Why Mopar was a racing success and dealership failure

[wiging19]

In the late sixties the quality of chryslers were a real issue.  My Uncle had always bought Chrysler every two years and there was a stretch in the late 60's where the family cars just sucked on quality.  You see the same issues today on the crate engines.  You spend $20K on a crate hemi and have to go through the engine to be sure it doesn't explode because quality controls are an issue.  You don't mind paying more for quality but you don't like paying a third more for an inferior product.  Just my five cents based on the conversations I overheard as a kid.  

[zerfetzen]

Hi Lunchbox,
I'm not really disagreeing with you because I don't know what I'm doing since I'm not an economist, but here's what I come up with...

I think they say the average inflation tends to be around 2.5% - 3%.  Let's go with 3% to go with the higher estimate.  There's 37 years between 1970 and 2007, and a 1970 Dodge Challenger cost $3,000, so:

$3,000 x 1.03^37 = $8,955.68 ...according to Excel.   

Using the same logic, that $200 difference in 1970 should be about $597 difference now.

The problem, of course, is that the modern cars are probably closer to around $25,000 for the base mustang and $30,000 for the base challenger.  After controlling for inflation, why is the price of cars so astronomically high now?  And with all the cheap foreign-made plastic parts nowadays?  I guess it's the on-board computer, cruise control, overhead cam crap, catalytic converter, airbags, anti-lock brakes, cost of using wind tunnels, massive money in advertising, marketing research, etc., etc.

I'd be much more tempted to buy a modern version that is brand new for about $10,000, like this shows though, minus all the other crap.

As a sidenote, this formula suggests that prices double roughly every 23-24 years, assuming no other factors affect the product.  This seems to hold true for simple products, like the price of movie tickets.  Just my 

[Katfish]

  

... And the new Mustang will be cheaper than the new Challenger. Does anyone see history repeating itself? 


  Mike

I agree, Mopar was, and still is late to the game.  I bought a new Mustang and love it!  Why wait 2yrs for Mopar to make a bigger & more expensive Challenger?  Just like in the 60's, by the time they get the car into production, Ford will already have sold tons.  The aftermarket starts making add-ons for the highest volume cars, and the cycle continues.

[BIGSHCLUNK]

Why wait 2yrs for Mopar to make a bigger & more expensive Challenger?  Just like in the 60's, by the time they get the car into production, Ford will already have sold tons.  The aftermarket starts making add-ons for the highest volume cars, and the cycle continues.

 

[Lunchbox]

Hi Lunchbox,
I'm not really disagreeing with you because I don't know what I'm doing since I'm not an economist, but here's what I come up with...

I think they say the average inflation tends to be around 2.5% - 3%.  Let's go with 3% to go with the higher estimate.  There's 37 years between 1970 and 2007, and a 1970 Dodge Challenger cost $3,000, so:

$3,000 x 1.03^37 = $8,955.68 ...according to Excel.   

Using the same logic, that $200 difference in 1970 should be about $597 difference now.

The problem, of course, is that the modern cars are probably closer to around $25,000 for the base mustang and $30,000 for the base challenger.  After controlling for inflation, why is the price of cars so astronomically high now?  And with all the cheap foreign-made plastic parts nowadays?  I guess it's the on-board computer, cruise control, overhead cam crap, catalytic converter, airbags, anti-lock brakes, cost of using wind tunnels, massive money in advertising, marketing research, etc., etc.

I'd be much more tempted to buy a modern version that is brand new for about $10,000, like this shows though, minus all the other crap.

As a sidenote, this formula suggests that prices double roughly every 23-24 years, assuming no other factors affect the product.  This seems to hold true for simple products, like the price of movie tickets.  Just my 

Your future worth analysis is the correct formula  FW=(1+i)^n however your inflation rate may be a little low. Here are the values from 1969 to 2006. I used 69 since most cars were purchased late 69 to early 70.

U.S. Retail Price Inflation 1969-2006
1969 = 5.5%
1970 = 5.7%
1971 = 4.4%
1972 = 3.2%
1973 = 6.2%
1974 = 11.0%
1975 = 9.1%
1976 = 5.8%
1977 = 6.5%
1978 = 7.6%
1979 = 11.3%
1980 = 13.5%
1981 = 10.3%
1982 = 6.2%
1983 = 3.2%
1984 = 4.3%
1985 = 3.6000000000000005%
1986 = 1.9%
1987 = 3.6000000000000005%
1988 = 4.1%
1989 = 4.8%
1990 = 5.4%
1991 = 4.2%
1992 = 3.0%
1993 = 3.0%
1994 = 2.6%
1995 = 2.8%
1996 = 3.0%
1997 = 2.3%
1998 = 1.6%
1999 = 2.2%
2000 = 3.4000000000000004%
2001 = 2.8%
2002 = 1.6%
2003 = 2.3%
2004 = 2.68%
2005 = 3.4000000000000004%
2006 = 2.2%

If you average the rates above and insert them into the equation you get an average inflation rate of 4.58% with at FW value of $1001.05 in 2006 equal to a PW value of $200 in 1970

You can also use the Governments consumer price index at http://data.bls.gov/cgi-bin/cpicalc.pl which gives you a value of $1099.53 which is close to a different inflation calculator I used in the first example.

[hemi71]

Hi Lunchbox,
I'm not really disagreeing with you because I don't know what I'm doing since I'm not an economist, but here's what I come up with...

I think they say the average inflation tends to be around 2.5% - 3%.  Let's go with 3% to go with the higher estimate.  There's 37 years between 1970 and 2007, and a 1970 Dodge Challenger cost $3,000, so:

$3,000 x 1.03^37 = $8,955.68 ...according to Excel.   

