Yes Dan. The hybrid cycle is upon us today. Right now. I don't think there will be a single gas only engine plant operating in the US by Monday next. There might be but I think you see my point.
Not with gas at $4.00 per gallon they won't or at least not for long or in significant numbers.
Four year old stuff. It takes about that long and it current generation stuff. The generation after that, which is what's in development and testing today, is what poeple will really put their money into because it won't be transitional.
Same difference. A transition to hybrids and then all electric is one thing. There isn't the time or energy to revamp our energy infrastructure completely more than once. What is realy bizarre is the willingness to incur ill will among an established customer base that has their own fueling stsaions. CNG's are a fleet vehicle Dan and I guess I can only conclude that it's been decided that CNG isn't significant as an interim solution. OOPS!
"John R. Carroll" wrote in news:I4cLl.17337$8 snipped-for-privacy@flpi147.ffdc.sbc.com:
Actually John, the next step is GDI or TGDI. These are already either in production or in testing and development. (Gasoline Direct Injection or Turbo Gasoline Direct Injection). These engines are 20% or better more efficient than today's gasoline engines. Part of the efficiency comes from the greatly increased compression ratios allowed by GDI on pump gas. This has been a goal of engine designers for a long time, but the injector technology wasn't there to allow reliable production. It is now. Both Bosch and Siemens have dead-reliable GDI injector systems now. By injecting fuel directly into the combustion chamber (aka like a diesel), you get a major cooling effect as the fuel evaporates. This allows compression ratios of 12:1 or higher on regular unleaded fuel without denotation. This efficiency increase allows a downsized engine for the same KW output, resulting in a major fuel savings over the life of the vehicle. You will soon see 2.0L engines with >300 hp as a normal "base" engine, 1.5L engines with >200 hp. Plenty of power to please your right foot when you want to, while miserly sipping fuel for 80% of the time it's running.
These engines will sport completely variable valve trains, variable intake tracts, variable output turbo chargers and other features that will make you think you are running a large V6 or even a V8, while only having 2.0L and 4 cylinders under the hood.
Yeah, Audi (?) has been racimg a single rail diesel for a while now. Pretty inpressive.
You left out something Anthony. These things cost an arm and a leg and when they break you can't afford to have them fixed. It makes more sense to scrap them out. I'll bet the only thing imported will be $70,000 roadsters from Porsche/Audi and Mercedes. The warranty costs alone on these vehicles will have to start at $10K per vehicle if the warranty lasts any meaningful length of time.
This is one of the other difficulties I see with the model that North American builders and others are running for this market. When I was a kid, a new Corvette cost about what a journeman tool and die maker made in 520 hours. The new, at that time, Nova SS was 500 hours of what two year apprentices were making. Auto loans were limited to three year terms. Either car was lucky to last more than 100K miles without serious mechanical surgery and they were showing significant signs of wear at 60K.
Today, those same vehicles, the Vette anyway, costs about 3390 hours for a ZR1 or 2000 hours for the base model. This is an extreme example. You can buy a Camry for 700 hours (220 for the apprentice) and it will last 250K miles without breaking the bank but the costs of keeping a roof over ones head have skyrocketed from 400 hours of labor per year all the way to about 800 or more.
The future of the Auto industry will follow what the markets dictate. The largest market today, and the ones that will be growing both sustainably and significantly, are in India and China, not North America. The Chinese have a
40 percent sales tax on passenger vehicles that they are waving if you buy either a hybrid or all electric. Autogas is as dead as a post. The other advantage of getting the hell away from oil and on to renewable resource energy is price stability. The last 40 years of oil prices have been a real roller coaster that has impacted every aspect of life in America and around the world. What sane person would want to continue to subject their economy or livfe to that going forward when there is a viable and affordable alternative? This might well be the biggest driver.
I'm hearing about real changes to Americas auto safety standards in the works. You can't bring small cars into the US or even build them here today because the can't be made to meet current safety test standards affordably, or in some cases, at all. Our regulations are dictated by 3000 lb vehicles with enough air space to crush. We need to look at a 1500 lb model and I believe we will.
Should domestic builders not be able to bring an all electric 1500 lb four passenger vehicle to market for under $15K they will be run out of business on a rail by the manufacturers that can, and are, doing so in their own domestic markets today.
I'm sure somebody is out there making pistons and valve trains for the vehicles you described. They won't amount to more than a flash in the pan and a large investment with a pretty meager and short lived payoff. Ten years from now somebody is going to look back and wish all of that engineering had been invested elsewhere. In the time it takes for the worlds economies to recover this technology will have become obsolete, never having fulfilled its promise.
