U.S. President Donald Trump
All it took to melt President Donald Trump’s heart was the sight of a tiny car he wouldn’t set foot in.
While he is ferried around in an armoured Cadillac believed to weigh 10 tonnes and nicknamed “the beast”, Trump expressed delight last Wednesday with Japan’s pint-sized kei cars, deeming them “really cute” and “really beautiful”, in language that was surprisingly effusive and not a little unnerving.
Given that he made the comments at an Oval Office ceremony to announce the evisceration of his predecessor’s fuel economy standards, they were also ridiculous.
What’s more, they unintentionally underscored the huge difficulties Trump faces in delivering on his promise to cut sky-high vehicle prices.
Trump saw kei cars on his recent trip to Japan, where they are hugely popular.
The reason for this is that they are very small by US standards, cheap and fuel-efficient. The most popular model there, the Honda N-Box, is about 3m long and less than 2m wide, smaller than a Fiat 500 mini-compact car.
It gets upwards of 44 miles per gallon or about 18km per litre and attains about 60 horsepower, less than half that of the Fiat 500’s fuel version.
And even a top of the line trim will set you back only about US$16,000 in Japan, including tax. All of this makes them suitable for folks living in dense urban environments and paying 35%, or about a US dollar a gallon, more at the pump than the average American.
The case for the N-Box and its ilk is less intuitive in a country where the prevailing aesthetic tends toward the immense and suburban planning seemingly adheres to a principle of fitting the least amount of usable dwellings in as wide of an area as possible.
The average new vehicle sold in the United States weighs two-and-a-quarter tonnes versus the N-Box at just over a tonne. Even the average US sedan weighs around two-thirds more. Outside of some enthusiasts importing tiny vehicles like the kei cars, nothing at that weight is sold here today.
Prior efforts to lure Americans with the joys of the diminutive have largely foundered.
Mercedes-Benz Group AG withdrew its Smart car after 2019, noting a “declining micro-car market” in North America. Less than 2,000 Fiat 500s have been sold in the past year, according to data compiled by Bloomberg Intelligence.
It is not merely that US tastes run toward trucks and sport utility vehicles (SUVs), self-preservation plays a role.
If you have to share the road with a Ford F-150 or an even heavier beast like a Hummer, both cranking out hundreds of horsepower, driving a small car, let alone a micro car, can feel like playing Russian roulette with a steering wheel.
In professing his admiration for the kei cars, Trump notably directed his Transportation Secretary Sean Duffy to get them approved, since they don’t currently meet federal safety standards.
I’m going to venture that an advertising campaign built around tiny vehicles wouldn’t be worth the cost of a Superbowl spot when freeway travel is either not allowed or not advisable, the feds have granted exemptions to safety regulations, and the seating might be floridly described as “intimate”.
This is not to dismiss the idea of smaller, more efficient vehicles in general; like better public transit, the United States would benefit from their widespread adoption.
But if many American drivers suffer persistent anxiety about the range and utility of another novel class of vehicles, electrics, it is tough to see them suppressing their misgivings to squeeze into nano-mobiles.
More importantly, who is going to build them?
Models imported from Japan would face shipping costs and tariffs, eroding some of the cost advantage; probable modifications to meet even relaxed federal standards would have the same result.
Moreover, Trump would presumably want them made in the United States, and the faces of the assembled auto executives when he turned around from the Resolute Desk urging them to begin production had all the studied impassiveness of a poker player with a botox habit.
US manufacturers, particularly Detroit, barely make sedans any more because their economics demand selling heavier, premium-priced trucks and SUVs with as many bells and whistles as they can cram in. Indeed, that was the essential subtext to Trump relaxing fuel-economy standards in the first place.
As I wrote here, the promised savings for consumers are highly dubious and the signal to automakers is to push even more heavy, high-priced gas guzzlers to raise margins, not the smaller models where they make little to no money.
Yes, Ford Motor Co wants to build a lower-priced electric truck and startup Slate Auto aims to do something similar with a modular vehicle.
But they are, for now, not available and the mooted prices are closer to US$30,000 than the mid-teens.
There is, of course, a very Trumpian dissonance to, on the one hand, slashing fuel economy standards to facilitate more truck sales while also calling for the introduction of kei cars lauded for their lower fuel consumption.
Within that noise, however, there is a signal. In making his pitch, Trump said this kind of vehicle “really gives people the chance to have a car”. Yet, like Walmart Inc’s “cheaper”, but smaller, Thanksgiving meal, these cars would be affordable only if you ignore their lack of attributes that most drivers regard as standard.
What better way to illustrate the structural cost-of-living problem than to try to sell Americans on the idea of simply making do with much less. — Bloomberg
