Auto Makers Knew This Day Was Coming
Sales Are Up
Automobile sales are down across the markct. But Toyota and Honda are gaining market share in tough economic times. Over all auto sales are down 14.5% compared to June one year ago. Because of Prius sales Toyota’s sales are down 11.4%. Honda’s Insight has held them up to only a 7.1% decrease in sales. The point is that while many manufacturers continued to invest SUV’s because of the high margins they failed to make inroads into the hybrid market. The challenge for struggling auto makers is now to make investments when cash is tight maybe even nonexistent.
Here we go into a new green economy. For those who say that moving to an economy that emphasizes the changes that will preserve the environment, I say look at the companies that are surviving in the most challenging environment in 80 years. Our present situation will reward those that are willing to make drastic change. The challenge is choosing the right emerging technology. But those that stick there heads in the sand are bound to fail.
Cheryl said:
Ford not only makes both a hybrid suv and a hybrid sedan, but it is in the process of converting an suv manufacturing plant into an all electric Ford Focus manufacturing plant….and they didn’t take any bailout money. I’m a fan!
July 7th, 2009 at 6:26 pm
John said:
I agree. They used some foresight. They are now reaping the bennefits.
July 10th, 2009 at 5:49 am
Mark said:
While I am no fan of government intervention in private industry, it is unfortunate that poor regulatory controls at the upper end of the financial services sector led to an economic downturn that caught companies like GM and Chrysler unprepared. It is pretty impressive that GM is ready to come out of of bankruptcy already!
Still, the wild swings in oil prices make it hard for companies to build the right products and carry the right inventory for the future. Toyota was selling the Prius at a premium last summer and this summer are discounting them.
It seems, that from a business standpoint the right move for Detroit is to spread the risk by building a balance of SUV’s, small cars and hybrids so they won’t get caught with their pants down. However, that is not the best thing for the environment, so I hope we’ll see more incentives for purchasing hybrids and more environmentally responsible vehicles.
Europe has seldom been “burdened” with cheap gas and excels in building small cars that get good milage. Thus companies like Fiat have been making a good living selling economical people movers.
Of course, they face all sorts of challenges in Europe with some French companies (Renault and Peugeot) getting subsidies from their government. Ford has done pretty well in Europe for many years thanks to the vision of Henry Ford II in the post WWII era. The car business is sure a tough one, but it has an enormous impact on both the economy and the environment.
July 11th, 2009 at 4:31 pm