Bailout Watch 447: Bailout Backlash Hits ChryCo, GM Sales
Well, you knew it would. But does it really matter? Now that both Chrysler and GM depend entirely on federal tax money for their survival, who cares if they don’t sell anything? OK, back up. America’s zombie automakers need to sell enough vehicles to maintain some sort of credibility as “viable” companies. But then they can just use the federal “loans” to subsidize lower prices and keep moving the metal, as Chrysler has done. Until, of course, they can’t. Because the general public is well and truly fed-up. First, James Brown sang “Living in America” not “Paying Taxes to Support Detroit.” At the same time, the MSM’s “will they/won’t they file for C11” coverage has buyers nervous about American Leyland’s warranties and residuals. And the two failing automakers have decided to go radio silent on the whole issue (don’t want to scare the horses or queer the lobbyists’ pitch). Bottom line: falling sales and lost “consideration.” As documented by a survey of 40,000 car buyers over the last two months by CNW Research [via Automotive News, sub]:
Fewer new car shoppers are considering vehicles from General Motors and Chrysler LLC at a time when consumer attention is focused on their request for further U.S. government aid, according to a survey released today.
The share of car shoppers who say their primary choice would be a vehicle from one of the GM brands dropped by almost 12 percent, while the share for Chrysler dropped by a third, according to the study from CNW Research.
And more federal money will stop this trend how? In fact, Ford is already picking up from the itsgonnahappen.com failure of their cross-town rivals.
Ford Motor Co., the only U.S. automaker not relying on emergency aid from the U.S. government, has seen a nearly 12 percent increase in the share of car shoppers who say it would be their first choice.
Other winners . . .
“Hyundai and Kia show staggering increases in future consideration,” CNW said. “While that may be considered a distortion because they are starting with a low base market share, it is worthy of consideration considering how well both brands have been doing during the past rough months.”
Earlier this year, Hyundai rolled out a novel incentive program that allows car buyers to return their vehicles if they lose their jobs.
GM has said it is studying the Hyundai offer and may offer a similar program of its own.
Now THAT would be funny, in a tragic sort of way: GM guaranteeing buyers that the company on taxpayer funded life support will back them up if they go bust. Bailout Nation, eh?
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