Car Manufacturers. Were did they lose the plot? (Part 1)

I have recently had the misfortune of having the first and only car I ever bought new from a dealer, end up as a pile of worthless scrap. Remarkably, all that happened was a bearing through the block of the engine. As far as the rest of the car was concerned, it was in pristine condition. Well looked after and loved.

So the process of getting a replacement engine started. I was horrified to discover, that I'd have to pay more for the new engine, than I would be able to sell the car for; when it's in running condition. Even more shocking, was the fact that buying and fitting a reconditioned engine would cost about 3% less than I could sell it for... if it was in running condition.

With little choice I resigned myself to rely on public transport. while saving for a new car. This then, is where the real horror story begins.

After searching for almost 2 months I had to conclude, that the cheapest new car in the South African market, was the Nissan 1400 LDV. I spotted some for sale late 2007 in Durban Road Brackenfell (Western Cape). They were being sold, with a canopy, for just over 60,000 ZAR. To bad the theft and hijack rate on these cars make the insurance premiums unaffordable.

I find this shocking. How do people afford cars in this country?

After a bit of leg (finger) work, I found the answer. They DON'T!

Last month (25 May 2008), Business Report published an article indicating, that car manufacturers are beginning to practice temporary shut-downs at their plants. With the market in the condition it's in, I wouldn't be surprised if they start following the Eskom example of “rolling shut-downs”.

So, here I am. Looking for a car that fits my pocket. The next stop is the second-hand market. If you thought the new market was sick, you should see this. I'm not going to get into the detail, but some of the stunts these second-hand dealers pull are down right criminal. So the last resort... the private sale market.

Yes, I'm inclined to agree with those, that believe the private sale and purchase of cars is risky. But those in my position are left with little choice, and I'd argue that it's no more risky than purchasing from a second-hand dealer, if you are willing to educate yourself and do the leg-work.

The major benefit of doing a private purchase, is that you are forced to be far more aware of what can and probably will go wrong. Not only with the car, but also with the purchase process.

So, off we go and start looking at the private market.

Surf the net, search, dig. Look at prices, compare. Go out and look at a few cars on offer. Dig a little more, learn a few things about cars that you did not know. Join a forum, talk, explore and then you'll discover, that in many ways, restoring a classic is cheaper than buying a new car.

After doing exactly that, I have to conclude that restoring a banged up, rusted sixties VW Fastback would cost 30,000 ZAR. Include the cost of the purchase at 5,000 ZAR and you pay a total of 35,000 ZAR for what is effectively a seriously good second-hand car. Not only that, you manage to invest in something that will gain value.

When is the last time you bought a car that would gain in value?

Personally, I've never managed it, but the thing that bugs me the most is:
Why can I restore a classic, for less money than it would take to purchase an entry level vehicle?
Where did the ridiculous car prices come from?

But here is the real shocker, the thing that has me standing on my head.
I can buy a fully restored VW Beetle for as little as 15,000 ZAR! In all probability, it will last me longer than any modern car I can buy and at less than one sixth of the cost of an entry level vehicle.

What's up with that? Are there any car manufacturers that would care to comment?

Why does a Chevrolet Spark 0.8L weigh in at 65,900 ZAR (Car magazine of April 2008), and a fully restored Beetle with incredible sound system and seriously cool mags, weigh in at 20,000 ZAR?

I must admit, if you put the two next to each other and sell them at the same price, I'd much rather have the Beetle. It will last longer!

Admittedly, the Spark will be more comfortable, but I don't spend enough time in my car to justify accessories like air conditioning. Possibly a radio, but definitely not electric windows. Not that the Spark has all of these, but hey...

Sure, if you are a salesman, that spends half his day on the road, a nice comfortable, flashy car makes sense. But when you are commuting to work and back, you don't use half of the “cool” crap in your car.

Ask yourself, what do you use your car for?

