pick a vehicle out of a different class due to perceptions of fuel economy. These perceptions may not be true. Buying a Colorado with a V6 over a Silverado with V8, because of the idea that V6 will be more fuel efficient that the V8. The fact is that the Colorado does not get much better gas mileage than the Silverado. Point being, just because there is a decline in the production and demand of V8’s doesn’t mean it is due to gas mileage. Part of the issue is consumers’ perceptions of the V8. However, if you are comparing apples to apples, then I fully agree with your statement about the Malibu. Choosing I4 over a V6 does make perfect sense.
Posted by: Nick | February 22, 2008 at 7:41 AM
Guy Atherton-My point was not to compare a Corvette to a large SUV with a V6. Obviously, that does not make much sense. My point was specifically not to compare “apples to apples”. As many people do not compare different engines in the same vehicle, but rather different engines in different vehicles. The point is to show that people often pick a vehicle out of a different class due to perceptions of fuel economy. These perceptions may not be true. Buying a Colorado with a V6 over a Silverado with V8, because of the idea that V6 will be more fuel efficient that the V8. The fact is that the Colorado does not get much better gas mileage than the Silverado. Point being, just because there is a decline in the production and demand of V8’s doesn’t mean it is due to gas mileage. Part of the issue is consumers’ perceptions of the V8. However, if you are comparing apples to apples, then I fully agree with your statement about the Malibu. Choosing I4 over a V6 does make perfect sense.
Posted by: Nick | February 22, 2008 at 7:41 AM