Thursday, August 7, 2008

The Detroit Death March

From the AP:

General Motors, Ford, Toyota and other automakers said Friday that their U.S. sales fell by double-digits. Nissan Motor Co. was the only major automaker to report a gain, with truck sales up 18 percent thanks in part to the new Rogue crossover and a boost in incentives. Nissan's overall sales rose 8.5 percent.

Automakers were expecting a slide in July as high gas prices continued to cut into sales of trucks and sport utility vehicles and new troubles in the auto leasing sector further wrecked consumers' confidence. July's seasonally adjusted sales rate -- which shows what sales would be if they continued at the same pace for the full year -- was 12.5 million vehicles, according to Autodata Corp. That's down from 17 million as recently as 2005.

Automakers expect things to get worse before they get better.

Again -- none of this should be a surprise. The US automakers are run by idiots. That means they will continue to make really stupid decisions for the foreseeable future.

Here's a really important question. Somewhere between $3.50/$4.00 gallon (on the national average) we hit an inflection point where prices started to negatively impact consumer behavior. Now that oil is coming down, will we see a reversion to previous behavior? Will consumers now want SUV's? Or have people permanently changed their attitudes? More importantly -- has Detroit permanently changed their ways where they are going to make more fuel efficient cars?

Only time will tell.