When the "cash for clunkers" program ended, the auto industry was cast adrift and sales fell off dramatically in September.
Here are the numbers:
- Ford Motor Company (NYSE F) fared best with sales down only 5%.
- General Motors and Chrysler's sales were down 45%.
- Overall sales were down 23%.
- On an annualized basis sales dropped to 9.2 million vehicles.
- Sales for the three major Japanese auto makers fell from 7 to 20%.
- The only big winner was Hyundai with sales up 27% in September.
Both GM and Chrysler are restructuring their companies. The key question is: can the two make money with sales at these depressed levels?
Morningstar analyst David Whiston said that the auto industry would face continued uncertainty in the months ahead. "With no customer stimulus, you have a weak consumer who is reluctant to make big ticket purchases unless they have to. . . . It's not just a Detroit problem."
Chrysler's chief, Sergio Marchionne said: "The future is going to be a lot better."
GM is sticking with its plans to increase production in North America by 20% in the fourth quarter. GM has launched an aggressive ad campaign stressing that it is still the largest auto make in the U.S.
Separately, Edmunds, an auto tracking firm, said that the average discount was $2,557.00, down 12% from a year ago. These numbers are followed closely to determine the pricing power and the pressure to move inventory.
Do you believe that GM and Chrysler will survive this downturn in sales?
Reid Hoffman: LinkedIn will go public (at some point)
Retailers can't wait for Black Friday, open Thursday
Tiffany's serves up solid quarterly earnings
Reader Comments (Page 1 of 1)
10-02-2009 @ 10:21AM
Aaron said...
Chrysler will survive because of the backing from Fiat. GM? Well, with the decisions they're making, I would give them a strong "maybe".
10-02-2009 @ 10:50AM
hsr0601 said...
The auto industry should not forget the bitter lesson from its bankruptcy. Automakers pledged change in direction before people and thereby barely received taxpayer's cash, but they are still doing nothing. The current "unsustainable" fuel price, which is projected to go even higher, has gone far beyond a hybrid level again as it did not deter the recession.
The auto industry needs to leverage the rebates of cash for clunkers as a stepping stone for a fundamental change as promised, not business as usual. I still think the densely populated countries are consuming such incredible natural resources right now that inefficiency as it is is not allowed any more.
10-02-2009 @ 2:08PM
ij70 said...
GM is too politically important (as in who UAW votes for) so it will be kept alive.