Using the same logic, that $200 difference in 1970 should be about $597 difference now.

The problem, of course, is that the modern cars are probably closer to around $25,000 for the base mustang and $30,000 for the base challenger.  After controlling for inflation, why is the price of cars so astronomically high now?  And with all the cheap foreign-made plastic parts nowadays?  I guess it's the on-board computer, cruise control, overhead cam crap, catalytic converter, airbags, anti-lock brakes, cost of using wind tunnels, massive money in advertising, marketing research, etc., etc.

I'd be much more tempted to buy a modern version that is brand new for about $10,000, like this shows though, minus all the other crap.

As a sidenote, this formula suggests that prices double roughly every 23-24 years, assuming no other factors affect the product.  This seems to hold true for simple products, like the price of movie tickets.  Just my 

Not to be picky, but a Challenger R/T would have set you back at least $3500 in 1970, and a fully loaded hemi would be hitting the 4500-5000 mark.

I bet at least 20% of the higher costs of new cars goes towards liability insurance/risk protection in todays sue-happy enviroment.

[zerfetzen]

Yeah, I picked the base models (mustang, camaro, and challenger) to compare, rather than the high-end models, but of course any way to slice it works.  As for the inflation rates, same thing, different ways to slice it.  I took that list, put it in Excel, and took the median value, which was 3.6%, guessing that the median is more representative than the mean, because the distribution is not symmetrical, especially with an outlier like 13.5%.  In any case, it's funny though, guess I'm getting old, because I could've sworn the standard typical inflation rate was 2.5%-3%.  Good stuff any way you look at it though.  Cheers.

[rallyechall]

This answer may get me in a lot of trouble with everyone, but the way I see it, We still don't have any type of performance car aside from the Viper. This is the only car with a performance motor. The hemi is now a mainstream motor that is resting on its reputation. We all know that horsepower was measured differently back in the 60s. The hemi, properly tuned, could see 600 hp. I recall this article from an old Mopar magazine. There is no performance like that from Chrysler and hasn't been since the 1978 Li'l Red Express, and that wasn't nearly comparable to the performance from the late 50's to early 70's motors. I am sad to say that Chrysler still builds for the more mature market. The charger has become a four door. It was once pride of our fleet. We are driving sedans with sticker packages. The Prowler, though I like the styling, is not a performance vehicle. It was just different. Why couldn't it be optioned with a V8? This was always our way of doing things. The cars that will make them are priced so far out the average consumers reach. Ford and GM have the pricing structure more in line than Chrysler does. I hope I didn't offend anyone especially Prowler or Charger owners. This just stems from my frustration of wanting to purchase a new car (Challenger), but I cannot justify paying the outrageous amount of money they want for it, or for any other car they sell. They do not cater to the right market.

[HemiOrange70]

Well......Chrysler fit and finish was not as good as the Ford and Chevies. Ford and Chevy also came to the muscle car era with GTO, Mustang, Camaro, Vette, Firebird, etc. Chrysler had the valiant-cuda. The Charger was nice but big. They never had a real muscle car until 70-too late in the game. Yes the road runner was a big hit. The remodelled barracuda was not enough. Dodge had a quality problem, it nearly cost them the business until Lee Iaoccoca saved 'em with the k car and minivan, and when you think of  the first ones of those, you think cheap-don't ya :bigsmile:The problem then was chrysler put the future into big cars and the gas crunch almost killed them, they had nothing to compete with ford or chevy. Now-Chrysler is coming out with forward thinking cars-Charger-nitro, caliber viper, pt cruiser, etc.and the only big 3 auto maker to make a profit last year

[MJS73]

After controlling for inflation, why is the price of cars so astronomically high now?

Factor in all of the safety and other add-ons required by government regulations, (crumple zones, air bags, etc.) in addition to all of the technology to get higher fuel mileage and you start to incur some real costs.

We still don't have any type of performance car aside from the Viper.

0-60 in under 5 seconds (Charger SRT-8) or under 6 seconds (Charger R/T) is a performance car in my book.  And this is factory stock.  Some of the comments I've seen about the original Hemi talk about tuning it.  Not necessary today.

Remember that the street Hemi added 1/3 of the cost of the car to a Challenger.  It's much more cost-effective today.

Mike

[71bigblock]

Factor in all of the safety and other add-ons required by government regulations, (crumple zones, air bags, etc.) in addition to all of the technology to get higher fuel mileage and you start to incur some real costs.

0-60 in under 5 seconds (Charger SRT-8) or under 6 seconds (Charger R/T) is a performance car in my book.  And this is factory stock.  Some of the comments I've seen about the original Hemi talk about tuning it.  Not necessary today.

Remember that the street Hemi added 1/3 of the cost of the car to a Challenger.  It's much more cost-effective today.

Mike

Very good points!   

[zerfetzen]

0-60 in under 5 seconds (Charger SRT-8) or under 6 seconds (Charger R/T) is a performance car in my book.  And this is factory stock.

Although I've drooled over the new Challenger like anyone else, the more I think about things, the more I like the new Charger SRT8 for a practical everyday driver.  A lot of ponies, aftermarket options, more room, good weight (in my book, meaning safety).  My only complaint is they're all automatics...but then again, they already have an aftermarket manual conversion kit.  Hmmm.  Now if I could just afford it.

 

[moparnut]

The PT Cruiser is another example,Its bassically a Neon and when they came out were selling for twice their value,dealers would even have waiting lists and sell them over the MSRP by thousands.Sure Ma' Mopar stuff is unique nowadays and we are still paying a mint for desireable cars,Nothing has changed.

[moparnut]

Here's an inflation calculator to see what things cost then,are worth in todays money

http://www.westegg.com/inflation/