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High horsepower bubble in the making?


John Ranalletta

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John Ranalletta

Given the price of gas is skyrocketing (again), it's interesting and confounding to see the proliferation of high horsepower iron, not only from US car makers but Asia and Europe.

 

IMO, the only reason to buy an electric car is to have a collector's item in the next decade, but even Porsche, like all manufacturers, are making token, political, EV efforts to defect attention from their new street racers.

 

And Dodge? I really like what they're pushing - high hp iron for sure. Camaro? Mustang? Wow!! I could go for any of them, but are high hp cars the "mini mansions" of this decade?

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Doesn't everyone need 300 to 556 HP to get down to Kroger, Marsh, Winn-Dixie, the post office, to work and/or on vacation? Certainly the auto journalist think so. However, they don't buy the test car or pay for its gasoline. If a car doesn't have at least a 6.1 second zero to sixty time, you'll have problems merging on to the exchange and perhaps, over taking traffic on the way to grandma's house.

 

Yes, we are psyched about power, even if most of us don't/can't use over 50% of it 2% of the time. Not sure HP is the mini-mansion. If fact, I think we'll see high horsepower go away and smaller houses increase as the cheaper sources of energy disappear. I lived during the golden period (1960's) of high (falsely high) horsepower and really cheap energy...and I participated in it.

 

Not sure if it's just being older or wiser or both, but given the choice between 300HP @ 20 MPG for $40,000 (BMW 135i) or 140HP @ 30 MPG for $20,000 (Civic) - I'd be getting to the grocery store at the same 70 MPH with 140 horses and $20,000 cash in the truck.

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John Ranalletta
Doesn't everyone need 300 to 556 HP to get down to Kroger, Marsh, Winn-Dixie, the post office, to work and/or on vacation?
Hell yes.

 

I've been prowling dealerships and websites for months trying to persuade myself that shelling out $40-50k for a upgraded cage makes sense. Luckily, I get back in my '07 Accord that looks and runs like new and wonder if the difference between what I got and what I want is worth writing that check.

 

Up to now, the answer's been "no", but the fight ain't over.

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Like just about everything else, HP really depends on what type of driving you enjoy. If you're a stop light to stop light junkie, then big HP wins as long as you can get the power to the ground. If you love winding roads and want to drive aggressively but safely, I think light and nimble with excellent handling and brakes wins over HP every time.

 

I owned a beautiful Porsche 911 with a full 3.8 upgrade that I used as a daily driver and often used track car when I was a track driving instructor. On the track it was just about the most fun I can imagine having. The car was like a second skin.

 

On the street it was great; however, my friend's Miata was more fun to drive aggressively in 90%-95% of real world situations. You just couldn't push the Porsche hard enough before getting into crazy and IMO dangerous speeds.

 

 

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There's an old adage that, paraphrased, says "It's more fun to drive a slow car fast than a fast car slow." Bikes too. Can I push a 40 year old R75/5 40HP standard down a curvy mountain road? Hell yes. Can I push a 200HP liter class superbike? No, not really. My abilities are so far below the bike's limits that it isn't as much fun as the standard. Vinny's 911/Miata analogy is right on.

 

We had a hybrid thread awhile ago and some on the board were lamenting the slow, poor acceleration of these vehicles (even though they're equivalent to most mainstream cars of about 5 years ago), while somehow finding economy cars or "big ass pickups" more fun to drive. Huh? I don't know where these people are driving, but around here you're damn lucky if you can come within 10mph of the speed limit on any secondary road due to endless, relentless congestion, and the highways are clogged with slow movers as well. So what's the point? Here, having a high HP car is like buying a thoroughbred and using it to plow a field.

 

I've been subscribed to every major car mag for over 20 years, since I was 10 years old. Today's bland appliance Camry or Accord V6 can embarass sports cars of my youth. And get twice the MPGs doing it too. I hail this progress. I think it's fantastic. Some of today's manufacturers are doing a stellar job of providing BOTH power and fuel economy. Hyundai's turbo Sonata - 274 HP and about 34mpg highway - for example. Just a few years ago this type of power from a tiny engine and this kind of fuel economy were mutually exclusive entities.

