The Portrait of a Broken Automotive Industry

As a master certified automotive technician I can attest to the ever increasing complexity of the car. There is also a shift happening in the automotive technician and repair industry. The kind of person who wants to repair cars professionally isn't the same kind of person it used to be. A lot of technicians are getting aged out. Many aren't keeping up with the technologies being implemented. The diagnostic fees are going up. The percentage of erroneous diagnoses is going up. It's getting more and more difficult to diagnose cars to a point where the inevitability of getting it wrong is going up. Situations that I've dealt with like a BMW that had faulty wheel speed sensors which caused the power windows to be inoperable. And so young people aren't interested in working on cars anymore. Most people don't realize that technicians have to buy their own tools. And if you expect to diagnose cars, which becoming more and more what working on cars is, you have to have scantools. Fully compatible scantools are in the 2k to 5k range. And no one scantool does everything the best. So more often than not you have to have multiple scantools in order to cover all makes. So in scantools alone one could spend 10k easily. In my 18 years I've easily spent hundreds of thousands in tools. The relation is that as cars keep getting more and more complicated so do the tools required to work on them. Every manufacturer now has a special set of tools to do timing chains now. This same issue is happening in housing. All apartments are continuously raising the rent. At some point you'll price out all the tenants. And the people that can afford the apartment can afford to buy a house. So why would they rent? All these industries are getting way out of control.

As a 20 year old college student, it’s scary how expensive everything is getting. Tuition, housing, healthcare, cars etc, the dream my immigrant parents had when coming here is going farther away from reality, and it’s extremely disappointing

I'm in my 60s, and I retired a few months before the pandemic. I've been a car enthusiast since before I had my driver's license. My post-retirement plan was to buy a fun, somewhat aspirational car that my wife and I would enjoy while we're still young enough to take road trips. Shopping has proven frustrating for many of the reasons you outlined, so much so that it seems we'll be keeping our 2011 minivan and 2012 hot hatch for the foreseeable future. Dealer behavior has just about killed the last of my automobile enthusiasm.

20 year old college student who is looking to buy my first car. When FL5 came out I was so excited as a die hard Honda / Toyota fan. I told myself I would have nothing else but that car. Then MSRP dropped. I'm a mechanical engineering major so I told myself 43k is not impossible, I just need to graduate early, find a good job, work for a year or two and I can have my FL5. Then I started to see all the markups. Frankly, they destroyed my dream of owning a brand new Type R. So, I started looking elsewhere. FK8? Value holds strong at 35-40k, with a lot of miles and abuses going into them. GR86? Either pay markup or wait for a whole year and compete with 50 other people on the list to buy it. BRZ? Same story as GR86. GR Corolla? Same story and even rarer than all cars mentioned above. Ok then what about Civic Si / new Integra? New ones are not exciting at all yet still sits around 30k. Old ones are nearly 22k out of the door of dealers, and conditions are not even good. Not worth it I guess. WRX? I hate the new one, and the old ones are still 25-30k (same story goes to old 86/BRZ/FRS), with an engine, at that mileage and abuse level, basically sitting in the car as a time bomb. I was left with NO options at all. What in the world is going on in this market? My family is fairly well off and I don't pay student loans, yet even my family can't really make purchase decisions now just because of the sheer absurdity going on. That enthusiast living inside me is dying. Now I only look at sub 15k old cars because anything beyond that seems to be a ripoff.

Appreciate that Mark showed love to us common folk by ditching the Patagonia for his best Kirkland Signature sweater. A man of the people.

I have worked as a technician for several dealerships. The similarity they share is the constant need to get bigger, sell cars, and always reminding their employees they are losing money. All the time. Yet the owner, who inherited the business from his father, shows off his $3million car he just bought on instagram. They quite often offer no substantial guaranteed wage. One day when you leave due to a commission pay plan that has withered due to economic and supply chain machinations far beyond your control they begin to gripe about how no one wants to work anymore. Also they are losing more money. Then buy 4 more small dealers whose founder died and the kids want to cash out.

You nailed it. I’ve always been a “car guy”, and finally landed a good job in my early 30s. Can’t afford a house, can’t afford a fun new car, don’t want what they’re calling “economy cars” (expensive junk with complicated components designed to fail and only be supported by the dealer). Guess I’ll keep driving my 22 year old beater with well over 250k miles because it’s paid off and I can keep it running myself.

I’m in the tractor business with a fairly large OEM. As a field service rep I can see most all of these same issues happening in the tractor market. Prices have skyrocketed, and product being on allocation is killing the mom and pop dealers that made our business what it is today. It’s almost as though the OEM’s knew all this was coming, as we were getting pushed before the pandemic to squeeze dealers on their facilities. On my side of the business, it was all about how hard can we squeeze a Dealer to make money on the service side. I have said for many years now that the government will be legislating the internal combustion engine out of existence, and here we are. As the AG industry tries to go electric, its becoming a train wreck. No one wants to be left in the middle of their field or property with a dead battery and virtually no way to charge it. Let alone the complexity that comes with this tech. There’s wholes teams of people that develop this tech, yet the OEM’s expect one or two people at a Dealer to be capable of repairing it. This really is a sad state of affairs as we get to watch our passion, and livelihood disappear in real time.

