Detroit Ignored Fuel Efficiency Demands, Says Ex-GM Economist

[wtmusic]

"For years - and years, and years -automakers in the U.S. insisted that their studies showed that Americans didn't value fuel economy and preferred those fuel-swilling (and profitable) SUVs and pickups over gas-sipping compacts.

But that's not so, says former General Motors economist Walter McManus, now a professor and head of the Automotive Analysis division of the Transportation Research Institute at the University of Michigan.

'The survey would estimate that people would estimate fuel economy fairly highly," said McManus. "Being a good economist, I said, "No, they don't," and I changed the results.'

And it wasn't just McManus. 'There was a systematic bias against such results," he said. "Our job was not to seek the truth, but to justify decisions that had already been made.'"

http://blogs.edmunds.com/greencaradvisor/2009/10/say-it-aint-so-detroit-ignored-fuel-efficiency-demands-says-ex-gm-economist-.html

[depakid]

1. Well, color me shocked. Shocked I tell you!

[JohnWxy]

5. "there's gambling going on in here?? I'm shocked!"

[TreasonousBastard]

2. The truth is in the buying, and trucks outsold cars...

with even those fuelsipping Japanese getting on the bandwagon and selling more Highlanders and Acuras than Priuses. Where's them stunning sales numbers for the Versa or Aveo? In any car that offers the option-- compare sales of the model with the four to the model with the six.

Historically, going back to the 60s, econoboxes got a boost when gas went up, then big iron went back to selling when people either got used to the price or it dropped. In cash for clunkers, how many traded in a big truck for a slightly smaller truck?

(Even the Japanese know that when it costs a handful of billions to design a new car that won't see the showroom for three years, you design a car that you think will cover the investment.)

[Kolesar]

4. The Toyota Echo and Honda Insight failed in the marketplace

Motorists buy something bigger if given the chance.

[wtmusic]

10. Over a million have coughed up 30% extra for a Prius over a Corolla. nt

[TreasonousBastard]

12. In ten years-- a little over 100,000 a year worldwide. n/t

[wtmusic]

14. That's correct - about 1/3 as many as the best-selling car in the world

Not too shabby.

[TreasonousBastard]

15. 'scoos me. 100,000 a year might be considered shabby...

http://blogs.cars.com/kickingtires/2009/01/the-top-10-best.html

The Top 10 Best-Selling Cars of 2008

Ford F-Series: 515,513
Chevy Silverado: 465,065
Toyota Camry: 436,617
Honda Accord: 372,789
Toyota Corolla: 351,007
Honda Civic: 339,289
Nissan Altima: 269,668
Chevy Impala: 265,840
Dodge Ram: 245,840
Honda CR-V: 197,279

And this is just US sales in a bad year.

Note how Camry outsells Corolla and Accord outsells Civic with none of the really efficient models, like Yaris, Versa, and Mini even making it to the list.

As I said, the US market likes big, or at least bigger, iron no matter what anyone would like to think.

[wtmusic]

18. Priuses sold 160,000 in 2008 (without the disingenuous averaging)

and Chevy sold fewer Silverados last year than they did in 1999 (maybe being out of touch is why GM went bankrupt, and Toyota is thriving).

Not to mention, since 1997 US buyers receive substantial tax breaks to buy vehicles over 6,000 lbs. What a coinky-dink: Ford's F-Series and the Silverado both weigh in at just over.

Think that may have something to do with Americans "liking" big iron?

[TreasonousBastard]

20. Toyota's showing losses lately, like everyone else, but they still sold...

a lot more Camrys than Priuses. And there's plenty of Highlanders and its Lexus twin around. Been some complaining from the cash fer clunkers people that the car they bought after the tradein is too small. And there's that constant argument about large being safer that all too many are buying into.

And those soccer moms who can't fit six kids into an Altima. Some can't even fit two in.

I am well aware of the tax breaks for trucks, but the accountant or lawyer needing accelerated depreciation would tend to get a Navigator or Escalade, not a pickup. Before the tax breaks, they might get a Cadillac or Mercedes, but never an econobox.

[depakid]

16. Tons of echos abroad

You're right in many respects though- Americans are BY FAR the most wasteful people on the planet- the biggest suckers for demand creation- and they will fall the fartherest and adapt the poorest of any nation on the planet.

[intheflow]

7. Did you ever watch "Who Killed The Electric Car"?

One of the "suspects" was automotive advertising: the ads they produced for the electric car were really pretty creepy and turned people off. I'd say the reverse goes for trucks and gas-guzzling cars. The automakers made those look far more glamorous and fun than sensible, fuel efficient cars, and the good little materialistic U.S. consumer drones marched in lockstep to buy what automakers wanted them to buy.

[TreasonousBastard]

13. Advertising does sell cars, and...

no car company is intersted in boosting sales of its loss leaders or less profitable models. And they have always sold sex, performance, and image.

Actually, no company selling anything is terribly interested in selling the cheapest and least profitable lines.