 

Ultimately, all this HP is like money in the bank - you don't need to spend it, but it sure is nice to know it's there.

 

-MKL

 

 

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Not sure if it's just being older or wiser or both, but given the choice between 300HP @ 20 MPG for $40,000 (BMW 135i) or 140HP @ 30 MPG for $20,000 (Civic) - I'd be getting to the grocery store at the same 70 MPH with 140 horses and $20,000 cash in the truck.

Glad I'm not the only one. I could spend $100k+ on a car that'll almost do what the bike does for under $20k. I'd get horrendous mileage and astronomical insurance rates, plus buy my mechanic's kid braces every year or two. Or I can buy based on MPG, spend $20k, get tiny fuel bills, low insurance premiums and drool while watching "Top Gear" test the latest Pagani or Aston Martin or Lamborghini. Sign me up for a VW Golf 4 door diesel or Toyota Prius and I'll laugh my frugal ass down the road. If I wanna let the testosterone flow, I'll lose two wheels and piss off the Ferraris and Porsches. And laugh my ass off doing it. :grin:

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CoarsegoldKid

If a person wants a 400 HP car for any reason so be it. Hell my little Subi has 250 compact car horses and gets poor mpg IMHO. Soccer moms, boat enthusiasts, tech junkies, doctors, lawyers, and casino owners should all have fun doing what they like while stomping on the throttle. I might drool over those hot rods. Just don't complain about how much it costs to fuel the beast.

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JOHNNYWISHBONE

a thought. i have what i think is the most beautiful porsche ever made. it's not new. it's not near new. it's a 1978 930 TURBO. it gets 10 mpg.

i have a harley softail deuce. bought horses, not chrome. now, 35 mpg.

the new rt was purchased to be my primary transportation. i hope this works out.

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While high horsepower vehicles have gotten a lot more efficient, the writing is on the wall: eventually the price of fuel, government regulation and/or social stigma will kill most of those vehicles. There will long be a market for exotics, but the common man will find it difficult to scratch the horsepower itch.

 

The answer, I think, will be found in ultralight performance cars, akin to the Ariel Atom and the Caterham Seven, though at lower price points.

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John Ranalletta

Mike, are you ready to turn your WRX into a donor car?

 

subie-racerA.jpg

Have you ever wondered what would happen if you stuffed a Subaru WRX motor into something that's mid-engined, rear-wheel-drive, and weighs less than 2,000 lbs.? Because that's the next Factory Five car - a two-seater built around inexpensive and indestructible Subaru running gear. The styling isn't finalized, but I'm imaging something that looks like Lancia Stratos. And if you don't break into a creepy serial-killer smile every time you imagine an affordable, WRX-based Stratos, then you are some kind of weirdo. The car's new wheelbase is locked in at 95" which is a little longer then an Exige.

Factory Five

 

 

 

 

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Joe Frickin' Friday
And yet we all drive expensive, high HP BMW motorcycles rather than single cylinder japanese imports...

 

...cuz even with high-performance bikes, you can still get fuel economy in the 30's or 40's (even when hooning it up), and the bikes themselves don't cost $60K. Compare that to a Corvette, which does cost about that much, and gets a fuel economy in the low 20's even when cruising the highway at a modest pace.

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Compare that with a $3-6K S60 getting in the 70-90mpg range. It's all relative.

 

*edit

 

Sorry, it's been a few years. $8K for the S50 which will easily exceed 50mpg

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And yet we all drive expensive, high HP BMW motorcycles rather than single cylinder japanese imports...

 

...cuz even with high-performance bikes, you can still get fuel economy in the 30's or 40's (even when hooning it up), and the bikes themselves don't cost $60K. Compare that to a Corvette, which does cost about that much, and gets a fuel economy in the low 20's even when cruising the highway at a modest pace.

 

Not sure that's a fair comparison.

 

Corvette's are getting mid to high 20's in actual highway driving. EPA's are mid 20's, and owners cruise all day at 25mpg without nursing the go pedal. Plus with proper tires you can drive it 12 months a year. How many of us living in the northern regions own just one Beemer and no car?

 

IMO that's pretty amazing performance/efficiency. I go back a few years so I'm jaded, but I never thought we'd see the day where the hottest performing cars would be anywhere near even 20mpg.

