How long can the smallest of the Big Three survive if its sales keep plunging?
As I noted last month:
The 2009 sales at Chrysler were down 59.6% from 2005 and down 66.7% from 1999. So far (January-February) in 2010, Chrysler's sales are down compared to year to date through February 2009, despite the fact that this was Chrysler's worst year ever.
Change the the word February to March and you can say the same thing. The company is in free fall.
The only automobile manufacturing plant in California closed its doors for good yesterday. New United Motor Manufacturing, Inc., had been a joint venture of Toyota and General Motors. The move emphasizes the fact that the automobile industry is largely a region one in the United States, although one that has changed a great deal, off the radar screens of most Americans.
In 2008, "foreign" automakers made slightly more passenger cars (excluding light trucks and SUVs) in the United States than the Big Three U.S. automakers did. In addition to the third of passenger cars sold that were made by foreign automakers in the U.S., and third of passenger cars that were made by the Big Three in the U.S., another third were imported from outside North America.
Also, announced yesterday were new fuel efficiency standards that are supposed to improve fuel efficiency on vehicles by ten miles per gallon on average by 2016. Fuel efficiency for cars and light trucks has been stagnant since the last major regulatory push decades ago.
The business section over the weekend noted that GM is paying back $1 billion of government loans this month and plans to have all $6.7 billion that it borrowed paid back by June, at which point the U.S. government will still have the upside of a large equity stake in the company.
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