Plunging U.S. Auto Sales Tighten the Screws on Detroit

Robert Farago
by Robert Farago

CNN Money reports that Ford, GM and Toyota have all downgraded their forecasts for '07 U.S. automotive sales. Ford estimates total sales at 16.1m, GM pegs the number at 16.5m and Toyota reckons it's 16.3. In any case, the stats compare with last year's 17.1m sales. The downturn puts GM between a rock and a hard place; the company's inventories are high and they're set to crank out more vehicles in this year's third quarter than they did in '06. As reported here, GM faces a stark choice: up incentives (killing margins), cut production or… both. While GM's spinmeister Paul Ballew danced around the looming nightmare, Ford's $25m man made no bones about the need for realism. "The most important thing is to get to the real demand. We don't want to drive demand with big incentives. All you are doing is pulling it ahead, so we need to get to the real fundamental demand, and have the vehicles priced for the demand." Meanwhile, Toyota's sitting pretty. Declining market be damned; they reckon they'll increase '07 U.S. sales by five to six percent.

Robert Farago
Robert Farago

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  • Hltguy Hltguy on Aug 09, 2007

    GM announced within the past hour they are upping the incentives in August, particularly on their trucks. Los Angeles Times automotive section on 8/8/07, brand new PT Cruisers with AC and CD: $10,990.00, new PT Crisuer "Touring edition" with Automatic, all power, according to the ad, "over 50 in stock" all priced at $13,800.00" MSRP: $18,980.00. Therefore a new fully loaded PT Cruiser can be had for nearly 30% off the sticker price. No wonder BK is looming in their future

  • Johnster Johnster on Aug 09, 2007

    And let's not forget the wonderful sales and service experience. It's so awful that people, who would otherwise buy a new car, hand on to their cars until the wheels fall off.

  • Taxman100 Taxman100 on Aug 09, 2007

    Most of the new cars are too heavy, and too full of a bunch of electronic technology crap that will cost a fortune to fix once the car hits 10 years old. To avoid it, you have to buy a little crackerbox car. I'll hold onto my Grand Marquis and my wife's old Corolla a while longer. The new car buyer is a short term owner - which is why they sell the crap they do.

  • Borderinsane Borderinsane on Aug 10, 2007

    I have never been a fan of Toyota's design language: It is pedantic; derivative of other automakers' work; and mostly, just plain boring. Though, I *AM* a fan of the TPS (Toyota's production system). A -6% (17mln to 16mln) market shrink would be more easily handled by TPS than it will be by the other automotive manufacturers selling in the US. More model refreshes, common platforms, flexible model and volume mix at assembly plants, build to market demand philosophy, (mostly) satisfied employees and suppliers, legendary quality, and (not least important) customers satisfied with the Toyota owning experience returning to dealers lets that company kick our Big ~2.8's rear ends.