 

There are a number of cars that will match a motorcycle's efficiency especially if you have to move 2 or more people plus luggage. Neither is better/worse IMO, it's just not apples to apples.

 

 

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Hey Mitch,

 

I've got a Honda Accord V6 coupe, and a 2000 Corvette coupe.

 

Care to guess which get's the better hiway mileage?

 

My home, to my kids place in Victoria is ~300 miles. The 'vette consistantly gets 1 to 3 miles per gallon better than the Honda.

 

It's way more fun to drive too!

 

It's lighter, lower, and more slippery. And that big ol' aluminum V8 is only turning ~1900 rpm at 70 mph.

 

It's a hybrid doncha know, burns gas and rubber!

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If basic transport is all that is desired, which sadly is what most seem to gravitate towards, we'd all drive scooters or bicycles. Most drivers don't seem to put fun or performance tops on their lists. Evidence in the form of minivans, pickups, SUV's, Versas, etc. Cost and what is needed rank higher.

 

We, who can afford a second (toy) vehicle, have chosen what we have. High power to weight ratio, all the intangibles of motorcycling, etc. High MPG compared to the workaday cage is a benefit but I suspect not on most minds.

 

Personally, I was planning on buying the K1200GT but preferred the RT after riding both. Saved $2K but gave up 40 HP. Don't care about and didn't notice the HP loss. Would have liked to paid less(who wouldn't?) but I got what I wanted and could afford. I think most are in the same boat.

 

Trying to compare a primary vehicle purchase to an occasional-use second vehicle purchase is unfair. One is needed, the other is not. Few would use a bike as their only vehicle. I did out of need for 10 years and it wasn't easy at times.

My $.02.

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Given the price of gas is skyrocketing (again), it's interesting and confounding to see the proliferation of high horsepower iron, not only from US car makers but Asia and Europe.............

I could go for any of them, but are high hp cars the "mini mansions" of this decade?

 

Yes, and I want one....

cadillac-cts-v-2009-hr-03.jpg

 

 

 

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All the 500+hp American car sales will probably not exceed 10,000 cars annually. That's a fraction of the 12,000,000 sales expectation for 2011. Less than 0.1% to be precise.

 

I would take issue with the other 99.9% of vehicles out there. Let's start with the pickups. There is no full size model in the market today that matches the home contractor's needs.

 

Easy bed access - Definitely not

Low gas comsumption - 15mpg is the best in town.

 

Why? Because most pickups are designed for towing a sh1tload of stuff that 80% (unsubstantiated) of them never tow. It's not that hard to scale down the pickup and leave the pickup bed the same. That should get at least 10mpg over the existing specs.

 

No, instead we keep advertising how our nuts and bolts and differentials are bigger than the competitors. Ford alone sells over 500,000 trucks a year for the past decade. Our car industry has a lot to learn.

 

Unfortunately, the foreign manufacturers are learning it faster. Chrysler still doesn't have a hybrid in it's lineup while it's feverishly working in secrecy to bring out the 2012/3 Viper with well over 600+hp. The much touted Chevy Volt is a 4 seater, a 4-seater in a 5-seater car world. The missing middle seat space in the back is taken up by cup holders. Now I don't understand car design much, but didn't they get rid of a transmission tunnel? Ford is probably the best positioned American car maker. We are doomed to idiotic and wasteful technology like $2000 in-dash navigation systems that cost less than $200 from Best Buy and are portable from vehicle to vehicle.

 

Bottomline: Our car manufacturers are not in touch with our needs.

 

P.S. I am in the market for an SUV when my PT Cruiser croaks. Right now, the Subaru Outback CVT is my favorite with great space and 22/29mpg city/highway.

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John Ranalletta

It's interesting to watch the car industry fashion shows in Detroit, Chicago, Geneva, et al. It's like watching the skinny models on a NY runway, i.e. who the hell would buy one of those?

 

There's lot of trouble brewing for US car makers. While Audi has a backlog of orders (note the high end buyers), GM is channel stuffing and discounting like crazy:

 

GM%20February.jpg

 

...and, GM is back to its old discounting and financing ways; but, why not when you have the Uncle and his printing presses to bail you out a 2nd, 3rd and 4th time...

