Friday, November 25, 2016

History of the New Model Year and Model Change

This article is from the Chicago Tribune and appeared in this morning's Dayton Daily News. I do not know either of the historians quoted but found the article fascinating and factual.


Automakers use the model year to distinguish new vehicles that feature the latest updates in technology, styling, creature comforts and options.
But why are new models born in the future, with model year 2018 vehicles introduced in 2016, for example?
Finding the answer is like finding Waldo.
There are a variety of theories on who or what initiated the model year. While Henry Ford helped create the auto industry in the early 1900s, a tip of the hat goes to the nation’s farmers for playing a role.
“The automotive model year started back in the teens. Farmers would harvest their crops and sell them every fall, and that’s when they had enough cash in their pockets to go out and buy a car. And that’s how the model year started, and eventually that’s how the fall introduction of new cars started,” said John Wolkonowicz, an independent auto analyst and historian in Boston.
Also contributing was weather.
“In the early days, assembly plants in Northern states had trouble with lighting and heating in the winter months,” says Bob Kreipke, Ford Motor Co. historian, “so they mostly produced in the summer months and then put the cars out for sale in the fall.”
Following World War II, the industry settled on Oct. 1 as the start of the model year, Wolkonowicz said, and it was subsequently recognized as the time new cars and new features arrived annually.
“The new model year in the ’50s and ’60s was designed to bring excitement in cars. Cars were shipped to dealers covered in canvas tarps, and dealer showroom windows were painted over to hide the cars until preview night. Dealers had parties in their stores on the night the new cars were shown for the first time,” Wolkonowicz said.
Thus the end of the year felt like a new year for cars.
Another factor that influenced the annual model change was federal safety, emission and fuel economy mandates in the 1960s and 1970s that forced automakers to not only focus on new technology and innovation, but on the timetables set to meet them. As government regulations increased, development costs skyrocketed.
“The cost of regulations is one reason the model cycle (from introduction to a replacement version) moved from what had been three years to what has become five to six years. And it’s why there aren’t as many new cars introduced each model year today as there had been in the past,” said Joe Phillippi, president of AutoTrends, a research and consulting firm.
The three-year model cycle meant modest changes and upgrades in each of three consecutive years before the vehicle was replaced with a totally redesigned next generation successor that prompted consumers to buy again. Critics called it “planned obsolescence” motivated by the desire to make lots of money.
“The industry needed time to develop the items to meet the regulations, because it takes more time to install a rearview camera than it does to simply add a tail fin,” said Kreipke, in defense of the longer model cycle. “The industry also needed longer time to make money on the vehicles after adding costly government-mandated systems. With a three-year cycle you wouldn’t reach break-even on the cost of regulations in three years. There’s a saying in the industry that the first vehicle off the line costs $20 million, and it takes at least three years to get that down to $20,000 so you can make some money.”
Since photos of new model year vehicles appear in magazines and newspapers, as well as being seen in person at auto shows months beforegoingonsale,thenewmodel year has lost some thunder but still attracts a special breed of buyers.
“There are buyers who purchase a new car at the start of the model year to be first with the newest before anyone else — like their neighbors,” said Phillippi. “This is why cars in showrooms at the start of the model run are loaded with all the options, because the industry knows the newest buyers are the type who will step up to pay to get the car first.”

2 comments:

  1. I remember the announcement date hype and waiting for insignificant changes. Longer design life cycles saved the manufacturers which lined the pockets of the top brass.

    Most buyers are not interested with design changes every 2-3 years as they are paying for them in 54-72 months.

    Finally, in-house LEASING companies are locked into a residual value when the 3 year lease is signed. Short and frequent changes would destroy their business as they would be less competitive. REMEMBER 1/3 of all cars sold are leased.

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