American Autos Worth Saving And Writing Off
Jacqueline Mitchell, 12.01.08, 04:00 PM ESTSome cars are worth it to Detroit to keep building--others are to blame for the automakers' demise.
This week, Detroit auto executives will deliver a plan designed to convince Congress--and consumers--that they're worthy of a $25 billion bailout that will help keep them in business. But some cars made by the big three--Chrysler, GM and Ford--are so unpopular with consumers that it's hard for many to consider the idea of keeping the automakers afloat with taxpayer money.
Detroit automakers have been hit particularly hard because of the automakers' longtime reliance on gas-guzzling SUVs and big cars. Those models are seeing some of the worst sales, even with gas prices well off their July highs--currently at $1.82 per gallon on average in the U.S.
Market-research firm J.D. Power and Associates says 12.5% of GM's year-to-date sales were utility vehicles, compared with 5.9% of total sales for Toyota
The Hummer brand in particular, is too big, too expensive and too gas greedy for most of today's consumers. Hummer sales were off nearly 22% in 2007 compared with 2006, and when gas prices reached $4 a gallon this summer, Hummer's fate was sealed. Its sales were off nearly 49% during the first 10 months of the year, compared with the same period last year
However, the big three do build plenty of cars that are enjoying strong sales even during the tough economic times (though 2.5 million consumers chose not to buy a car this year because of tighter credit and economic uncertainty). It's the automakers' poor performers that are helping drag down the industry.
