Why Americans Are Finally Buying Smaller Cars Again

Last night was a bit of a blur. There was the Cybercab liveblog. Stellantis shook up its own leadership, but kept Carlos Tavares around for a little bit longer. Toyota returned to F1. I drank what I thought was a peppermint tea but was actually a laxative tea. It was like we had the Morning Dump last night both figuratively and literally.

I’m not going to start with any of that. Instead, I’ll skip ahead to something that caught my eye earlier this week: a bit of a palette cleanser. Americans are buying smaller cars again at rates we haven’t seen in a while, which is good news. It’s almost an accident and one I hope automakers learn from.

Palette cleansed? OK, the Cybercab. Elon Musk usually pulls these things off, somehow, though the stock is selling off this morning. Did everyone just shrug? Is that what the morning after is like? While Musk was talking about a fully autonomous universe in California, his new friend former President Donald Trump was in Detroit saying he was going to block autonomous cars. What?

Honda has a new recall for… checks notes… my car.

We Can’t Have Cheap Chinese Cars Because We’re Just Barely Getting Cheap Small Cars Here

If you want to know the real reason why we can’t have Chinese cars it’s not because of national security reasons or that country’s lead in electric cars. It’s not about forced labor or IP theft. It’s has a lot to do with protecting autoworkers. It doesn’t matter if you think that’s a good or bad thing, it’s just a reality of concentrating these folks historically in states that have huge and disproportionate importance when it comes to electoral outcomes. Though, at some level, I think it feels right that we protect autoworkers.

Automakers know this. Automakers might be arguing against tariffs on Chinese cars in Europe, but they sure as hell aren’t making that argument here. After years of making expensive, big, heavy, inflated cars it’s almost like we forgot to make cheap cars.

The market as a whole is extremely mediocre this year sales-wise, and the two big exceptions are hybrids and smaller, affordable cars. This is what’s dragging down average transaction prices despite all other inflationary pressures according to Cox Automotive:

While the Mitsubishi Mirage was the only new vehicle in the U.S. still transacting for under $20,000 in September, the overall mix of small, more affordable vehicles has been elevated for much of 2024, which is helping hold down the new-vehicle ATP. Vehicles such as the Chevrolet Trax (ATP: $25,081), Toyota Corolla (ATP: $25,535), and Hyundai Elantra (ATP: $25,902) continue to sell at a strong pace.

[…]

“One reason transaction prices are lower in 2024 is that many buyers are choosing smaller, less expensive vehicles,” noted Cox Automotive Senior Economist Charlie Chesbrough. “The subcompact and compact SUV segments are outperforming the market this year, and by no coincidence, they’re also two of the lowest-priced product segments in the market.”

While smaller, more affordable vehicles are gaining market share in 2024, other segments are shrinking. Notably, the full-size pickup truck share is lower year over year in 2024.

Did you catch that last bit? Full-sized trucks are losing market share and smaller vehicles are gaining market share. Yeah, it’s a price thing, but it’s also a product thing. The Chevy Trax is a great vehicle. As is the Toyota Corolla. It’s plenty of car for most people and, while the Chevy Trax isn’t Geo Metro small, it’s small enough.

The mix of cars mentioned is interesting as the Trax is a Korean-built car sold by an American brand and the Hyundai Elantra is a Korean brand selling an American-built car. This pattern is basically true across the market as Ford sees huge sales from its relatively small Ford Maverick, Jeep’s old-as-Moses Compass saw a sales increase of 71% year-over-year.

Just. Build. Good. Affordable. Cars. This isn’t hard.

Tesla Stock Down 8% So Far This Morning, Uber Stock Up 8%

iRobot came out 20 years ago

science fiction vs reality#iRobot $TSLA #OptimusPrime pic.twitter.com/VR75darmYR

— Adidust.eth (@dustdust213) October 11, 2024

If you want to have the best read of how Musk’s “We, Robot” event last night went you can just compare Tesla’s stock (down about 8% so far today) with Uber’s stock (up about 8% so far today). If the market believed Musk’s vision for the future, which would make Uber obsolete, was real then you’d expect the opposite to happen.

