You'd think that humans, being the dominant species of this planet, are quick to learn, but that's not really the case. Research has shown that infants from other species like chimps, rabbits and dogs learn behaviors much faster than our cute but defenseless little babies.
It's not just the babies though, as adults can be just as hard-headed. In 2000, many people lost everything they owned in the so-called Dot-com bubble where Amazon.com or eBay stocks practically went to being worth nothing. And yet about a decade later, we had another stock market collapse, this time related to the banking industry. Such incidents can be traced back throughout human history. For example, Holland witnessed a mania-like phenomenon where tulip bulbs were much more expensive than gold in the sixteen-hundreds.
My point is that all of us have it in our nature to go big or go home, to make that big deal that will give us a lifestyle of money. Car companies, which are run by ambitious executives, tend to be the same, chasing new market segments like hounds on a fox hound.
The best example of this is the SUV. Every major car company announced huge billion-dollar investment plans to expand their offroader lineup. They are literally dumping all their development money into one niche and in some cases ignoring all the rest. I think this is a mistake, another Dot-com bubble about to burst.
Over my somewhat young journalistic carrier, I've driven SUVs from every niche, from simple crossovers like the Dacia Duster to expensive SUVs like the Porsche Cayenne. Some of them were decent, but there were a few that seemed to make all the compromises without any benefits.
So I find it hard to believe that every car buyer secretly wants an SUV, just because there are a few potholes in his town. Yes, I would like a Cayenne instead of a Golf, but would I actually buy one? Of course not! The market is based on analysis that could prove to be wrong, just like it was during the sub-prime crisis in 2008. The car companies are paying for the studies, so it's only natural that they're being told what they want. But sooner or later, the bubble is going to burst and I wouldn't want to work for the company that makes all the wrong cars.
One example of this would be Suzuki or Mitsubishi. Both have focused too hard on launching crossovers to the detriment of famous models like the Swift supermini or Lancer sedan. Another one would be Volkswagen USA, which instead of replacing the Jetta and Passat with something sexy are developing 7-seat crossovers.
Mazda on the other hand are doing things the right way and their US sales are showing this. Without the backing of a huge corporation, they have exactly the right models they need right now: a good mid-size sedan (Mazda6), a good compact (Mazda3), two SUVs and a cheap halo car that people can aspire to own (MX-5).
There are companies like Fiat or Suzuki that are stuck with models that lose money. Their CEOs are probably looking at the near 20% profit margin of an average Cayenne and imagining that if they launch a Macan rival instead of a new Linea, everything will be peachy-great.
SUVs will always be a stable part of the automotive diet, but as more and more companies offer them, profit margins will become smaller and smaller, just like Apple's stronghold on the smartphone market diminished with time. SUV market crash? No, more like a reality check.
My point is that all of us have it in our nature to go big or go home, to make that big deal that will give us a lifestyle of money. Car companies, which are run by ambitious executives, tend to be the same, chasing new market segments like hounds on a fox hound.
The best example of this is the SUV. Every major car company announced huge billion-dollar investment plans to expand their offroader lineup. They are literally dumping all their development money into one niche and in some cases ignoring all the rest. I think this is a mistake, another Dot-com bubble about to burst.
Are you crazy? SUVs are awesome!
Maybe they are, but believing demand will keep increasing 10% every year forever is as stupid as believing a tech company that never made profits is worth billions.Over my somewhat young journalistic carrier, I've driven SUVs from every niche, from simple crossovers like the Dacia Duster to expensive SUVs like the Porsche Cayenne. Some of them were decent, but there were a few that seemed to make all the compromises without any benefits.
So I find it hard to believe that every car buyer secretly wants an SUV, just because there are a few potholes in his town. Yes, I would like a Cayenne instead of a Golf, but would I actually buy one? Of course not! The market is based on analysis that could prove to be wrong, just like it was during the sub-prime crisis in 2008. The car companies are paying for the studies, so it's only natural that they're being told what they want. But sooner or later, the bubble is going to burst and I wouldn't want to work for the company that makes all the wrong cars.
One example of this would be Suzuki or Mitsubishi. Both have focused too hard on launching crossovers to the detriment of famous models like the Swift supermini or Lancer sedan. Another one would be Volkswagen USA, which instead of replacing the Jetta and Passat with something sexy are developing 7-seat crossovers.
Mazda on the other hand are doing things the right way and their US sales are showing this. Without the backing of a huge corporation, they have exactly the right models they need right now: a good mid-size sedan (Mazda6), a good compact (Mazda3), two SUVs and a cheap halo car that people can aspire to own (MX-5).
Does that make SUVs a soon-to-be-extinct species? No, of course not!
They have their uses and will continue to offer great alternatives for people who would otherwise own minivans. Amazon and eBay didn't go extinct during the Dot-com bust, but a few smaller companies did, which is exactly what will happen with the auto industry.There are companies like Fiat or Suzuki that are stuck with models that lose money. Their CEOs are probably looking at the near 20% profit margin of an average Cayenne and imagining that if they launch a Macan rival instead of a new Linea, everything will be peachy-great.
SUVs will always be a stable part of the automotive diet, but as more and more companies offer them, profit margins will become smaller and smaller, just like Apple's stronghold on the smartphone market diminished with time. SUV market crash? No, more like a reality check.
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