Tuesday, January 08, 2008

CAFE 35 Claims a "Victim"

by Tom Bozzo

GM has canceled its V8 engine for luxury cars, i.e., Cadillacs. I'd always thought putting 300-hp engines in cars that senior citizens drive 15 miles per hour under the speed limit was a gross waste of resources.

As the story notes, Cadillac already can't sell its existing V8 in the model where a V6 is offered as the base engine — the six and the eight offer very similar performance but dissimilar cost and fuel economy. This is somewhat true of other manufacturers' product lines, too: a BMW 550i barely outruns the 535i and gives up 3 MPG or so for $8,000. Uptake on the 550i peaked under 15% of U.S. 5'er sales before the late run-up in fuel prices.

In bread-and-butter markets where fours are the sensible alternative to increasingly overpowered sixes, something like 75% of buyers take the four, but status races are driven by the upper fractiles of the distribution.


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