"John R. Carroll" wrote in news:JMlLl.17380$8 snipped-for-privacy@flpi147.ffdc.sbc.com:
GDI engines are on the road today. Moreso in Europe and Australia than the US, but many models are imported to the US now. All of the US automakers either are now or are almost in production with GDI engines. Many of the Japanese have them already, or are about to. This engine technology will be the dominant force for the next 10 years or so. There are too many problems with electric vehicles right now, although the investment is being made, the technology isn't there yet. It will be at a minimum 10 years before electric or other alternative vehicles will be mainstream.
I didn't know that anyone was building and selling a 350 bhp 2.0 liter aito engine Anthony. Who is it?
As for "All of the US automakers either are now or are almost in production with GDI engines. Many of the Japanese have them already, or are about to. "
Let's take a breath and do some math. Current landed and domestic passenger auto inventory in the US is currently between five and six million units. You'd think it would be easy to nail this down but folks aren't honestly reporting their numbers these days. It's come down to what the meaning of "is" or in this case "inventory usold" is. LOL
The same sort of Voodoo is going on with actual and projected sales. The consensus number for North America seems to be between 10 and 11 million units projected for 2009, two million of those have been built and aren't showing up in inventory but if you look at reported sales figures, there are about 1.2 million floating around somewhere. BTW, I think all of this mystery is related to the grooming going on to put the proper complexion on the market by GM and Chrysler as well, to some lesser extent, by the others, and sales for the year will come in at about nine million units. A death knell, in other words.
Let's now have a look at the employment/customer side of the equation. Between now and the end of June, the US economy alone will shed another two million jobs which will bring the total reduction of the work force for 2009 in at a loss of 4.4 million or perhaps even five or six million.
I doubt, under these circumstances, that there is room for additional production beyond about two million additional vehicles to fill the balance of the demand in 2009. That future production you menioned, which BTW is most of it, will never be built.
Ford, GM, Chrysler, Toyota, Honda, Hyundai, Audi, Volkswagen, and all of the rest are going to be fighting over so few units that they will be able to pat themselves on the back if they only lose their ass in 2009. This is why I don't think either Chrysler or GM will emerge from bankruptcy. They can't present a credible plan to get them through what I believe will be a three year run of six to eight million unit years. The government won't be able to come to the American public with a three year plan. Folks won't stand for it for an instant.
So here we are, and if you entertain the notion that the North American market for passenger vehicles if dead until 2012, what you have to do is get ready for 2013, which means tossing your existing product out and focusing on what the future will look like from 2015 or so on and preparing to build those as quickly and as well as you can. Under ordinary circumstances your ten year theory is entirely plausible. Given current realities and recognizing honestly what the industry will have to work with for the next five years yields a very different result. A high tech buggy whip would have been great eight or ten years ago and IIRC, Volkswagen had the stuff you are talking about then. Five years from now the buggy whip market will be dissapearing or have largely dissapeared, and there will not be a legacy foot hold because nobody is going to buy thing ONE for the nest three or so years. Absent any momentum TDI and the rest will just die on the vine.
Like I said, what you are talking about is as likely to be promise unfilled because it was overtaken by events. Things could be worse, and they might be. A wave of modest social unrest that wasn't much in North America might unfold around the world due to the consequences of the economic downturn. That would add significantly to everyones problems.
I'll bet the Germans and Japanese see things about like this when they aren't kidding themselves and the Korean's came right out a couple months ago with a pretty similar vision. Sometimes it takes relity a while to catch up with perceptions and attitudes Anthony. Especially when things change as rapidly and significantly as they recently have. Just ask Murphy if you think I'm kidding or wrong about that.
"As for the "missing" inventory, some of it (tens of thousands of vehicles) are squirreled away on parking lots in California with no buyers in sight....with the depreciation ticking away."
No, those are easy to count, and there is a total of nearly three million of them parked all around the ports. Importers have been leasing every square inch of space they can in the Long Beach Port/Los Angeles Basin area for eight months. I've heard of similar behavior around the port at San Fransisco and that there are 50,000 cars out near Tracy somewhere. There are also a couploe of airplane grave yards here. One of them is covered bumper to bumper with unsold Beamers, another Lexus's. Mercedes was just shipping their arriving inventory to dealers for a while but they have now sropped that practice. I don't know where the Mercedes bone yard is but there is one, I saw a news report an hour ago that showed a runday full of shiny new Mercedes. Looked like the Palmdale area. I wanted to photograph the landscape from the middle of the bridge to Terminal Island last December but didn't do it.
