The Washington Post points to a rapid change in the way Americans are buying cars. Apparently Americans are ditching their guzzler trucks and SUVs for smaller cars after fuel price hikes and artifically spiked summer sales through ‘employee pricing for everyone’:
While small car sales are helping to lift the Japanese automakers,
Detroit’s General Motors Corp. and Ford Motor Co. are sinking under the
weight of large sport-utility vehicles, once the industry’s cash cows.
The two automakers have reported substantial slides in profits in their
North American operations this year, and their bonds have junk status
on Wall Street. The interest in small cars has caught the two
automakers unprepared, said Dave Healy, an auto industry analyst at
Burnham Securities Inc. in New York.
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No surprises there, then. Who among us could not have seen this coming in, say, 1999? Detroit, for one: caught with its pants down for another generation. Heck, I even wrote about it in 2000.
This is a problem with the bean-counter-driven mentality of business there. Sure, while sales of minivans and SUVs are hot, the companies got complacent. Let the dollars roll in. Meanwhile, Toyota comes in with the Prius, and Honda with its Insight and Civic Hybrid, and Detroit is scrambling again.
The price of gasoline is less to do with Red China’s growth than the one area which the US has become less efficient in: gas mileage. In the last five years, it’s become godawful, and anyone breathing in smog in LA and NYC will vouch for that.
Chrysler of Stuttgart (or wherever, but it ain’t Auburn Hills) has the Neon and the Caliber, but that’s it. Ford’s car range is looking pathetic with the last-generation Focus still on sale, and the Mazda 3 (which is, admittedly, pretty good). GM can bring in product from Daewoo, but the smaller Saturns and Chevrolet Cobalt aren’t exactly brimming with Jap-beating technology.
Will Toyota overtake GM as the world’s number one automaker? Bets on for 2005 that it’ll happen.
America’s solution is to innovate, innovate, innovate, not put a canopy on an ancient truck and tell us it’s sporty.
October 5th, 2005 at 12:24 am
Thanks for the comment
October 7th, 2005 at 10:29 am