Economic Obsolescence

Several of the most successful car (and engine) designs were successful because they were around for a long time. The original VW Beetle is an example and so is the small block Chevrolet V8.

Both were in continuous production for decades.

For generations.

Beetles were still being produced (in Mexico) until the early 2000s in largely the same basic form and layout as when the first one was paraded before Der Fuhrer in the mid-1930s. And Chevy’s small block V8 outlasted Eisenhower, Kennedy, LBJ, Nixon, Ford, Carter, Reagan, Clinton and Bush senior. The same basic engine that was installed in ’55 Chevys was still being installed in new Chevys as recently as just a few years ago (and the current GM “LS” V8 shares many of the same design features, even though parts do not interchange).

Cars — and engines — used to stay in production without major changes for much longer, generally. For example, my ’76 Pontiac Trans-Am is pretty much the same car as a 1970 Trans Am and also a 1981 Trans-Am. The production run lasted 11 years.

This was good for the car companies and for us, the people buying the cars.

The car companies were better able to amortize the costs of designing a new car (or a new engine), including tooling costs — which can be huge. Knowing that a new engine might be in production for 20 or even 30 years encouraged investment in new/radical technologies — because the car company stood a very good chance not only of making back whatever it had invested but also a lot of “gravy” after that.

The small block Chevy, for example, was a wild design back in 1955. It was light and compact; it had an innovative valvetrain that allowed it to rev freely, reliably — and it made a lot of power for its size (it was one of the very first engines to achieve the magical 1 horsepower for every cubic inch of displacement).

It was such a good engine that — beyond relatively superficial changes such as increases in displacement and the replacement (eventually, after decades in production) of carburetors with electronic fuel injection — it wasn’t retired from front line service until the early 2000s.

Millions of them were made.

Similarly, the Beetle. It got tweaked here and there, but a late ’70s Beetle (or even an early 2000s Mexican Beetle) was fundamentally the same car as a 1930s example.

Because so many were made over such a long time, parts (new and used) were and still are readily available. And cheap. You can buy a brand-new crated replacement small block V8 from GM today, over the counter, for less than $1,500.

That is for an entire engine.

This makes it economically feasible to keep even a fairly ancient (by modern car standards) Chevy in service. Not as a hobby car — as a daily driver. It’s why you still see Beetles — which were last sold new in the United States back in 1979 — still being driven, and not just to car shows.

Rust aside, these cars and cars like them can be kept economically operable for 40 or 50 years.

But that’s becoming less and less economically viable as cars — and engines — become obsolete much sooner. A “product cycle” — industry speak for the shelf-life of a new car — is currently about four years and shortening. Cars are generally “refreshed” — given a major update, cosmetically as well as functionally — before four years go by. It is not a lot of time to make back your investment — much less make much profit.

Not even trucks (which used to be simple, rugged things) last ten years in production without major alterations such that they are — at best — only distantly related to what came before.

Electronics — the pace of change — is partly responsible for this. Today’s state-of-the-art touchscreen and mouse input is next year’s dated, no-longer-supported throw-way (just like a smart phone).

The mechanicals also change dramatically — and rapidly. Part of this being driven by the distorting effect of federal edicts, especially those demanding upticks in fuel efficiency that can’t be achieved without radical engineering solutions such as automatic transmissions with eight and nine (and shortly, ten) speeds. These transmissions cost more to replace — much more — than an entire brand-new replacement crate small block Chevy V8 engine.

Some of them literally cost more than what it would cost you to buy an entire old Beetle in decent “driver” condition. When the transmission in one of these cars fails, the car is junk.

The practical consequence of all this is that new cars become “old” — economically obsolete — much sooner.

When the “all new” model comes out, the previous model suddenly becomes a candidate for sub-prime loans and — sooner rather than later — the recycling lot. It depreciates even more rapidly and not just because it is no longer “new” (or even newish) but also because parts for it become harder to find and more expensive to find. The manufacturer stops pressing them out; supply dwindles and cost goes up.

It is also becoming more expensive to diagnose the new stuff–that is, to figure out what’s wrong. Which is something generally desirable before one attempts to fix whatever the problem may be.

Did you know that repair shops have to buy proprietary diagnostic equipment in order to be able to service new cars? This is not cheap.

And when their equipment is no longer current with the latest “upgrades” — or they decide it’s not worth it to invest in equipment to deal with the no-longer-newest stuff — they can’t service your four-wheeled Hal 9000.

Throw it away. Buy another.

Monthly payment, that is . . .

This may be accidental — a side-effect of the picked-up pace of everything and of the regulatory regime that today is the principle “decider” of vehicle design rather than the car buying public. Or it could be deliberate policy. The purposeful acceleration of planned obsolescence, with the end goal being not merely to get people constantly buying new but to get them out of buying altogether.

Renting makes much more sense when cars no longer make economic sense.

Note the investment in ride-sharing being made — and touted — by the major players. The hard-selling of so-called “autonomous” cars — which are no more “autonomous” than a city bus. Someone continues to control the vehicle.

It just isn’t you.

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One Response to “Economic Obsolescence”

  1. Mike Smith says:

    Designers are partly at fault. There has been hardly a decent look car, or now even trucks, made in the last twenty years and more that doesn’t look not just ugly but increasingly freakish! Demonic! Angry, glaring headlights are the worst, even worse that tailights that follow no logical shape over that so somehow impress. With what? The sick minds of the designers? Twisted, distorted looking body panels betray a mind set that is not towards practicality, let alone any reasonable concept of beauty. One odd thing is it is more and more difficult to distinguish the brands. The banality of ugly makes all look insanely, even uniformly ugly! I won’t buy one the things! My oldest is the last manly looking Lincoln, a 1994, for which many body parts are impossible to find. My newest a 2000 Subaru Outback, the latest half-way decent looking of its brand. My next? Well, it will have to be more than 20 years old, possible a restored car of much older vintage. I love the 1934 Ford three window coupe with suicide doors! Maybe with one of those small block Chevy engines?