General Motors (NYSE: GM) and other car makers will be reporting February car and truck sales throughout the day. GM's COO said February sales be "weak" in the U.S. with levels not seen since the early 1980s.This is interesting in light of the sales projections GM gave the government recently, along with its restructuring plan, as it tried to make the case for more government funds. So, which is it?
According to Edmunds.com, February overall (adjusted) sales decreased by 38.9% from February 2008, but increased 4.6% from January 2009. For GM, Edmunds is forecasting a 46.2% decline in (adjusted) sales from February 2008, but increased 8.4% from January 2009.
GM's CEO Rick Wagoner said the company's cost cuts will make it profitable in a car market of 11.5 million to 12 million cars, in which case it could return to profitability within 24 months and even pay its debt to the government by 2014. With Edmunds.com now projecting an annual rate of 9.3 million cars for 2009, how are any these assumptions realistic, as BusinessWeek asked recently. Indeed, many feel they may not be.
Only last week Federal Reserve Chairman Ben Bernanke said the recession could bottom in 2009 and start recovering after. But then Warren Buffett came out and said he expects the economy will be in shambles throughout 2009 and longer. Now, Dr. Doom, Nouriel Roubini, the most bearish of them all, who originally was forecasting an 18-month recession with a U-shaped recovery is "expecting the downturn to last at least 24 months and possibly 36-months," with perhaps a Japanese-style L-shaped stagnation.
If these predictions are true, U.S. vehicle sales may not recover for quite some time, and the car market could be in for an even worse and longer period than anyone is expecting. For GM it means that even if some markets are seeing a boost in sales, as a result of different government-sponsored incentive programs outside the U.S. (including a 14% year-to-year jump in Germany in February), its core market is still presenting a big challenge that GM will need to overcome to stay viable. The question is if it can, and right now it doesn't look like it.











Reader Comments (Page 1 of 1)
3-03-2009 @ 8:46AM
Donovan said...
Consumers have lost total trust and confidence in GM. As for GM's CEO Rick Wagoner. Only congress believes the lies this man spews from his lips. Until such time as Mr. Wagoner is FIRED as CEO of GM.
Consumers WILL NOT purchase enough GM made cars, to keep GM financially viable.
3-03-2009 @ 9:19AM
TW said...
If the media would back off the gloom and doom and some folks would step up and buy a car, things could be better.
3-03-2009 @ 9:26AM
jaqaliah said...
The problem is the Auto-industry abandoned teh bulk of Americans 15 years ago. They stated then they would only make vehicles for the UMC and above. They stated the rest would have to settle for used vehicles. Well, we do, and not from dealerships - we sell directly to each other. Now that they are out of the bulk of the market they wonder why they can't sell their overpriced over-teched boxes to people who cant afford them or to fix them. When they sell real cars for lower class Americans they will have a market again. As long as they are only interested in the selling to the upper 3% they deserve this.
3-03-2009 @ 9:33AM
martindawg75 said...
They rake GM and the other auto companies over the coals, but they give OUR money to banks and Insurance co.(AIG) without thinking twice...this is WRONG!! And for buying GM products...I'm looking for a new car and ALL I'm looking at is domestic products...and I have really been impressed! Don't listen to the hipe...but AMERICAN!!
3-03-2009 @ 10:08AM
BHarrison said...
I'd like to buy a new car but I do not know which manufacturers or models will survive throughall of this; and I do not want to buy a vehicle that is not going to be "supported" for parts and service.
The hybrid cars simply have not been developed to the point where they are inexpensive enough to buy . . . and "warranties" are only as good as the manufacturer's ability and willinglness to stand behind the warranties. And it is uncertain as to which manufacturers and models will be around in another two or three years.
Yeah, I have the cash to buy a car . . . but the problem is "which car should I invest that much money into"?
I vividly recall Geo Bush saying how things were going to "bounce back" and improve . . . that man should have been impeached for malfeasance and misfeasance.
Meanwhile I would buy a new car if I had the confidence as to which model to buy. It appears that an "assembled in the USA" Toyota might be the best selection; but even Toyota is having amjor cut backs.
CONGRESS is the MAIN CULPRIT in all of these problems. Congress enabled and allowed the FIs and the corporations to orchestrate and to perpetuate all of their FRAUDS to such an extent that it has totally undermined our entire economy.
Meanwhile the CORRUPT Congressmen and CEOs who are responsible for all of this are STILL IN OFFICE . . . they are trying to sell themselves as being "the 'leaders' of the recovery efforts". They should all be fired or recalled . . . recovery will not be successful with those guys running things.
Heck, it is so bad that I don't even know which car that I can afford to buy . . .
