Here’s the low-down on the automotive industry here in the good ole’ USA. The market has changed. With oil reaching an all time high last month of almost $150.00 per barrel and gas breaking the $4.00 mark for regular unleaded for the first time in US history, Americans are clamoring for fuel-efficient, smaller vehicles. What does this mean for Detroit’s big three? Let me tell you what it means. Ford, GM and Chrysler do not have what consumers want so Americans are going to the import automakers in droves to fill their demands.
The shift in the US auto market is evidenced by last month’s sales and second quarter profits just released this week. GM’s sales were down last month by 32% with a loss of $15.5 billion in the second quarter, yes that is billion not million. Ford Motor Company’s sales were down last month by 19% and had a loss of $8.7 billion for the second quarter. Chrysler’s sales were down by 34% and Chrysler has totally stopped leasing vehicles in an effort to stem the tide of red ink at the new privately held company by Cerebus Capital Management. Let’s put this in a crazy perspective, looking at GM’s rate at which they are losing money.
$170,329,670 a day.
$7,069,069 per hour.
$118,284 per minute.
$1,971 per second.
That is just crazy. Either the big three will change with the market and give consumers what they want or they will cease to exist. After all how can a company, no matter how big they are, continue to absorb losses in billions measured in quarters of a year?
I must say I am rooting for the big three. The American automotive industry has literally shaped the industry ever since the car was invented and it would be a travesty if America’s big three were to go the way of the dinosaur. So get it together Ford, GM and Chrysler. Give us some cool new, fuel-efficient cars and you will be around for another century. The US needs you, no the world needs you!
Out of Park & in to Drive,
Auto Analyzer
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