That's one of the attitudes that got this economy into this mess. People were ignoring the fact that that only works over the very long run, as in decades. In the short run, it can go either way.
The United States has a significant problem just getting [and keeping] their head out of their a$$.
While I do not agree that a "consumer society" is a "good thing," if we have one, it is critical that the people earn enough to consume. Clearly this has not been the case for at least 20 years based on the falling inflation adjusted disposable per capita income.
The fall back position to maintaining high consumption rates without rising incomes is credit availability at all levels. As we have seen over the last 18-24 months, this requirement has not been met. Indeed, much of the existing credit structure was "burned to the ground," in a search for immediate, short-term personal gain, by the same people that are now telling us how to "fix" it,
Economic recovery/expansion depends on the growth of high value added operations [to generate real income] which in turn depends on long-term credit availability in significant amounts (or forced draft industrialization on the Soviet model).
The Chrysler bankruptcy where the normal/customary rules of asset allocation are being nullified and even the secured creditors with colatteral/liens on real property are being "stiffed," possibly in the interest of some indefinite search for social justice, shows how even this is being sabotaged. The impending General Motors bankruptcy is likely to amplify and expand this trend.
What investor in their right mind will lend money to a corporation with no assurance that at least most of it will be paid back, or that their collateral would be "redistributed" in the case of bankruptcy for the "greater good" despite black letter law to the contrary.
Assuming an end of government [taxpayer] finance, look for an expansion of no-interest, no-colatteral, no-lien financing where the only way for a corporation to raise large amounts of long-term money is to sell their hard assets such as land and building, and to then rent these back under tenant-at-will [no lease to avoid leasehold problems] with ownership legally transferred, with an agreement to purchase the asset for some nominal sum after successful completion of the [20 year] rental agreement, i.e. "rent to own" on an industrial scale. The imputed "interest rate" will be very high, interest will not be deductible because there is no interest, and the other tax benefits, e.g. depreciation, will shift to the "lender." The corporate "assets" will also take a hit. While this will limit recover/expansion, it may well lead to much more honest accounting/tax reporting.
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
"Why not? We've seen people buying houses with no money."
They had income, that's why. New research by the Federal Reserve and Boston University of credit spreads of 900 non-financial companies from 1990-2008 predicted changes in the economy 'phenomenally' well. Based on their initial research on low to medium risk corporate bonds with more than 15 years to maturity, the researchers went back to 1973 and found the analysis still worked well. With the massive widening of corporate bond spreads last fall, the researcher's model predicts the economy will lose another 7.8 million jobs by the end of
2009, and industrial production will fall another 17%. In the spirit of optimism, let's assume this 'phenomenal' model is off by 35%, due to the extreme nature of this credit crisis. That still results in another 5.1 million lost jobs, and an 11% drop in industrial production. In that scenario, the unemployment rate climbs to near 12.5%, the underemployment rate breaches 20%, and another 500,000-750,000 foreclosures result.
The International Monetary Fund (IMF) now estimates the U.S., European, and Japanese financial sectors face losses of $4.1 trillion. Banks are confronting losses of $2.5 trillion, insurers $300 billion, and other financial institutions $1.3 trillion. To date, the banking sector has written down $1 trillion of expected losses. The IMF estimates that U.S. and European banks need to raise $875 billion in equity by next year to return to pre-crisis levels.
Over the last week a number of banks have reported first quarter earnings, which was a pleasant surprise. Citigroup said it made $1.6 billion. One of the ways Citigroup achieved this gain was booking a profit of $2.7 billion on the decline in Citi's own debt. Say what? Under accounting rules, Citi was allowed to book a one-time gain equivalent to the decline in its bonds because, in theory, it could buy back its debt cheaply and save $2.7 billion over time. Of course, Citi didn't actually do that. Even though more consumer loans went bad in the first quarter, Citi reduced its loan loss reserve from $3.4 billion in the fourth quarter to $2.1 billion in the first quarter, thereby picking up another $1.3 billion of 'earnings'. And the recent change in mark to market accounting enabled Citi to book an additional $413 million in 'profit' on impaired assets. Without theses one-time adjustments, Citi's $1.6 billion in first quarter profit becomes a $2.8 billion loss.
According to a Wall Street Journal analysis of Treasury Department data, the
19 banks that received tax payer funds made or refinanced 23% less in new loans in February versus last October. Why lend money when all you've got to do is make a few adjustments and make even more money.
