General Motors Corp. (NYSE:GM) says it has cut $9 billion in annual costs. Ford Motor Co. (NYSE:F) is working on lowering expenses by over $5 billion a year. DaimlerChrysler AG (NYSE:DCX) has sent German executives to the U.S. Chrysler Group to try to take $1,000 in expenses out of every Chrysler vehicle. Inventories for The Big Three are so high that dealers do not want to take new cars, even the 2007 models.
Now, industry analysts are worried that 2007 annual car sales could fall well below estimates from GM and Toyota Motor Corp. (NYSE:TM). The two big car companies are forecasting U.S. sales next year at 16.5 million [subscription required].
Trouble in the U.S. housing market, especially in big states like California, could cut sales to 16.2 million units, according to some industry experts. Toyota may be effected because California is a key sales territory in the U.S. The Japanese car giant, however, has the financial resources to weather the trouble.
If sales slow, the company that may be hurt the most is Ford. There is already talk of its bankruptcy. The company itself is saying its market share in the U.S. could drop as low as 14%. What if that 14% share is one of a shrinking market?
Ford execs may have to go back to the drawing board once again.
Douglas McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
11-27-2006 @ 9:58AM
Icheb said...
"Toyota may be effected because"
A F F E C T E D. Thank you.
12-06-2006 @ 9:42PM
Howard Siegel said...
The only way out of this morass for Ford is to garner a niche and be the only car company that makes ONLY hybrid vehicles. When Subaru realized that it was getting nowhere fast, it carved its niche as the only all wheel drive auto maker. This may be the only way out for Ford, however,corporate culture being what it is will undoubetedly, continue to approach its problems like a deer caught in the headlights.