 

Bloomberg: General Motors Co. is offering buyers interest-free financing on some 2011 models after the company increased discounts and incentives to lead all major automakers’ U.S. sales gains last month.

 

The loans became available yesterday for 72 months on the Chevrolet Impala sedan, as well as for 60 months on the Malibu sedan, HHR wagon, Traverse sport-utility vehicle, and Silverado, Colorado and Avalanche pickups, according to AIS Rebates in Ann Arbor, Michigan. The 60-month deal also applies to the Buick Enclave and GMC Acadia SUVs and Sierra pickups.

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>>>>Why? Because most pickups are designed for towing a sh1tload of stuff that 80% (unsubstantiated) of them never tow. It's not that hard to scale down the pickup and leave the pickup bed the same. That should get at least 10mpg over the existing specs.<<<<

 

There are plenty of "scaled down" 4 cylinder pickup trucks available for sale. Toyota Tacoma, Chevy Colorado, Nissan Frontier and Ford Ranger come to mind. None of them get anywhere close to a 10mpg improvement over full size models - not even 5mpg in many cases - and they obviously aren't as useful to contractors.

 

>>>>>The missing middle seat space in the back is taken up by cup holders. Now I don't understand car design much, but didn't they get rid of a transmission tunnel?<<<<<

 

No, the middle space in the rear is taken up by the traction battery which runs straight down the middle of the car's chassis like this

 

chevrolet-volt-photo-gallery.jpg

 

The issue isn't necessarily that high HP cars are 0.1% of sales, but that a substantially higher share of profit is made on them than the other 99.9%. You know what the profit margin is on those dreaded full size pickups compared to your average sedan? I am not arguing with the spirit of what you said, but the letter of it.

 

-MKL

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John, the financing deals reported on by Bloomberg are all on old models that aren't moving anymore. For the record Toyota is doing the same (my local dealer is advertising 60 months no interest on Prius, which sells pretty well compared to those old GM clunkers in the Bloomberg report). It also neglects to mention some of the hot selling models - the Volt is commanding up to $5k premium on MSRP and a 4-6 month waiting list. It's not all doom and gloom, at all.

 

-MKL

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John Ranalletta

Clunkers? Looks more like half the fleet...

The loans became available yesterday for 72 months on the Chevrolet Impala sedan, as well as for 60 months on the Malibu sedan, HHR wagon, Traverse sport-utility vehicle, and Silverado, Colorado and Avalanche pickups, according to AIS Rebates in Ann Arbor, Michigan. The 60-month deal also applies to the Buick Enclave and GMC Acadia SUVs and Sierra pickups.
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C'mon John, you know better. Those are mostly ancient clunkers due for makeovers at the end of their lifecycle. There is going to be a period of this as the new models start rolling out. Check Car & Driver this month - GM, a company I have hated for most of my life, actually has some interesting stuff in the pipeline. Don't write them off yet.

 

-MKL

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>>>>>The missing middle seat space in the back is taken up by cup holders. Now I don't understand car design much, but didn't they get rid of a transmission tunnel?<<<<<

 

No, the middle space in the rear is taken up by the traction battery which runs straight down the middle of the car's chassis like this

 

chevrolet-volt-photo-gallery.jpg

 

The issue isn't necessarily that high HP cars are 0.1% of sales, but that a substantially higher share of profit is made on them than the other 99.9%. You know what the profit margin is on those dreaded full size pickups compared to your average sedan? I am not arguing with the spirit of what you said, but the letter of it.

 

-MKL

Thanks Moshe, that picture is worth a thousand words. And yes, I am very spirited! :grin:

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John Ranalletta

Don't be in a hurry to buy an EV now. That collector's item will be lots cheaper shortly:

 

"GM sells just 281 Chevy Volts in February, Nissan only moves 67 Leafs"

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John-

 

I don't know where you're getting your figures from. GM is producing 15k Volts for nationwide consumption in MY 2011. All are sold. Premiums over MSRP are hovering around $2500-5000. Place your deposit today and you might see a car 4-6 months from now. Hardly sounds like poor sales to me. Trust me on this, I just bought one for my dad.