3-03-2009 @ 10:08AM
hemipwr54 said...
As I have said for some time , disband the UAW blood suckers , American's will buy cars and trucks again , no one wants to be paying themselves back for a loan to a rich and wasteful company .
If the UAW had just not struck for more money those 3 or 4 years before GM might have made it .
Goodbye UAW , time to go , you are no longer needed in todays society !
3-03-2009 @ 10:34AM
jody said...
I just offered a used GM dealer loan value on a s10(I have 5 sitting in my yard right nowI like them) but, he said no he has more than in it.I told him how stupid he was and I know how the game works..Just goes to show you why they are failing !!
3-03-2009 @ 11:07AM
jody said...
I just tried to but a truck at loan value, because thats all its worth, but the dealer said no.Thats why they are failing !!
3-03-2009 @ 10:34AM
Howard said...
I would love to buy a new car. But they have to show a car which is reasonably priced and fuel efficent. The auto manufacturers need to get out of bed with the oil companies and start to work for the people who built them in the first place "the American people". The American people need to start to buy American, we are not going to get our house in order until we elect responsible people and support our own. America First !!!
3-03-2009 @ 10:43AM
TW said...
Jody-you give a lowball # to a dealer and he can't take it because your offer is too low and you call him stupid?
If the car industry goes down the aftermath will be like something never seen before. Millions of jobs are tied directly and indirectly to the car biz. I agree the folks behind the wheel of the big 3 lost their way. I agree the loans aren't the most appealing way to fix it, if it can be fixed. But I assure you letting those companies sink is not the solution.
3-03-2009 @ 12:25PM
jody said...
Tw,Thats wht got everyone body in this mess buying crap that was over priced.I will never buy anything over loan value again
3-03-2009 @ 11:27AM
jim johnson said...
I have been a loyal GM buyer for over 30 years. But with the customer service on my last visit to a dealership, I have bought my last GM product. after the dealership didn't want to stand behind a defective part, I went to the regional level only to be told the same thing.
With this kind of customer service I can see why GM is failing. Once they go bankrupt and all those employees are without a job, I can only hope they look back and reflect. Maybe in their new job they will pay closer attention to customer service, and not just give lip service!
3-03-2009 @ 11:43AM
TW said...
The way a dealership conducts its business and the way a mfg conducts its business have NOTHING to do with each other. The fact your guy would not take an offer on a used S10 has nothing in the world to do with the problems the industry is facing.
3-03-2009 @ 11:45AM
TW said...
All of you hoping the car industry fails remember this: There will be millions of people looking for a job-your job possibly.
3-03-2009 @ 12:56PM
garycarlanel said...
I am in the car market, just drove a 09 Malibu very impressed, quite, it had the 4 cyinder, I thought it was the V6, 30 mpg the 6 speed auto gets 33 mpg, fit and finish excellent and interior perfect. So far first choice.
3-03-2009 @ 12:14PM
DON said...
KEEP BAILING THEM OUT I STILL CANT BUY THEIR CARS AT THOSE HIGH PRICES BAIL ME OUT THEN I MIGHT BE ABLE TO BUY ONE
3-03-2009 @ 12:22PM
fordf350va said...
Sorry, but I gave up on the U.S. auto industry in 2004. My beautiful 1995 Ford F150 pickup would only give 15 mpg. With fuel prices going up I had to give it up. The replacement was a 2000 Nissan Frontier, 4 cyl 24 mpg. We also got a 2005 Nissan Xterra a year later, 4.0 L 6 cyl. It gets 23 mpg. My uncle had an 06 Ford Ranger pickup, 4.0 L 6cyl, and what did it give? 15 mpg. Sorry, I'm done with that kind of stuff.
By the way, both of the Nissans were made in Tennessee. I'm sorry Detroit, you lose.
Norman Prevatte
Stafford, VA
3-03-2009 @ 1:27PM
donut999 said...
there is a still a car business in the u.s..
it just doesn't start with the letters g, c,
or f. it is toyota, honda, nissan, bmw,
etc.. these companies make cars here
and have been for a long time. yep,
they bring in many parts from offshore, but they spend money on a lot of goods,
services and labor in marysville and
georgetown, too.
what is the definition of a foreign car today? a ford f350 made in mexico or a bmw x5 made in spartanburg, sc?
you have to be a viable business to
survive. the domestic cars have im-
proved leaps and bounds the last 10-
20 years and are much more competetive
than they used to be---but the cost
structure disadvantage on labor, bene-
fits, nutso work rules, etc. are just
putting them out of biz. they may not come back from the ashes of bank-
ruptcy, but it is the only option for
survival. why prolong it?