StoneBridge & K-Syran - Starry Night

By Peter M. DeLorenzo

Detroit. It’s the early days of 2019, and make no mistake about it, there’s a whole lot of fretting goin’ on. In the past year we’ve been inundated with prognosticators from both within and outside this business telling all of us how this Mobility Thing is going to be. The Shock Troops wielding their electric pitch forks are insisting that we all bow down to the inevitability of electrification, that to do otherwise would be tragic and mark us as being woefully out of touch. And they’re vying for our attention against the Autonomous Futurists, who want to turn transportation into an anonymous, pay-as-you-go Nirvana, a glistening homage to shallow uninvolvement as the Shiny Happy populace is shuttled about in a blissful stupor.

Both of these factions are absolutely insistent that they’re right, of course, and that our transportation future is sign, sealed and delivered as they’ve so specifically predicted. But reality – and consumer tastes – always have a way of getting in the way of iron-clad prognostications. People are funny that way; we tend to bristle when we’re dictated to by the faceless hordes insisting that “they” know what’s good for all concerned. 

Companies and Fan-Boy Factions who are making bets on The Future are trying to pave the way for their success by any means possible, from PR offensives (including incessant social media bleating and boasting) to doing anything in their power to turn their strategic decisions into self-fulfilling prophecies. I’m even seeing otherwise highly regarded pundits embarrassing themselves with the hoary “you’re just not hip enough to understand” chestnut, as if that will suffice as a convincing argument.

These flawed perspectives masking hidden agendas are about as transparent as the average Washington bureaucrat’s reason for being. They’re self-serving strategic decisions proffered in the guise of what’s good for “the people,” the country and the environment. But the reality, as you might imagine, is made up of a patchwork of gray areas that are the furthest thing away from being cut and dried.

It should be pointed out at this point that this frenzy is being driven by China, which is the largest automotive market in the world by far and which will continue to be long into the future, there’s just no getting around that fact. Our wants and needs as North American consumers have been playing second fiddle to the wants and needs of the Chinese auto market for years now, and this phenomenon will only increase going forward. It will affect what we drive, because our choices will become more and more constrained by the dictates of the Chinese market. Does any of this sound good, even on paper? No, not really, and the reality of this could get uglier by the year.

Take the VW Group, for instance. This global behemoth plans on churning out so many electric vehicles over the next five years that it’s hell-bent on being able to single-handedly move the market to electrification, whether we want it or not. VW will be offering a glittering array of BEVs from across its product spectrum – including show ponies from Porsche and Audi – all designed to entice consumers to adopt fully electric vehicles en masse. Will it work? Well, it’s a philosophy at least, but there are certainly no guarantees of any kind. Cost remains the fundamental issue with BEVs, and VW is counting on accelerated battery development and fresh advancements in electrified technology to help make its way to profitability over the course of its BEV push. Other car companies are getting on the BEV bandwagon as well, but VW’s commitment is massive and industry leading, if it all works out, of course.

As for the Autonomous Vehicle movement, it’s clear to me that for every alleged developmental milestone achieved by Waymo, GM, Daimler, Aptiv, Zoox, and the other assorted players in this space, the idea of AVs seems to take another step backward with the constituency that really matters: real live people. It seems that people aren’t really enamored with the idea of autonomous pods careening around our streets and highways. Who knew? Random attacks on Waymo AVs by the local citizenry in Arizona were expected by, well, no one, and it has brought an entire new dimension to the proceedings. 

It’s another reminder that these participating companies need to remove their collective heads from their, err, computers once in a while and realize that their visions of a mobility Nirvana – and don’t forget, untold profits – don’t necessarily coincide with the real world and the wants and needs of real people. 

Other pressing issues for 2019? How long is the American consumer’s insatiable love affair with trucks and SUVs going to continue? Two of this country’s automakers – GM and Ford – are rushing headlong to the day where they won’t be making cars at all, and the reality of the SUV and crossover fever in particular is that these vehicles lend themselves beautifully to an aging population that doesn’t want to fold themselves up into cars anymore.

But there’s another dimension to this “the good days are never going to end” movement – there always is – and that is that all of the SUV/crossover/truck makers are getting consumed by greed, and the average retail cost of these vehicles is accelerating wildly out of control. Does anyone actually believe that this upward trajectory in prices is going to end well? This just in: It doesn’t matter how cheap gas is, if people can’t afford the payments it’s easy to see that eventually a wall will be hit and hit hard.

Added to the hand-wringing that’s rampant at this time of year is the well-founded fear that the Detroit Auto Show next week is going to be a complete bust, a disaster with lingering negative effects. I used to say (half in jest) that the Detroit Auto Show was rapidly regressing back to becoming a regional auto show, only this is no joke now. When in past years Cobo Hall was once filled to the brim with gleaming sheet metal, this year vast swaths of darkness are expected on the show floor next week, simply because of the number of manufacturers who aren’t going to be there. The show organizers are being hard-pressed to muster even one full day of media press conferences, and there are two. 

The real danger in all of this, of course, is that if the consumers who hit the show are underwhelmed – and the chances for that are more than good – what are the show organizers going to do to promote the Big New Auto Show in June of 2020, which is a long eighteen months away? Will consumers even care, even in this auto company-dominated town? And, what manufacturers will be compelled to even come back, except for what’s left of the not-so-big three, and the Japanese and Korean auto stalwarts? That this will be a tough sell doesn’t even begin to cover it.

At this time of year everyone in this business is, if not wildly optimistic, at least fairly close to being giddy. The marketing ideas are all brilliant, the products are hot, the certainty of the myriad AV and BEV predictions are ironclad, and the sales of trucks, crossovers and SUVs will continue at a torrid pace indefinitely. The industry feels it dodged a bullet in 2018 because vehicles sales held up, and even though the glaring weaknesses in the market were big enough to drive a semi through, industry players are comfortable with running with that.

But this week’s headline is there for a reason – it paraphrases a memorable line by Hollywood screenwriter William Goldman, who was talking about the movie business. And not surprisingly, it’s a line that’s equally applicable to the automobile business.

For all of the unbridled boasts and sure things being bandied about at this time of year, just remember this: At this point nobody knows anything.

And that’s The High-Octane Truth for this week.