 

-MKL

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John Ranalletta

Moshe, we're obviously on different sides on the EV issue. I'm not anxious for their demise, but they're just ill-fated.

 

I'd consider buying one of Jay Leno's coal-fired antique cars for $46k, but not a new EV. Even with Uncle's $7.5 break unit sales are bleak.

 

Given the target markets, i.e. museums, EPA officials, people on the WH guest list and overly-well-healed activists, the unit numbers are probably pretty good.

 

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John-

 

Yes, we're on different sides indeed. One of the aspects that I think is causing confusion here is "deliveries" vs. "sales." Two VERY different things. The GM spreadhseet you link above calls 281 the number of "deliveries," meaning produced finished goods sold from GM to dealers. The Autoblog link calls them "sales" meaning, presumably, sales from GM to its dealers.

 

To confuse the two paints a very flawed picture, which doesn't jive with reality. Reality is production is just now slowly ramping up on both Volt and Leaf. I can speak better of Volt since I have experience shopping for one. Production is limited to 15k for the year, and if you try to buy or lease one, you're going to pay a hefty premium, or wait 4-6 months, or both. Call around, and check what I'm saying, and let us know if the same is true in your area. It certainly is here. A waiting list and price gouging over MSRP speaks to consumer demand FAR more than the actual deliveries GM made, which speaks to constraints in SUPPLY due to production just ramping up.

 

We shall see where this ends up, and whether these vehicles are "ill-fated".

 

-MKL

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John Ranalletta
John-

 

I don't know where you're getting your figures from. GM is producing 15k Volts for nationwide consumption in MY 2011. All are sold. Premiums over MSRP are hovering around $2500-5000. Place your deposit today and you might see a car 4-6 months from now. Hardly sounds like poor sales to me. Trust me on this, I just bought one for my dad.

 

-MKL

I can't vouch for Truecar's stats, but they say that Volt's are selling a tad bit above sticker, nationally, regionally and locally (Indy). Based on your info, you should fly/drive. Of course, you'll want to plan plenty of stops. :D

5478.jpg.47640f8f6666f1c8927d30f638cbda32.jpg

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I found a trusted dealer not too far away that will sell me MSRP if and only if I don't nag for delivery. Dad's in no rush so the 4-6 month lead doesn't affect me any. Anyway, no such thing as a slow selling vehicle that commands premiums over MSRP. Supply, and demand. Too bad that blog post you linked to failed to differentiate between the two properly.

 

-MKL

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John Ranalletta

In my experience, when auto sales are disclosed, they are always sales to dealers as mfgrs consider a car "sold" when it leaves the factory, regardless how many months it might sit on a dealer's lot.

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Yes, precisely, that is exactly my point. The article in question made it seem like only 281 people bought Volts in February, an absurdly incorrect conclusion. Really, sometimes journalists can be quite irresponsible!

 

-MKL

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I found a trusted dealer not too far away that will sell me MSRP if and only if I don't nag for delivery. Dad's in no rush so the 4-6 month lead doesn't affect me any. Anyway, no such thing as a slow selling vehicle that commands premiums over MSRP. Supply, and demand. Too bad that blog post you linked to failed to differentiate between the two properly.

 

-MKL

 

It's way too early in the sales cycle to cite "supply and demand." Currently so few vehicles are actually being supplied that demand of these media hyped vehicles is going to be higher than the trickle of supply. Give it a year or two with actual availability in dealerships and see how supply and demand works out.

 

I would be all about an EV if the finances work out to actually save me money on my commute, but so far they seem more like fashion (or religion) and less like function. IMHO this horsepower bubble will burst and fuel economy goals will be met when fuel prices dictate it and not a minute before. Now that's supply and demand.

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It's way too early in the sales cycle to cite "supply and demand." IMHO this horsepower bubble will burst and fuel economy goals will be met when fuel prices dictate it and not a minute before. Now that's supply and demand.

 

It is never "too early" or "too late" to cite supply and demand. You are correct that supply is limited - some incorrectly try to paint that as demand being lax.

 

Second, fuel economy goals being tied solely to fuel prices as your example shows is not supply and demand. It is demand. Supply can be determined by other things out of the consumer's controls and regardless of demand, such as regulation mandating increased fleet averages, for one obvious example.

 

-MKL

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