Auto Sales Down

Interesting numbers from a CNN report for the top auto manufactures:

GM sales down 18.2% (-16% SUVS, -21% cars)
Toyota sales down 21.4%
Ford sales down 28% (SUVS off more than 50%)
Chrysler sales down 36%
Nissan sales down 18%
Honda sales up 1%

It is interesting to see these results as each manufacture had different circumstances.

Toyota, with the Prius, feel short in sales because they could not meet demand for their fuel efficient cars.
Ford, wanted to capture the SUV market and as a result they are paying the price with no real good non-suv cars in their lineup to compete with others.
GM, similar to Ford, however, their crossovers are desirable but GM underestimated demand.
Chrysler, they just don’t have any competitive cars in their lineup.
Honda, the one auto manufacture that has it right.

Even with these differences, one thing does seem in common, they all did not want to change production to more fuel efficient cars. For many years now, it would seem everything was pointing to higher oil prices and greater demand for fuel efficiency except for one thing. You-the consumer. You can claim conspiracy theories all day long, but what truly drives these companies is demand and the dollar you spend.

Think about, if you are Ford, why would you experiment with a hybrid when you have a very large share of the SUV market? You know for every factory, every employee, and every marketing dollar you spend you will sell x-number of cars (pending any unforeseen event). If you devote more resources to Hybrids, you in effect reduce your earnings. The market will penalize the company in the short term (long term may work out, but that is a hard sacrifice at times). It does not mean they can’t experiment or have small production runs, it just means they will not shift major resources to develop an unknown product. This happens everyday in many corporations, development moves forward but will always be second to what is tried and true.

Now, oil has hit unseen levels and consumers are, in mass, changing their buying habits. No longer is the SUV the car of choice and as a result you will see a very quick technology improvement in fuel efficiency from all auto manufactures as well as factories lowering SUV production in exchange for non-suv cars.

For all the executives in Toyota, GM, Ford, Chrysler, and Nissan that pushed for larger production in fuel efficient lines but were denied resources or funding, they can finally all say I told you so.

But let this also be a lesson to consumers. You direct how the companies proceed! If Americans wanted a car that gets 100MPG 10-years ago and everyone pushed, we would have them. However, when everyone says “oh that would be nice to have a car that gets 100MPG” as they buy their escalade or hummer, change will not occur or at least at a rapid pace.

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