This week has been strange, with the government promoting the idea that both wood-panelled station wagons and Japanese-style kei cars could suddenly be sold in the United States. That’s strange. I don’t entirely know what to make of that, but if there’s sincerely going to be a change to the rules in order to allow small cars here, I have an idea of what companies should do.
The Morning Dump is sometimes here to point out the problems, but that’s easy, right? Today, I want to be solutions-oriented. I’m going to start with what the administration is saying, and what the issues might be with what they’re saying. But then I want to talk about some products that could make it here.
Then I’ll talk about Nissan and the usual troubles with Nissan, as well as the potential for tax cuts to get more people into dealerships next year.
You Can Already Sell Small Cars And Wagons In The United States
This was covered well earlier this week, but President Trump said that he’s going to guide Transportation Secretary Duffy to make it easier to sell small cars here. Then, in the video above (or here), Sec. Duffy told CNBC’s Phil LeBeau that station wagons could make a comeback in the United States.
“Listen, the auto industry is very competitive, right?” Duffy replied. “And by the way, if we bring prices down and we get newer cars on American roads, newer cars are way safer.”
“If you’re building a car, developing a car that Joe Biden or Pete Buttigieg wanted you to build, that’s different than market demand,” he continued. “This rule will actually allow you to bring back the 1970s station wagon. Maybe a little wood paneling on the side, Phil.
It’s both important that the government regulate and guide the car market due to its critical importance, and also, historically, a bit of a nightmare when it does. This is bipartisan, too, as NAFTA was an H.W. Bush idea that Clinton ran with, and Cash 4 Clunkers was an Obama-era provision.
What’s important to note is that automakers can build small cars and sell them here, and often do. The Ford Fiesta, the Honda Fit, the Chevy Spark, and on and on. They can also build wagons whenever they want, as happened with the RS6 Avant and BMW M5 Touring.
For me, this is confusing, and I can tell the commentariat is having the same kind of cognitive dissonance meltdown. Obviously, inflation is up, and the President likely came into office at least partially on the concept that Biden took egg.
This is weird for me because, on the one hand, I want wood-panelled wagons and Autozams. On the other hand, I know that there are crash safety standards and certain EPA rules that make it harder to sell small cars here; though, in general, all of this is surmountable.
The Detroit Free Press polled the major automakers, and basically none of them would commit to actually building a car like this:
When asked by the Detroit Free Press if the Dearborn-based automaker would actually consider building and selling such a vehicle in the United States, Ford spokesman Griffin Anderson sent this statement: “Nothing specific to share at this time, but as America’s largest auto producer — including F-Series, the best-selling vehicle in the U.S. for 43 years — we’re always looking for ways to give U.S. customers more choice and affordability in vehicles they love.”
GM spokeswoman Liz Winter said the Detroit-based automaker has a policy of not commenting on future products.
Stellantis spokeswoman Jodi Tinson emailed the following statement: “Stellantis is always looking for opportunities to adapt our product portfolio to meet our customers’ needs and give them the freedom to choose vehicles they want at prices they can afford.”
That’s not a “no” and Ford actually has the perfect car.
Ford Should Sell The Puma Here
This is a Ford Puma. It’s a Fiesta-based European Ford crossover built in Romania and sold in Europe. It is excellent. I drove one while I was in the UK a couple of years ago and adored it. You know who also adores this? Ford CEO Jim Farley, who said he wished it were for sale in the United States.
Now, here’s the trick to this. What the Trump White House wants is for these cars to be built in the United States, but it is actually not that big of a deal if they’re not, unless the rules are written in a specific way to keep them out of the country.
The Puma is built in the EU and therefore subject to a 15% tariff, plus some other potential tariffs for specific material content (which might be offset because Ford is also a local producer, but I’m not a Section 232 expert, so this will depend on a lot of factors that seem to change by the week). That’s not terrible, really? With the average transaction price above $50k right now, a cheap car is a cheap car, and there are always incentives and tax breaks to be had.
This is about a $28,000 car in Europe, but everything is more expensive in Europe except food, real estate, drugs, and healthcare. Could this be a sub-Bronco Sport car in the $22-25k range to compete with the Trax? That would be dope.
My wild theory here, after talking to some friends, is that Ford should just import the Puma and sell it here as a cheaper car. With the OBBB and the EPA rolling back CAFE penalties and goals, there’s likely to be less of a penalty. These are safe cars and not kei small, but still smaller than what we get.
Also, it’s good. It’s a good car. Plus, Puma is a cool name. I also think Nissan could make a deal with Dacia to bring the Duster here, and Volkswagen could start selling SEATs here. Let’s get creative! There are plenty of non-kei sized cars that would probably do well here as cheaper cars.
[Ed Note: I don’t see how the Puma is going to move the needle compared to current US offerings, but I do like it. -DT].
Nissan Needs A Friend
The history of Nissan is a history of partnerships that just didn’t quite work out, for whatever reason. An unequal structure between Nissan and Renault was the rotten foundation on which that partnership was built, and the whole thing crumbled when Nissan had Carlos Ghosn arrested. The Honda deal was going to be another case of Nissan being subservient, which Nissan seems unwilling to accept.
According to this Automotive News report, Nissan wants a partner, but it still has some conditions:
“Nissan is open for business with other automakers,” Nissan Americas product planning chief Ponz Pandikuthira told Automotive News at a media event here.
But the company has made one requirement clear in discussions with prospective mates: “It must be reciprocal. Somebody has something that we would like; we have something that they would like,” Pandikuthira said.
“We would not engage with a partner just to buy a vehicle, or platform, or piece of tech,” he continued. “That’s what makes it a long-term commitment instead of just a transaction.”
Besides some totally fine and semi-competitive EVs, Nissan also has big trucks and the Nissan Frontier. Who wants a truck?
Will Lower Tax Bills Spur The Car Market?
The economy vibes are kinda bad right now. No one knows what’s going to happen. I get the sense that a lot of people are just hanging onto mediocre jobs, and jobs are hanging on to mediocre employees until something gives (which explains my staying power).
A look at the Manheim Used Vehicle Value Index shows, well, things are just kinda stuck. Demand is there, but prices are a little high, so volume is ok but not great. Maybe something can fix that?
Here’s what Jeremy Robb, Interim Chief Economist at Cox Automotive, had to say:
“Like most metrics we track across the automotive landscape, wholesale prices dipped in October before showing modest improvement in November.
“As November progressed, both new and used retail sales lifted from October levels, and the longest government shutdown in history came to an end. While consumer sentiment remains subdued, early reads suggest confidence is recovering. We’re seeing good vehicle sales supported by lower APR rates, and price depreciation is trending back to normal, with values slightly higher than usual. We’re also only a month from January, when lower tax withholding rates will boost take-home pay. Once consumers feel that in their paychecks and realize their tax refunds could be substantially higher this year, we are expecting some tailwinds to hit the auto market.”
Whatever you feelings about the tax cuts, there are many consumers who will see at least modest tax savings in the near term. Will that be enough to offset tariffs? Will the increased in EVs coming off-lease lead to more people buying cheaper used electric cars?
For the sake of the economy and the deficit, it would be helpful if people took that money and bought more things.
What I’m Listening To While Writing TMD
David called me from the road the other day, and he was in a town he’d never heard of, near Sacramento. I asked him: “Is it Stockton?” I guessed this because that’s the home of the best band in history, aka Pavement. Here’s them performing “Unfair,” which is premised on the idea that SoCal sucks all the water and good stuff out of Northern California. Slinging nachos like you just don’t care.
The Big Question
If you could bring back one car from the 1970s what would it be?
Top shot: Ford
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