Even today, how many Toyota ads do you see for the Yaris? Hyundai Accent, Nissan Versa...

But, advertising aside, the fact remains that people tend to buy up when the have the chance.

[excess_3]

11. the goofy bumper laws killed the nice small cars

just my opinion

[excess_3]

3. the CAFE laws are the real problem

some people need a big car

(watch people at a grocery store parking lot)
there are old, or sick, or overfed people,
who need a big car.


the 15 mpg station wagon got replaced
by a 5 mpg SUV.
how does that help?

edit, adding.........
I used to work at a rent-a-car place.

I saw numerous people who
(were either big people, or arthritic looking. or both)
who tried to get into a Chevy Aveo or something like it,
(probably because we didn't have any mid-sizes available)
that did not fit, their head hit the roof,
the seat would not go far enough back, etc etc etc

[FiveGoodMen]

8. Your examples may be right, but they can hardly cover a substantial portion of the population

I could put on a lot of weight and still fit in my Civic.

No, this is about saying, "My car's bigger than your car!"

[wuvuj]

25. I sat, at least, in a Geo Metro...

...not a small person...had plenty of room.

[JohnWxy]

6. good post.

[UpInArms]

9. ... we knew it was that way you idiots

I grow weary of these liars hogging the megaphones

[One_Life_To_Give]

17. Pushing his latest "Study"

As has been pointed out by others here. The actual sales choices people have made imply something else. And it seems awfully arogant to conclude that

once the market offers a wider selection of more fuel-efficient vehicles, consumers will come to realize that they want them."

You claim that you were lying before, but Now we are supposed to believe you are telling the truth?
Think you will find people really want fuel economy. A really fuel efficient 300HP 4Sec 0-60, 6+ passenger, ultra quiet Sportscar/Luxury Sedan/All Wheel Drive vehical othat gets atleast 45MPG, Costs only $25,000 and can be sold after 5 years for $24,000.

[wtmusic]

19. What's the incentive to "push" this POV?

Before he was paid to ignore the truth.

[One_Life_To_Give]

21. CITI Bank funded the project

A Growing Auto Investor Issue, 2012-2020
 What’s New? — In partnership with Ceres and the Investor Network on Climate
Risk, we, along with industry experts at the Planning Edge, University of Michigan
Transportation Research Institute, and NRDC, evaluated potential changes to the
U.S. Corporate Average Fuel Economy (CAFE) program.

Lets see what makes sense about his Bio and releasing the info now?
Left GM in 98 to go to Textron.
9 months at Textron and then went to J.D. Power
till 2005 and been at the university since then. So now that a CITI Bank study he led looks to interest investors he talks about what data he choose to ignor over ten years ago. Sure makes perfect sense. /sarc

[kristopher]

22. And that explains your bizarre claim how?

I'm not sure what you and others are criticizing about this study.
The automakers were working with a mindset that said any surveys which contracted their world view flawed. Since they considered themselves to be the ultimate experts, they disregarded as flawed any evidence contrary to their established beliefs.

This is a version of the genius trap and it is not a valid reason to disparage what the OP is about. The question is simple - were the automakers (for whatever reason) wrong about the importance of fuel efficiency to US consumers.

My belief is that, yes, they were wrong.

Apparently you disagree to the point that you think McManus, now a member of the academic community, is willing to not only lie about it, but to call his own judgment into question in order to lie about it.

That is a fucking bizarre belief.

[One_Life_To_Give]

24. Don't think he was lying then or now

Just choosing his words carefully to project the desired view.
One would of thought from the way it was worded in the article that he essentially Lied to his superiors for over nine years.

Technically he reports that Surveys indicated that Fuel Economy was important. But it's doesn't indicate where it ranked, presumably not either first or second as that would of been newsworthy in the context of the article. And when we look for supporting evidence of his views that people would want more fuel efficient cars if presumably not just the current crop of fuel efficient models were available but a larger variety of similar fuel efficient models were available seems to me beyond reason. To assume that if 6 models gave 45 MPG instead of 1 that somehow people would suddenly decide thats what they need to drive. IIRC The F Series Pickup from FORD has been the number 1 model for decades despite anything GM, Honda, Toyota etc could do. The Festiva and Pinto are long gone.

[wtmusic]

23. Fair enough.

from the study:

"OTHER DISCLOSURES
Citigroup Global Markets Inc. and/or its affiliates has a significant financial interest in relation to BorgWarner, Inc., DaimlerChrysler AG, Ford, General Motors, Johnson
Controls Inc., Magna International Inc and Nissan Motor. (For an explanation of the determination of significant financial interest, please refer to the policy for managing
conflicts of interest which can be found at www.citigroupgeo.com.)"

There could be conflicts, although he's pretty hard on American automakers in general. Also, because Citigroup is acting as a brokerage here their advice not only tightly regulated by the SEC but any blatant conflict opens them up to a class-action lawsuit.