automotive industry economics) revised

8/8/2019 Automotive Industry Economics) Revised

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Auto sales show industry beginning to stabilize

By TOM KRISHER and DEE-ANN DURBIN (AP) nov 4

DETROIT After months of roller-coaster results, the U.S. auto industry showed signs of

stability in October.

Total sales of cars and light trucks were unchanged at just over 838,000 compared withOctober of last year, but rose 12 percent from a dismal September 2009, Autodata Corp.reported Tuesday. The results signaled that some consumers are starting to spend again andthe sputtering economy is beginning to pull out of trouble.

"It's ... a fairly stable kind of footing that the industry is getting under it," said Gary Dilts, aformer Chrysler sales executive who is now senior vice president of global automotiveoperations for J.D. Power and Associates.

Last month's sales, if projected for an entire year, rose to 10.5 million after slumping to 9.2million in September, the month after the government's Cash for Clunkers rebates ran out.Analysts said the figures are good for a normally weak October, but they're still far short ofthe 17 million annual rates from the late 1990s and early 2000s.

"Clearly we're seeing improvement in the economy and in the industry. It isn't huge, but it'sa good sign given that Cash for Clunkers is over," said Mike DiGiovanni, General MotorsCo.'s executive director of global market and industry analysis.

The biggest winner among major automakers was South Korea's Hyundai Motor Co., whichsaw sales skyrocket 49 percent to 31,005 vehicles, boosted by the Elantra small sedan.

Japan's Nissan Motor Co. came next with a 5.6 percent gain, followed by GM at 4.7percent, aided by strong pickup truck sales, the performance of new models and the highestincentives in the industry. It was GM's first year-over-year monthly sales increase in 21months.

Toyota Motor Corp. said its sales edged up less than a percent, while Honda sales were flat.Less-rosy news came from Chrysler Group LLC, whose sales fell 30 percent, though theyimproved from September.

Ford Motor Co.'s sales rose 3 percent and it gained U.S. market share for the 12th time in 13months as its critically acclaimed vehicles continue to grab buyers from rivals. Ford hasbenefited from consumer goodwill because it didn't take government bailout money or gointo bankruptcy protection, as General Motors and Chrysler did.

But there are ominous signs that could continue to drag down auto sales.

The jobless rate hit a 26-year high of 9.8 percent in September and is expected to rise to 9.9percent when the October rate is released Friday. Consumer confidence continued to


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deteriorate last month amid pessimism about future earnings and worries the economicclimate would worsen in the next few months.

Emily Kolinski Morris, Ford's top economist, said uncertainty will continue as long asemployment keeps declining, but she said October sales show a real underlying demand for

new vehicles after the distorting effects of the clunkers program during July and August.Clunkers offered up to $4,500 rebates for people who traded in older models for more fuelefficient vehicles.

The economy, Kolinski Morris said, is in transition from recession to recovery withfinancial markets improving.

And the auto industry still has to see its way through a number of economic challenges, saidBob Carter, a Toyota vice president.

"We expect the recovery to be very gradual, extending into next year and beyond," he said.

GM was obviously concerned about its incentive spending, with new sales chief SusanDocherty saying that the company had to bring the numbers down. GM spent $4,100 pervehicle last month as it paid to phase out the Saturn and Pontiac brands. It also had tounload a large number of 2009 pickup trucks.

In October, 52 percent of GM's sales were 2009 models, 47 percent were new 2010s andone percent were from 2008. By contrast, 80 percent of Ford's sales were 2010 models.

GM, Docherty said, plans to reduce incentives as it sells down older models and ships morenewly launched vehicles.

Despite GM's spending, industrywide incentives were down about $100 per vehiclecompared to September, said Jesse Toprak, chief analyst for the car-pricing Web siteTrueCar.com.

He expects incentives will continue to drop in November before rising again at the holidaysin December.

He also said that as GM winds down Pontiac and Saturn, eliminating the need for incentiveson those vehicles, he expects GM and other automakers to start pricing cars closer to whatthey'll sell for instead of relying so heavily on incentives.

