US Carmaker Dilemma: Build For US Market or Global One?

Will U.S. car buyers revolt at buying 'government mandated' vehicles tailored for foreign markets?

Published: 15-Dec-2009

DETROIT - December 11, 2009: This week the think tank and business intelligence company CSM brought it’s annual predictions to the Automotive Press Association in Detroit. There was nothing as earthshaking as last year’s prediction that Chrysler was doomed - unless you think that adding $31,900 to the cost of your favorite vehicle is news. That is the cost of non-compliance with EPA mandates in the future; and that cost forms the basis for a huge dichotomy.

Craig Cather, president and CEO of CSM, introduced his staff’s projections 5 to 15 years out. He insisted that after this past year of unprecedented carnage in the industry “we’ve hit bottom and positive signs are at hand.”

But he worries that the United States has no coherent energy policy. It does, however, have political energy focused in different directions that are perceived by some, but not all, as desirable. One of those is the push for smaller vehicles which could save the US car industry. However that means convincing Americans that buying small cars, vehicles smaller than the Ford Focus, Chevrolet Malibu, equal and smaller than Ford Fiesta and Chevrolet Cruze is what they must do for economic as well as patriotic reasons. Nifty, necessary, noteworthy and highly unlikely if fuel remains inexpensive. Would you rather have a Fiesta or a Flex, a Cruze or an Impala, a Dodge/Fiat 500 or a Chrysler 300? Given low fuel price that particular handwriting is in the sky, not on some back wall in Foggy Bottom. The EPA wants vehicles the size of A and B cars like Fiat 500, Cruze, Fiesta, and smaller to be the norm.

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