Between 2000 and 2008, the major credit card companies increased the number of credit cards issued to small businesses from 5 million to 29 million. During that period, many small business owners increasingly relied on their cards to provide short term financing for their business. Spending on small business credit cards increased from $70.4 billion in 2000, to $296.3 billion, according to the Nilson Report. Over the last 15 months, business bankruptcy filings have risen faster than consumer bankruptcies, with the average charge-off rising to $11,000 from $7,000, according to Equifax, Inc. In response, the card issuers have been aggressively scaling back, and have reduced available credit lines by almost $500 billion. Just another example of how the availability of credit to the economy is evaporating, despite all the Fed's efforts.
Industrial production fell 1.5% in March, and is down 12.8% from a year ago. Capacity utilization fell to 69.3%, the lowest since records began in 1967. Excess capacity is a powerful dynamic. Companies are forced to reduce or eliminate budgeted investments in new equipment, compete for every dollar of revenue, even if it means accepting thinner profit margins, and reduce costs through job cuts. The amount of excess capacity that has been created by the depth of this economic contraction is unprecedented. What most inflation bugs and investors fail to understand is how long it will take to work off the current over hang of excess capacity. If the output gap grows from the current 7% to 10% next year, Goldman Sachs estimates it could be 2015 before all the excess capacity is used up, and that's if GDP grows 4.75% per year! Ironically, one of the reasons the economy is not likely to grow that fast is that business investment will be weaker than in prior business cycles. With so much excess capacity, businesses won't need to materially increase business investment for the next 2 or 3 years.
The economy needs to create 125,000 jobs each month, just to absorb the number of new entrants into the labor market. If job growth were to average
325,000 per month in coming years, it would still take four years to replace all the jobs lost in this recession. With so much excess labor capacity, wage growth will be weak for the next few years, which will make it harder for consumers to increase savings and spending. The combination of less credit availability, weaker business investment and consumer spending will be headwinds whenever the economy emerges from this recession.
Only problem, and it is a HUGE problem in all of north America, is the ENTIRE electrical generation infrastructure and the ENTIRE grid that supports it will need to be totally modernised, updated, upgraded and upsized before any conversion to electrical transportation can even be CONTEMPLATED, much less implemented.
EVEN IF all the vehicles weighed 1500 lbs.
That is not going to happen in 25 years.
25 years of TGDI engines would be a good run if it was combined with the downsizing that will be required to go electric. No reason North America can't commute with 360cc turbo direct injection gasoline powered vehicles TODAY.
That isn't a problem, it's an opportunity just as rural electrification was in the US seven decades ago. In fact, it's exactly the same opportunity now that it was then and one of the relatively few investments the government could make that would produce jobs NOW and yield a return for decades.
No, the major portion will be running by 2016 and the entire mess done by
2020.
Sure there is. Nobody's buying and the market is flooded with inventory that will increasingly be discounted - all the way to zero if required. The upside of that is that it won't mean diddly that the electrical grid isn't ready to go now, as long as we get to work with a serious effort. It's the war we ought to be fighting instead of the two that we are. You aren't one of those limp wristed pansy's are ya' Suck it up Buttercup! LOL
It the car manufacturers had their fingers in the gas supply like printer manufacturers do with ink, they'd be giving you cars for $5 and charging you $50 a gallon (or more) for gasoline.
And there is NO GUARANTEE house prices will go up over time.
The Boomers are retiring and downsizing, and dying. The GenXers and the Echo are a smaller number, with significantly less disposable income due to a MUCH reduced economy.(particularly the lack of high paying unskilled or semiskilled manufacturing jobs which have virtually ALL been exported). Who will be buying the 1.5 million dollar mansions? They will, by and large, be bought by those who can afford 750,000 dollar homes - for $750,000. Who will buy the 750,000 homes? Those who can afford 350,000 homes - for $350,000. The 350,000 homes will have a larger market, as many more will be able to afford 200,000 dollars, and the low end 200,000 homes will hold their value steady around 150 grand, and so on down the line. The tarpaper shack will be the only one that holds it's value, or possibly even gains. (my brother got over ten times what he paid for a shack in Saskatchewan, just 5 years after buying it) It will take a lot of good years before the demand (and ability to finance) the more expensive homes will improve to the point they regain their current, muchless 2007 values - and even longer before the low end will catch up.
There are SOME cars that are worth more today, evenin real dollars, than when they were built. Very few to be sure. The reason cars depreciate? They wear out, and styles change.
Sadly, much of todays housing stock also wears out due to poor build quality (build it as cheap as possible, load it up with extras, and sell it for what you can get.)
The LAND is all that has the potential to appreciate.
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