As a ex car salesman, these dealerships and the management working in them are the most slimy and scummy people I’ve met, they look at people as nothing more than a check

As a retired engineer, car nut and Jr economist you nailed it. My daughter has no interest in owning a car or getting a drivers license. Cars will be like phones. I could not agree more with this. I was ready to replace our Honda Odyssey with a another one and also get a Subaru BRZ for myself. Trying to buy a couple of new cars this summer was a waste of time so I put a new belt and water pump on the Honda and going to keep it another 5-8 years. I am refurbishing my old Lotus 7 and my Alfa Romeo GTV 6- 3.0 . I am taking the family on some nice trips instead of buying new cars.

A few weeks ago, some people were telling me to get rid of my BRZ. Asking me why i would hang onto. These people were fellow enthusiasts, but they're in the mindset of buying and selling constantly. This video perfectly puts into words why I would rather hang onto it as opposed to ditching it for something else

The real issue: cars are a necessity in North America, whereas they are optional in most of the rest of the world. When you make cars a necessity, "practicality" rules, the average person dictates what is important, and any issues associated with vehicles (like financing, or fuel economy) are amplified and carry a higher societal burden. In Europe, sports cars and cheap economy cars are still alive because owning a car is often a choice or born out of unique circumstances. If a car is no longer a necessity, you can buy a car that's compromised, like most enthusiast vehicles. Likewise, if you have access to all your needs by foot at home, but commute to work, you can buy a Volkswagen Golf and have a fun car that gets 40 mpg on the highway, but carves up back roads on the weekend. You no longer need a massive car that can haul two adults, some kids, and all your crap. To participate in the American economy and lifestyle, you are required to have a car or you won't get far (literally). GM and other car manufacturers ensured we HAD to drive cars decades ago by giving busses to cities in exchange for them tearing out fantastic public transportation. When that public transportation was no longer an option, cars became increasingly necessary for average people, and in time, just felt like the natural choice for personal transportation, but it isn't. That feeling was manufactured. Until we make cars optional in North America, we will be left with horrible, soulless, SUV crossovers, that have terrible drivetrains because they need to meet insane emissions goals and family needs due to our outsized reliance on cars as daily transportation. The moment cars are no longer required for our daily lives, we will start to see cheaper cars (less pricing power over average people) and more enthusiast vehicles (since they will represent a higher percentage of car buyers).

I’m in Texas. Cars are a way of life by force. If you can’t drive, you can’t get to work or the grocery store. A lot of younger people are advocating public transit more so than whatever car is coming out

My Wife's grandfather and uncle ran a great CDRJ dealership in rural Texas. It was the typical Mom and Pop dealership older viewers might remember from decades ago. The employees were treated like family. When her grandfather died, we were in the limo behind the hearse and went past the dealership. Every single employee who was working stood somberly outside to pay respect to the man who started the business that puts food on their table. It was one of the most touching things I have seen in my life. Fast forward a few years, and that dealership was bought out by a chain of dealerships. Almost all of those dedicated employees got pink slipped and replaced with high pressure sales and finance people. It's just a damn shame. Personally, I'm driving a 2010 car. Parts are available, and the suspension is endlessly rebuildable and upgradable. Steering is hydraulic and effort builds in the most satisfying way. I got a new loaner when I took it in for the airbag recall. I could not wait to get my car back. The new car was faster, but soulless. I'm going to keep this one until it's either a pile of rust, or illegal to drive.

As a software developer I really appreciate you connecting the automotive industry to the mobile market. It hit me like a brick when you made that connection.

When I bought my Alfa GTV in 1975 (as a college graduation present to myself), I could never imagine that I'd still be driving it at essentially the end of the automobile. It currently has 648,000 miles on it (over a million km) and I just spent ~$15K having the powertrain rebuilt so I'm good for a bunch more.

So happy you talked about this, been sitting here like “how are people paying 40k for a Corolla and don’t care”

Omg. Thank you so so much for verbalising what I was grappling with emotionally for the past month when car shopping. I couldn't put a finger on why I was feeling like this, many sleepless nights! For the last month I've been wondering why I was hating the process, hating the mundane microwaves on wheels, hating the subscription service, hating the fake smiles and coffee offers, hating paying $3K for audio upgrade knowing I could build one way better for $1k. I hate everything about the current car market and the cost just rubs salt in the wounds. I actually walked away from Audi when trying to trade in my A1 because the experience left such a bad taste in my mouth. I just want to buy an old piece of metal that works but which I actually love. I can fix the sound, someone qualified can fix the engine. I can own and love it forever. I can't thank you enough for validating my feelings.

It's nice to hear someone talk about how insanely unaffordable and unappealing car ownership has become for most people. I like track tests and road trip docs as much as the next person, but frankly it feels detached from reality.

Thanks for a very intriguing perspective. I live in Ottawa, Ontario, Canada. Here are two stories of our experience as we try to buy a BEV/HEV/PHEV. We ordered a Tuscon HEV in January 2022 and we were told it would take six months to get one. We checked in monthly (the dealer NEVER contacted us) and kept getting told that "production should begin soon". This past week, we got fed up with waiting and bought a 2023 Tiguan SEL. We phoned the Hyundai dealer to cancel the order. 5 minutes later the sales manager phones and says "You'll never believe this but we just received your car last night!". You're right - we don't believe it. Before we bought the Tiguan we went by the Toyota dealer. They had 4 2021 RAV4 Prime's in stock. The average price was $CDN70,000!!!!!!!!!!!!!!!!!!!!