What Happened? 3 CRITICAL Reasons European Cars FAILED.

Europe has played a major role in the history of the automobile. European cars, were, in fact, the first modern cars, thanks to Karl Benz and the 1886 Benz Patent Motorwagen.

Throughout the 20th century, cars made in Europe were THE GOLD STANDARD for engineering excellence. Whether it be the dead reliability of the Mercedes-Benz W123, the enduring simplicity of the Volkswagen Beetle, the beautiful silhouette of the Jaguar E Type, or the invention of the modern supercar by Ferruccio Lamborghini with the Miura, Europe was long THE SOURCE for the world’s best automobiles.

So, when I was researching for another piece and looked at the BMW M4’s hideous design, I had only one question: What happened?

Failure to reliably integrate More complex Electronic components into their Cars

Why are European Cars irrelevant? Ugly, poor quality Products like the E65 BMW 7 series are among the reasons.
The car may be cheap…but there’s a reason for it. Dig around the BMWs electronics, and you’ll discover, BMW engineers never actually anticipated owners to keep their car beyond 300,000 kms of use!

Anybody that has owned a European car made within the last 25 years can generally attest that buying an example on the used market is a financially TERRIBLE idea. This is reflected by the fact that European cars, especially their largest, most advanced luxury sedans, depreciate faster on the used market than a falling rock, or the U.S. housing market stock circa late 2008.

Why is the depreciation on these cars so bad? Because after 10 years, the components on these cars tend to fail one after another (something I can personally attest to), and because these cars not only rely in imported parts, but are more complex, repair costs are significantly higher than cars made by American, Japanese, and Korean automakers.

Why are European Cars irrelevant? Because they failed to capture the hearts of younger buyers with new products
The Volvo 240 is widely regarded as one of the most reliable cars of all time…even it had problems with its (relatively few) electronic components.

Contrast that with vehicles like the Volvo 240 and the Mercedes-Benz W123. Both of these cars utilized minimal very computerized components, and are widely regarded as some of the most reliable vehicles ever made, yet even for these two cars, the common Achilles heel is the electrical system.

Why are European Cars irrelevant? Cars like the Volvo S60R that induce anxiety because of poor reliability are among them reasons.
My Volvo S60R was a fantastic car…when it worked. After doing the math on maintenance costs, over 2 years of ownership, I spent $20k JUST TO MAINTAIN THE THING!

Meanwhile, just 10 years after these cars ceased production, their successors in the class, the Volvo S60 and the W210 Mercedes-Benz E Class, are regarded as unreliable money pits that cost a fortune to maintain. Full disclosure, I previously owned a 2005 Volvo S60, and it was one of the biggest money pits of cars I have ever had, and I always worried about when it would break.

Did these automakers get any worse at making cars within those 10 years? Unlikely, but cars at that point needed many more computers. The only logical conclusion? European automakers never were able to adapt to the widespread use of computers in Automobiles without compromising the integrity of their products; beginning a long, slow descent into irrelevance. And even now? I never use the tech automakers build into the cars anyway, unless it is to turn it off!

Failure to respond to the rise of Japanese Automakers

Why are European Cars irrelevant? Lexus LS400 and the failure to respond to upstart competition
The Lexus LS400 caught Mercedes-Benz with their pants down by offering S-Class comfort, Toyota reliability, and a lower pricetag

At least in the U.S. market, the dichotomy in the market 50 years ago was as follows: If you wanted cheap vehicles that were inexpensive to maintain, you bought American cars, at the cost of reliability, though you did save money. If you were willing to pay more, you bought European cars. Those cars would be better built and more reliable, but you got vehicles that needed to be repaired less often, thus saving you time.

Why are European Cars irrelevant? Quality declines like in the W220 S Class Mercedes-Benz
With Lexus having made waves, how did Mercedes-Benz respond? By building the WORST car they ever made, the W220 S Class

The large scale growth of Japanese automakers worldwide completely disrupted the market. Here was an inexpensive, reliable, fuel efficient car that cost practically nothing to maintain, saving both time and money. How did European brands respond? Well, they never really did, such that by the early 1990s, European automakers were caught with their pants down.

Honda NSX | Rational Motoring
The Honda NSX did everything a Ferrari 348 did…but it actually worked and you could use it everyday. Plus, Ayrton Senna owning two of them certainly helped matters

The Ferrari 348 was a joke, being bested by the Honda NSX in reliability and performance. The Mercedes S-Class was being bested by the Lexus LS400, which offered similar levels of comfort and tech, but did so for a LOWER COST and HIGHER RELIABILITY. 

Meanwhile, cars like the Acura Legend were giving BMW a run for their money by creating sporty cars that had all the reliability prowess of Hondas, yet were comparable in features to cars like the BMW 3 series. 

What was European automakers response? Well, nothing, to be honest. Maybe go a bit downmarket to increase sales a bit, but was any effort made to address the root causes? None whatsoever. Which is why I can never recommend anyone buy them.

Failure to modernize the brand image

Why are European Cars irrelevant? Outdated brand perceptions like Ferrari
Ferrari suing Deadmau5 back in 2014 for trademark infringement for modifying his car in a way they didn’t like? Perfect…if your goal is to alienate an entire generation of potential fans and ensure your brands eventual demise.

Ferrari is a notable offender in this regard, but most European automakers, Jaguar, Mercedes-Benz, and Volvo among them, have failed where it matters most: in the eyes of the public. Never mind the fact their products are unreliable, expensive to fix, and expensive to buy. They also aren’t COOL. I mean, Ferrari is still to a degree, but the problem is that when I think of European luxury cars, I think of OLD PEOPLE. 

Why are European Cars irrelevant? They appeal mostly to old people
Less a car for a 25 year old, more a car for a 75 year old

Why is this? It is because these European cars have crafted an image of EXCLUSIVITY. How is that a problem? Well, for these older buyers that remember a time when European cars were the best in the world, this exclusivity makes sense, but as everyone and their instagram influencer sees them? That exclusivity looks increasingly tacky, especially as when I think of a younger buyer of a European Luxury or Exotic car, I think of a Dubai Oil Sheikh’s children who have more money than taste.

And once a brand loses the perception that owning them is a sign of taste, they have no future. And while the older buyers will prop up the brands for awhile longer, the truth is that for younger buyers, owning a Tesla is aspirational.

Why are European Cars irrelevant? Tesla has become the new status symbol
I may think that Teslas are garbage, but I can’t deny that Tesla has captured the hearts of younger buyers looking for a status symbol

Mercs and Bimmers? That’s their DAD’s car. Or worse, their GRANDPA’S car. That can never be cool. Plus, putting off an image of exclusivity calls to mind an era of private golf courses and Harvard legacy admissions. An era of old white men, old money; an era where discrimination was socially acceptable. That right there is a recipe for brands to have no solid future, especially in the contemporary political landscape.


European Automakers, much like Europe itself, risk seeing themselves relegated to being historical artifacts if they don’t accept that the market needs of customers have changed. Exclusivity? What is this, the 1920s? Private Country Clubs? More like “take it easy, the doctor says if you don’t, the arthritis will get worse.” High costs of purchase and more frequent repairs? Tough sell for both middle class customers whose wages have been stagnant for 50 years, and rich customers that value their time above all else.

What do you think? What does the future hold for European Automakers? Let me know in the comments below.

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