PeakTrader.com

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PeakTrader said...

The U.S. has a comparative advantage in larger vehicles, which tend to be more profitable (U.S. automakers have been much less successful producing competitive smaller vehicles).

Here's an example:

2012 Truck of the Year Winner: Ford F-150

"It seems as though Ford's big marketing push with the EcoBoost is centered on fuel economy.
During our testing, the EcoBoost turned in almost identical numbers to the 5.0-liter V-8. Most consumers will look at that and think there isn't really an advantage to buying the slightly more expensive twin-turbo V-6 if the efficiency benefits prove negligible. Were the performance between the two the same, we'd agree, but the smaller engine's performance is closer to the 6.2-liter V-8's.

It's the combination of advancement in design, engineering excellence, efficiency, safety, value, and the performance of intended function that has earned the Ford F-150 the title of Motor Trend's Truck of the Year."

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If a larger percentage of Americans can afford a 2012 Ford F-150 (or a similar vehicle) today than a new Ford Pinto in 1980, what does that really say about inflation (and interest rates) or real income?

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Glenn Jericho says: "24.1 mpg...Or roughly the same mileage as a Ford Model T."

"The Model T had a 177-cubic-inch (2.9 L) four-cylinder engine producing 20 hp for a top speed of 40–45 mph... had fuel economy on the order of 13–21 mpg."

How to start a Model T: "The crank handle was cupped in the palm, rather than grabbed with the thumb under the top of the handle, so that if the engine did kick back, the rapid reverse motion of the crank would throw the hand away from the handle, rather than violently twisting the wrist or breaking the thumb."

"A Model T could not climb a steep hill when the fuel level was low. The immediate solution was to climb steep hills in reverse."

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Jet Beagle, I agree with Juandos, and add that in Germany, France, and Japan, incomes are lower and gasoline is higher.

More full size Japanese pick-ups (e.g. the Toyota Tundra) may be sold in the U.S. than in Japan.

There are many differences between the U.S. and other countries:

Why U.S. Automakers Don’t Sell Cars in Japan
Dec 21, 2009

"Owning a car in Japan is very expensive. Between expensive mandatory inspections (known as shaken), high gas prices, exorbitant parking fees, and registration costs, many Japanese consumers rely upon public transportation.

The Japanese consumers who do buy vehicles try to limit their costs. In other words Japanese consumers favor very small, inexpensive cars. The best-selling car in Japan in 2008 was the Suzuki Wagon, a 2,100 lb “minivehicle” with a 92 hp 1.3L motor."

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juandos said...

"then Germany, France, Japan, and the rest of the world should be importing light trucks manufactured in the U.S"...

Well you know jet beagle this is purely anecdotal on my part but in countries like Germany, Italy, France, and Norway I have seen how larger vehicles have a very hard time in the cities, especially the older parts of those cities...

I also saw similer problems in Japan, again in the older parts of Tokyo and Hokaido...

There was just to little space to park them and in some case even to drive them...

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Jet Beagle, so, you don't believe the U.S. has a comparative advantage producing large vehicles, while other countries have a comparative advantage producing small vehicles?

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Jet Beagle, an example of comparative advantage is the U.S. is better at producing larger vehicles than smaller vehicles, while Japan is better at producing smaller vehicles than larger vehicles.

So, the U.S. specializes in larger vehicles, while Japan specializes in smaller vehicles.

If the U.S. can consume all the larger vehicles and smaller vehicles, that's a different advantage.

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Ron and Jet Beagle, I don't know how you concluded my statement has anything to do with absolute advantage.

My statement says nothing about the U.S. being better than Japan at producing one or both or vice versa.

So, you don't believe the U.S. is better at producing larger vehicles than smaller vehicles, and Japan is better at producing smaller vehicles than larger vehicles?

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