Gas prices bring auto makers to their senses

Alfa Romeo Mi.To

Finally. Finally. It took gas prices reaching the dreaded four-dollar-a-gallon mark to make North American auto manufacturers realize…realize what? That we North Americans will only buy things we really don’t need as long as we can still afford them? You know, maybe the auto makers aren’t totally to blame for the mess a lot of drivers have found themselves in these days—like the “should we eat or fill the tank today” dilemma facing many owners of big, fat, gas-guzzling cars, trucks, and SUVs. Vehicles not bought out of need but out of the “me too!” mentality that North American advertisers have brainwashed many of us into. Ford, GM, and Chrysler only build F-150s, Silverados, and Rams—and Expeditions, Suburbans, and Durangos—because people buy them. Or at least they did up until a couple of months ago.

Ford recently announced that they’re “accelerating their transformation plan,” or to put it another way, they’ve “seen the enemy and it’s our product line.” Three truck and SUV plants are being converted to small car production. Ford will soon offer the European Transit, a small, multipurpose van; the European Fiesta and Focus (a vast improvement over the North American version) compacts; even Mercury will get a new, small car in 2010 (assuming the brand survives that long). It’s amazing how an $8.7 billion loss for the quarter can make you stop and rethink what you’re doing.

It was more of the same at General Motors. Four truck and SUV plants are closing, which build Trailblazers, Envoys, Tahoes, Suburbans, and Yukons. A few more plants are being watched closely, and will also go down if things don’t improve. GM may even sell off Hummer, whose sales are down—no surprise—but they may also be thinking of getting rid of the brand because it just gives off such negative vibes in this age of “green this” and “green that.” The only thing green about Hummer is the color of the money GM and its dealerships are losing daily. Once the electric Chevy Volt hits the showrooms in 2010, things may begin to look up for the General. Unless of course, the Volt’s $40,000 price tag scares off Mr. and Mrs. Average American Car Buyer. You think?

Things may be even more dismal at Chrysler. Their financial state was more fragile to begin with after the sell-off by Daimler. Their new minivans aren’t selling as well as they need to, and they’re readying a new version of the Ram pickup for introduction in the fall. Talk about bad timing. The minivans and pickups account for up to two-thirds of Chrysler’s sales—which I guess doesn’t say much for their car lines. Being a privately held company, Chrysler doesn’t report earning or losses, but I don’t imagine it’s exactly party time in Auburn Hills these days.

While all of this is going on, we here in North America are missing out on some absolutely fantastic small cars which the Europeans are going mad over. The new Fiat 500 was named the European Car-of-the-Year. Hot on its heels is the recently introduced, and similarly sized Alfa Romeo Mi.To (an unfortunate use of punctuation in the middle of a name)—both cars are smaller than a MINI Cooper. Volkswagen offers the similarly-sized Polo (which a VW executive was recently quoted as saying maybe it’s time to import to the US), and the aforementioned Ford Fiesta should be here in a couple of years.

In the meantime, there’s not much we can do but suck it up and carry on.

In my next column: the 2008 ZENN (Zero Emissions No Noise) electric car.