By Jon Croft
I’ve been a gearhead my whole life. Not by choice, mind you, but by necessity. Not coming from money, I had to make do with every bucket of bolts with wheels I could afford to fix and get me to my job. They were always used and cheap – but repairable. I kept out of debt and socked away whatever bucks I could. I had my eye on a house.
Growing up in New Jersey gets you wise to the ways of cars real early.
In the 70’s, American cars were junk. Absolute sheit. Anybody who started driving during those years inevitably adjusted to buying foreign cars whether they wanted to or not. Now these same people are older now and harbor well-earned prejudices against GM and Ford products. They favor Toyota and Honda – and Hyundai – for the time being. At least until Chinese car manufacturers start kicking these stalwarts out of the way. It’s coming as sure as the sunrise.
Stellantis (Chrysler-Jeep) is fraudulent pump and dump scheme – poor quality cars, high prices, parts unavailability, endless recalls and service issues. Jeeps are a joke: the automotive equivalent of Three-Card-Monte. RAM trucks have endless reliability problems – and 85K plus price tags. Stellantis is owned by FIAT – which is barely profitable in Europe and South America but circling the drain in North America. Like the Volkswagen Group, without massive government subsidies and debt guarantees, they are dead men walking.
Car-buyers in America today are regularly raped by carmakers (Foreign and Domestic) passing off horrifically overpriced, plastic-fantastic, mediocre money-pits on wheels. Cars that are over-computerized, sub-par quality, super-delicate, temperamental sheitboxes that all look the same and offer abysmal reliability. Zero value for the dollar. German cars are the worst – expensive to buy, expensive to own and impossible to maintain.
And now Honda, Nissan and Mitsubishi are going to tie the knot. They say they’re going to “Partner”. Partner is a “Press-Release” euphemism – official bullsheit sugar coating. Translation: Honda has been read the riot act by the Japanese Government: “You’re in charge. Take over and make this work. Japanese jobs are at stake. Japanese prestige is at stake. “
Nissan’s management publicly declared months ago that they’ve got – maybe – less than a year’s worth of financial viability until they run out of cash. They’re broke. Mitsubishi’s been looking for a white knight to rescue it for years – but nobody wants it. The company’s on life support.
Why does Honda want this deal? They probably don’t. Japan’s “Powers that Be” have decreed that these companies will all join forces under Honda’s aegis. It’s political. But the fly in the ointment is this: these three car companies don’t have any Electric Vehicles (EVs) for sale right now or in the pipeline. They have precious few Hybrids. Honda is an Internal Combustion Engine (ICE) car company – as is Nissan and Mitsubishi.
And don’t look now – BUT here comes China! Churning out cheap, well-made, affordable EVs by the boatload, licking their chops. Just waiting to break into the USA, European and other Asian Markets.
If a merged Honda-Nissan-Mitsubishi entity continues doing business as usual, they’re all going to wind up bankrupt. Forcing two basket cases (Nissan & Mitsubishi) into a marriage with marginally profitable Honda is going to sink Honda – whose EV footprint is virtually non-existent. EVs are the future – Hybrids are the bridge to get us there. ICE tech is yesterdays’ news.
What advice can a car-congested location like New Jersey pass along to a merged Honda-Nissan-Mitsubishi (HNM)?
Here goes.
The USA infrastructure is set up for gasoline. Gas stations, petroleum industry, drilling, etc. It will be decades before EV chargers are as numerous as gas pumps are today. Ever see EVs charging? It’s expensive and painful. Ever search for an EV charging station in the middle of the night when your charge warning light is glowing red? If you’re in the boonies – forget it.
The EV infrastructure in most of the USA sucks. California is better – but it’s the exception rather than the rule. New Jersey is moving forward at a creep.
For at least the next decade, Internal Combustion Engines (ICE) are going to rule the roost.
Bottom line: If ICE vehicles are what people have to have – give it to them.