Musk’s timelines for these things are much like my daughter’s timelines for getting to bed, full of the same hopeful promises and always annoyingly over-optimistic. Or, as one Bloomberg columnist put it this morning:

And yet, for all the futurism, so much of the night’s show felt like a rerun. The caveats about schedules and the next-yearism are virtually catchphrases at this point. Musk also played many of the old hits about robotaxis being far safer than humans; how passenger vehicles today sit idle most of the time; how people will be able to fall asleep and wake up at their destination in these things. Even the dancing Optimus robots, and Musk’s claim that everyone on Earth will ultimately own one, are not new anymore.

And from our old pal Patrick at InsideEVs:

From what I could see watching from afar, the We, Robot event had a joyous feel to it—Optimus robots walking through the crowd and making drinks, Tesla’s biggest fans and supporters going for Cybercab rides and Musk himself promising a coming “age of abundance” where “anyone will be able to have any products and services they want.”

Yet that wildly optimistic tone stood in stark contrast to Musk himself as of late, who’s become the doomsday preacher of the digital age after acquiring the social media platform Twitter and transforming it into the dark fountain of misinformation and hate speech that is X.

It’s weird that the theme of this was Isaac Asimov’s I, Robot or, more accurately, the Will Smith movie version. The CEO in that movie gets killed by his own creation and we decide, as a society, that really good robots are too advanced for us. One of the videos playing inside the little cabs giving their Disney World-esque rides around the WB Studio lot was Bladerunner 2049, where the ultimate bad guy is a tech CEO trying to sell a vision of the future. Musk seems to strike me as a guy who loves the visuals of sci-fi yet seems unable to internalize any of the warnings.

Former President Trump Comes To Detroit, Says He’s Going To Stop Autonomous Cars?

TRUMP: "Other countries produced auto-mo–bile and autonomous vehicles. Do you like autonomous? Does anybody like an autonomous vehicle? You know what that is, right?"

CROWD: *one person claps* pic.twitter.com/68y8nP5sIl

— Aaron Rupar (@atrupar) October 10, 2024

You have almost certainly already made up your mind about the election and nothing you’re going to read on a car blog is going to change that, nor is that our mission around here. But the former President speaking before business leaders in Detroit about the car industry is news.

It was, uh, interesting:

From Crain’s Detroit Business:

He promised a car industry “renaissance, the likes of which we have never seen before,” saying he intends that triumph “to be among my greatest legacies.”

He also said if Kamala Harris wins, “the whole country will end up being like Detroit” — a negative statement the vice president’s campaign quickly amplified on social media. He later pledged the city’s “rebirth” in a second term.

Does this mean that he’s supportive of bringing back Pontiac so it can finally produce the Pontiac G8 ST? That might be a winning issue around here. 

The most confusing bit, linked in this video here, is when former President Trump spoke about autonomous cars:

“Do you like autonomous? Does anybody like an autonomous vehicle? Know what that is? Right? When you see a car driving along? Some people do, I don’t know. A little concerning to me, but the autonomous vehicles we’re going to stop from operating”

I think what he’s saying is that he’s going to stop autonomous cars from other countries, though his speech has been harder to follow lately. He also added that he wanted to make interest from car loans tax deductible, which would “revolutionize” the industry.

Honda Recalling 1.7 Million Vehicles Over Worm Gear

It finally happened. I bought the Honda CR-V Hybrid mostly for life reasons, but also to have something to write about and now I do! It’s being recalled!

From the Detroit Free Press:

According to the NHTSA report, the recall stems from an improperly produced steering gearbox worm wheel, causing excessive internal friction in the vehicles. That friction can cause a feeling of “sticky feeling” when turning the steering wheel.

“Increased friction between the worm gear and worm wheel can increase steering effort and difficulty, increase the risk of crash or injury,” according to the NHTSA report.

Well, that’s not good. For the record, I haven’t noticed this issue as my car is quite new.

What I’m Listening To While Writing TMD

For all of my love of pop music and female pop vocalists, Christina Aguilera doesn’t usually pop up in my recommendations. The only reason I heard “Haunted Heart” is that she wrote this song for the Addams Family animated movie and it was on a Halloween mix. How did I not know this song? It goes almost too hard. Christine has pipes and bars.

The Big Question

Can Detroit beat the Guardians and make the ALCS to face the Yankees? Or, if you don’t like sportsball, are you going to watch the NASCAR Roval race this weekend? If you also don’t watch car racing, what are you doing this weekend?