Stay tuned for part 2 of this article :)

EDIT: Part 2 of this article can now be found here.


be reasonable to the car manufacturers

Just a few random pointers to throw in the pot (not in any specific order)

you seem to have estimated the repair costs of your car from a single point of departure...engine replacement. there are any number of alternatives to this, applying your own labour as opposed to a mechanic of sorts will effect the biggest saving, a hole on the engine block can always be repaired by even a second rate engineering works, and a second hand block although it might also need repairs is a good alternative. a workshop manual will go along way in assisting you on this job and for future reference.

your neibour is not a car manufacturer, he makes use of a lot of the alternatives that i mentioned above to put a vehicle of sorts together like a mechano set utilising the car manufacturers investment in engineering technology (for Free) and sells an end product that could well proof to be a typical frankenstein without any backup except his own hands. very dicy.

there are basically four resons why the car manufacturer keeps on developing new models.

increased pressures on the trusty internal combustion engine to produce more Kw while using an ever decreasing source of energy.
increasing demands for Advanced safety requirements and lgislation.
protection of our environment.
designing material that can readily be reused (recycled)
and last but not least mankind's passion and lust when the topic is motor vehicles.

your beetle although economical from afar is anything but economical measured against the standard as mentioned above to use your comparison. the little spark will outlast the beetle with the proper care modern materials are virtually indistrcutable by the elements, the little spark ustilises an engine with at least half the cylinder content of the beetle to provide the same if not better performance while using a smell of the petrol that the beetle uses to chuck along, the spark is far better equiped in construction, handling and padding to protect your live in the event of an accident. at also has much better lights braking system and space utilisation. and then it must be rememered that the beetle is a lusty poluter of our environment and air due to its inability to utilise the fuel effeciently.

if you choose to ignore everything mentioned so far, then simply blame the cost of cars on politics. take the little tata manufactured and sold in india for R20k in its basic format.

first the interior does not comply with the europian minimum safty specifications (Remember SA also subscribes to that) so before we can import it the poor indies must upgrade the interior safety specs...that is for your account.

then body joining specs and bumper overhang, again to be ugraded for you account

emission levels and noise control...sorry for your account again

tyre size again needs to be upgraded... for for your account

so after all this the little R20k Tata can be imported for say R40k now we have to pay the import duty and and taxes and there you have a car that started its lif for R20K in india ending up on the SA showroom floor for around R60K the authorities walk away with atleast R20k disgrace is it not.

that all without mentioning the costs to tata to establish dealerships maintain part levels and greasing corrupt politician palms. i bet you will agree that your kit car builder will easily catch the paperella fever in a week.

we as the consumer drive new design development with our natural human greedy attitudes of always competing for the newest always expecting the best and our throw away attitude even making fruitless debt to maintain it. and the car manufacturers they simply provide a means and an answer to our dreams.

Ahhhh..... The "20K" was

Ahhhh..... The "20K" was retail was it not "shop price" not factory price.....

As far as upgrades on that TATA dinky-toy:
I think is just imaginary “safety” features I mean c’mon what can you possibly stick in that door to protect you? (niks dude!)
Panel alignment er…. They want to sell it right?
Please, no BS, the price will not doule! The import duty, Motor Industry Development plan (MIDB) etc makes either space for these vehicles or maybe for this “full import” just against as it does not create jobs, where the factoryworkers sleep next to the line (Daimler) etc.
Still a Tazz actually cost R8500 odd off the factory line back when they still sold them & they cost just under R60000 (not long ago).
A ex-VW/Audi man once tried to convince me that:
A: They make a huge loss on the Golf 1 derivatives, right . . . . “because that gets you into the brand, when you buy a bigger vehicles you are more likely to buy VW again”
B: The pressing plates (for body panels) “wear out” and cost millions the remake.
I still don’t know if he was extremely DOF or he imagined I was.
You will just not make a sh*tload of little cars & lose money (see Tazz above). (Your strategy wil NEVER involve losing money, mabe you do a press release but no actual loss). The flippen press plates/moulds wear out… a few microns a year, maybe.
SA’s motor industry is very inflated and artificial.

Valid arguments.

All these are valid arguments, and it's not as if I did not consider them.

My cost estimate on the restoration of a classic was actually done with the price of a new engine included. Along with severe rework of body, suspension and interior.

All things being said, the point still remains: Car manufacturers are no longer manufacturing cars. They are manufacturing status symbols and fashion statements. The car manufacturing industry no longer resembles the sturdy reliable model our fathers had. It has morphed into something closer to the clothing industry, with the difference that I don't expect a shirt to last more than a few years. A car however, is an incredible fiscal commitment, and with the volumes being manufactured and sold in South Africa, the prices remain unjustifiable.