Think about this:
In 2012 a Honda Accord (LX Sedan) cost $23,050; in 2012 a Honda Civic (DX Coupe) cost $17,345; in 2009 a Honda Civic (DX Coupe) cost $16,000; in 2008 a Mitsubishi pickup (Raider) cost $20,490.
These are but a few examples of BASIC vehicles (some “stick shift”), that people bought by the hundreds and hundreds of thousands to get to work, get here and there and make ends meet. Small cars. Cars that were affordable that you didn’t have to take out a Mortgage to afford.
These days people don’t want to lay out $75,000 cash (or commit to a Note) to get a vehicle. They need a car to get them from point “A” to point “B” – usually to work or to get their kids to school. Fundamental, basic transportation. They don’t even “need” four-wheel drive. We did without it growing up. Boohoo. Build a simple car.
Honda, Nissan and Mitsubishi have data bases and file cabinets filled with blueprints for cars they’ve already researched, developed, perfected and sold. They own the dies and jigs. They own all the tooling. These cars are known quantities that require little further R&D or tinkering. They are pure profit on four wheels. And some of these “old” models are still cool and very saleable.
The engines of these cars are already certified by the EPA for emission standards – or can be updated with minimal outlay. If the standards have changed that drastically, HNM can use a more recent generation motor. But the basic car itself is like a widget ready to be stamped out by the millions and sold at a buyer-friendly price. There is real demand for this.
People need low-cost cars to get to work or wherever else they need to go. The elongated, stretched, luxuriated and gentrified 2025 version of the Honda Civic or the Nissan Versa isn’t necessary. There’s no need to dump tons of money into “upgrading” these ICE cars every year any longer. Sell them – and older models – as long as you can for cash flow. If HNM can sell a car they’ve put virtually no R&D costs into, no tooling costs, no new stampings costs – and keep BASIC electronics, a BASIC OBDII system, and BASIC accoutrements HNM will scream “Winner, winner, chicken dinner” all the way to the bank.
If you can sell some of these older, dependable designs for $20,000 a pop to people who desperately need transportation and can’t handle a $75K cash or financing option – why not?
Sell quantity – and solid basic quality. Sell a sheitload of proven designs and build up cash to spend on refining your EV model. That’s my gameplan: put ALL your efforts and assets into the EV future – and use the old, reliable designs that you can pump out in volume to bankroll your escape plan.
I owned a 2009 Civic. I bought it used and sold it with 300,000 plus miles on the engine. One of the best cars ever. Did my own oil changes and brake pad swaps. My neighbor had a 2011 Accord with close to 400,000 miles on its clock. My friend had a 2008 Mitsubishi truck – his son in Colorado is still driving it today.
These were great designs. Bulletproof designs. Basic, long-lived cars that got people like me where we had to go without bankrupting us. The “High End” market isn’t the only place a manufacturer can make a profit.
Why can’t HNM resurrect some of these vehicles, push them out by the thousands and reap pure profit with minimal investment? Then they can concentrate their engineering attentions on an EV design that can save their bacon. Use the designs that are already amortized – old and new – to churn cash and finance a battle plan for EVs.
Yes, I’m sure people in 2025 want fancy cars. But demand is strong for basic transportation at reasonable cost – cars that people need to get to work, school and other commitments. Basic can be profitable. Three-quarters of the electronic sheit you have in a car today is unnecessary! I don’t need a Goddamn back up camera or sensors in my tires to tell me they’re going flat. And I don’t want an electronic ass-wiper in my front seat. Think 1965 Volkswagen. That’s all I need. Old school.
The USA is locked into a petroleum infrastructure for the time being. HNM should tap their treasure troves full of proven, dependable and reliable engines and body styles to give people what they need in volume at prices that will crush the competition – and provide seed money for a “Manhattan Project” EV program going forward.
I, for one, wouldn’t mind shifting gears in a new “old” Honda Civic again. Hell, I’d even dig window cranks and an AM/FM radio with knobs.
Question Everything.
Copyright, 2024 Jon Croft
Email: vlchek1@gmail.com
