Something I haven’t seen in your socionomic trend observations is the phenomenon of muscle cars. It is certainly hindsight to point to 1966 and say that virtually everything that was coming in terms of muscle cars was introduced by the 1967 model year. Hemi Plymouths, L-88 Corvettes, 427 Fairlanes, etc. The muscle car phenomenon went for a few more years, with nothing stronger having been introduced, and ended rather abruptly in 1973 with the gas shortage. (The last real muscle car was the 1973 SuperDuty Firebird Trans Am) Then there was no muscle car worth thinking about until the (What!) 1987 Buick Grand National. Naturally the Crash of ’87 was after the ’88 model year was on the show room floors, and this would have included the Buick GNX, the highest manifestation of this particular era. (Insiders at GM reveal that there was a big putsch about a Buick outgunning the Corvette, a corporate no-no, but there is no denying that this car might have been the most phenomenal muscle car ever.) We had the Dodge Viper and various efforts by ZR-1 and Z-06 Corvettes to compete in the ‘90’s, but these cars were unaffordable to start with, and can’t be considered as muscle cars. But now look, we have the reincarnation of the Dodge Charger, with a 425 horsepower “hemi” (it isn’t really one), 400 horsepower GTO (It’s not one either, it’s an Australian car called a Holden Commodore, and it has a Chevy engine), and of course a new 400+ HP Shelby Mustang.
We have once again reached the practical limit of what typical drivers could want or handle in terms of power to weight ratios. Thus if you buy my connection between Detroit performance and national mood, you will see that we are going no further. People buy such cars when they feel things are going well, and there is money (and gas) to burn. This is ending, and like in the early ‘70’s cars are being advertised by their gas mileage, rather than their horsepower. I think this betokens another ‘70’s like era. Sales of cars drop off and “halo” models like the GTO disappear (it’s the end of the Holden GTO this year). My thinking is that at the 400+ horsepower level, which is now a commonplace, the cars are on the verge of being too much to handle for sales to the common man. In other words, there won’t be a 500 horsepower “muscle car” – these kinds of levels are for exotics only, which are driven presumably by people who know what they are getting into.
– John G. Dzwonczyk
In September 2002 when the popularity of muscle car collectibles reached a high level, The Elliott Wave Financial Forecast identified the phenomenon as a sign that social mood was passing through a gateway to a much larger bear market (see additional references below). We were wrong, however, when we said that the enfatuation with “muscle cars” wouldn’t linger for long. The plunge has been interrupted by a countertrend bear market rally. But look at what that rally has produced – whole new lines of muscle cars built in the image of the late 1960s, when a more speculative secondary peak to the Cycle degree peak of 1966 took place. As we said in September 2002, the demons of this bear market are of far greater strength, but they are matching the transitional stylings of the Cycle-degree turn in 1968-1970 in myriad ways. Sociotimes’s and EWFF have continually cited this parallel and explained its importance (see February 21, September 15 and July 15). As you say, the limits appears to be at hand. Here’s evidence of a closely related reversal, the size and popularity of Hummer automobiles is shrinking:
Trading the Hummer for a Honda
Luxury sport utilities are becoming decidedly less cool than just three years ago, when they were the hottest things on wheels and dealers had long waiting lists for the most popular models.
Fewer than half the people who bought luxury S.U.V.'s are going back for another one. Incentives for the vehicles are at record levels and for the first time, luxury automakers are paying out more for rebates and lease deals to entice consumers to buy luxury S.U.V.'s than to buy cars. Waiting lists that many dealers came to expect for the industry's plushest vehicles — which typically start at $35,000 — have largely evaporated, along with their buzz.
The New York Times, March 18, 2006
Smaller, Cheaper H3 Helping Fuel Hummer Sales
Orlando Sentinel, March 3, 2006
In many ways, the cultural landscape of the late 1960s represented a war between bull and bear market forces. This was as visible in the contrast between skirt lengths, which started to fall 1969, as it was in the auto world where the muscle car phenonomenon battled with the Volkswagon Beetle for supremecy. Eventually, the bear market’s was signaled by a victory for smaller cars. Remember the first Honda Civic? It came on the market in 1973, as the most serious phase of Cycle IV was starting. Here's evidence that demands of car buyers are at a very similar juncture:
Small Cars Gain Popularity Among Buyers
Today, the market has done an about-face. Small cars are some of the darlings of the industry; they're stylish, sporty, comfortable and, above all, they're in.
Small cars account for about 15.5 percent of the market and should improve their position to about 17 percent this year, according to the National Automobile Dealers Association.
The [Syracuse, NY] Post Standard, January 30, 2006
In a throwback to 1973, Honda plans to introduce a new subcompact known as the Fit. Several other car companies see the same opportunity. In fact, The Washington Post reported on March 5,that in addition to Honda, Nissan, Chevy, Hyundai, Kia, Toyota and Mazda will all introduce new small cars or substantial upgrades to older models within a matter of weeks. “It’s a fully declared small-cars war.” The surge coupled with the fact that engine sizes appear to reaching the physical limits suggests that an era of small car dominance has begun. As in the 1970s, it should be occumpied by a steady fall in real stock prices.
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