Mike Savage New Canaan The Future of the Muscle Car
In the last few years, the US automakers have made a return to classic style muscle cars. These cars have been designed to look nostalgic and very similar to their early 1970s counterparts. Ford started this new trend with the new Mustang in 2005. With styling very reminiscent of the 60s Mustangs, the car was an instant hit. Ford had the market cornered since GM had discontinued the Camaro in 2002 and with Chrysler lacking a V8 rear wheel drive muscle car as well. In the last year, this has changed with the introduction of the new Challenger and then just recently, with the introduction of the new Camaro. Car enthusiasts are happy to see these cars back and the question becomes, how long will they last?
In the past three months, GM and Chrysler have both sought bankruptcy protection to help reduce debt and allow them to continue building cars. GM has sold off many of its brands including Saturn, Hummer and Saab. The federal government is now the primary shareholder in both companies. The government plans to put new management into place to change the lineup of cars both companies are producing to focus on small cars and less large engine cars and trucks. It will be interesting to see how consumers react to this change.
The area where American automakers have been most successful in the last 20 years has been trucks, SUVs, and coupes and sedans with larger engines. No muscle car enthusiast is going to want to replace his Mustang with a Honda Civic. Ford tried that in the late 70s with the Mustang II and it was a disaster.
To me, the heart and soul of the American auto industry lies in performance cars and trucks. This is where the American auto companies have been able to dominate the market. Honda, Nissan and Toyota have all released new full size trucks in the last five years and the sales of these vehicles still pale in comparison to the sales of the Silverado, Sierra and F150.
A year ago with gas prices at the highest they had ever been, industry analysts were criticizing American automakers for not having better offerings of small cars to compete with the Japanese and European automakers. I would have to agree with that sentiment. As much as the gas prices have changed over the last six or seven years, it seems as if American companies have tried to move away from small 4 cylinder cars and produce more V6 and V8 powered cars, which in hindsight was not the right decision. By doing this, they have allowed Toyota, Honda and others to gain more market share in a super competitive market. Both GM and Chrysler do need to present stronger offerings in these markets.
However, since gas prices dropped dramatically late in 2008, the sales of trucks and SUVs have risen substantially. Toyota, which had a very long wait to buy a Prius a year ago, cannot give those cars away even with huge incentives today. The point is clear: Americans want their big engine cars and trucks as long as gas is affordable. When gas rises, the market shifts towards smaller more fuel efficient cars.
At this point, it does not make sense for American car makers to make a dramatic shift away from the cars and trucks that have kept them alive in recent years into small cars that no one has proven they can sell. We know they can sell performance cars and trucks. Try going to a local dealer today to buy a Challenger or Camaro. Most dealers do not even have any and if they do, they will not be there for more than a day or two.
In light of everything that has happened in the car industry in the last year, it will be interesting to see what the future holds for the muscle car. Are we repeating the 1970s where high gas prices and emissions will help kill off the muscle car again? Or are we seeing a rebirth of the muscle car that will survive in light of the current economic condition? Only time will tell.
