The Big Three automakers from Detroit were focused on gas-guzzling SUVs and pickups which had been extremely profitable and popular for decades. Ford has relied on the strength of its F-150 pickup truck for more than half a century. The F-150 has been the best selling vehicle in the U.S. for 26 years, but the outlook is rather gloomy.
Recent sales trends show that the F-Series as well as similar gas-guzzlers are on the decline. There are two major reasons for the weak sales of trucks. Many house owners have a reduced ability to finance car purchases and have to save money due to the housing slump. And even those who actually could afford buying them are more conscious about gasoline consumption with gasoline prices heading for new records. They’re postponing purchases and wait until car makers come up with new models with better mileage. Incentives and discounts didn’t help to stop car sales from declining and as a result, neither GM nor Ford nor Chrysler are profitable right now. Even worse. Analysts don’t rule out that a major auto maker could collapse and seek for bankruptcy protection. Since 2006, more than 100,000 jobs were cut in the auto industry and compact efficient cars from Asian competitors have jumped into the top 10 of the best selling cars in the U.S. Undoubtedly, the market has shifted from trucks to cars. Jesse Toprak, a market researcher, called the current development “one of the most rapid sea changes ever for the auto industry “. Fuel economy matters more than anything else today. Therefore, Asian car makers outsold the three Detroit car makers for the first time ever. Rick Wagoner realized that there’s no relief in sight and that GM has to tap into the needs of the people or there will soon be no market for their products anymore. He said: “These prices are changing consumer behavior and changing it rapidly…” “We don’t believe it’s a spike or a temporary shift. We believe it is permanent.” GM considers selling its Hummer brand and announced that it would shut down four assembly plants in North America that produce SUVs and pickups. Besides, GM has already begun to adjust its product lineup and they hope that the Chevrolet Volt semi-electric car which is expected to go on sale in 2010 will turn out to be the saving grace. Next to spending large amounts of money on the development of alternative fuels, GM and Ford are already bringing fuel-efficient vehicles from their European subsidiaries to the U.S. Chrysler in contrast, has no profitable subsidiary company which produces fuel-efficient cars and unfortunately, Chrysler has very little experience with compact cars or fuel-saving technologies. Though Chrysler is the latest major automaker to start the development of an own electric car as Chrysler has a strong reliance on SUVs and pickups which account for more than 70% of its total sales, the market has finally prompted Chrysler to change the direction. A spokesman said that Chrysler is planning to launch all-electric cars within the next 3 to 5 years. The Chrysler Envi will run on electricity taken from lithium-ion batteries for 40 miles. ENVI is a new organization within Chrysler which is focused on the development of electric vehicles. Chrysler desperately needs a new product lineup, but it is to be seen whether Chrysler will survive until its new energy-efficient vehicles can go on sale.
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