"Eventually, the product has to sell itself," he said.
http://truecar.com/http://truecar.com/


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,

Economist.com | WASHINGTON

Categories:Consumption

WHEN last we checked in on the American automobile industry, we were considering theimplications of September vehicle sales figures. After posting a strong, Cash for Clunkers-induced performance in August, carmakers struggled through a dismalSeptember, in whichthe seasonally adjusted annual rate of light vehicle sales returned, more or less, to thelowest level of the recession. Ford's sales fell 5.1% year-over-year, while Chrysler'sdropped by 42%, and General Motors' sales fell by 45%.

Not all that encouraging, but Stephen Rattner, who shepherded GM and Chrysler throughbankruptcy as head of Barack Obama's auto task force, still feels fairly optimistic. Hedescribes his work in a Fortunepiecetoday, and he also spoke this afternoon at aneventsponsored by Brookings, which I was able to attend.

His remarks were interesting but not necessarily convincing. Mr Rattner suggested that theabsence of government intervention to support GM and Chrysler would have meant "theelimination of more than two-thirds of American-owned auto manufacturing capability", aline which assumes that American ownership is somehow an important factor and thatresources idled by closures at GM and Chrysler wouldn't be put to use by other carmakers.

Mr Rattner expressed confidence in productivity and product improvements, but thesestatements were undermined by his observations about the workings of the firm. He noted:

At GM, we faced a bigger management challenge than even its reputation led us to expect.Take, for example, the lack of financial discipline. We saw no indication of the finance staff

pushing back on the operating divisions to achieve better results, as is customary. Analysesseemed engineered to support pre-ordained conclusions. Symbolically, we never heard the

words "shareholder value".Why would you want to preserve this corporate culture? And how confident could you bethat a quasi-house cleaning of upper management would have any effect at all on theseingrained institutional tendencies?

Mr Rattner said he felt confident that GM's restructuring had produced a carmaker thatcould be profitable with US car sales at a 10 million annual rate, where pre-bankruptcyanything less than 16.5 million meant trouble. (The rate in September was 9.2 million.)Based on those figures, he had concluded that GM would likely do well in coming years, assales are almost certain to return to something like the 15 million level. But this wouldseem to assume no serious deterioration in GM market share, despite the fact thatdeteriorating market share has been the defining characteristic of the American car marketfor some 40 years.

Mr Rattner, and other speakers who later joined him for a panel discussion, made a fairlydecent case that it was very important for the collapse of GM and Chrysler to be delayed.But few put together compelling arguments to ensure the preservation of the firms beyondthe desperate months of the current recession. One might argue that so long as one ispropping up the companies to avoid serious knock-on effects, one might as well push themthrough (and finance) a major restructuring in the hopes that they can later stand on theirown.
http://www.economist.com/http://www.economist.com/blogs/freeexchange/consumption/http://www.calculatedriskblog.com/2009/10/ford-reports-us-sept-sales-fall-51.htmlhttp://www.calculatedriskblog.com/2009/10/ford-reports-us-sept-sales-fall-51.htmlhttp://money.cnn.com/2009/10/21/autos/auto_bailout_rattner.fortune/index.htm?postversion=2009102104http://money.cnn.com/2009/10/21/autos/auto_bailout_rattner.fortune/index.htm?postversion=2009102104http://www.brookings.edu/events/2009/1021_us_auto_industry.aspxhttp://www.brookings.edu/events/2009/1021_us_auto_industry.aspxhttp://www.economist.com/http://www.economist.com/blogs/freeexchange/consumption/http://www.calculatedriskblog.com/2009/10/ford-reports-us-sept-sales-fall-51.htmlhttp://money.cnn.com/2009/10/21/autos/auto_bailout_rattner.fortune/index.htm?postversion=2009102104http://www.brookings.edu/events/2009/1021_us_auto_industry.aspx


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Maybe. But if GM and Chrysler fail to turn the corner six months or a year down the road, itwill be very tempting to leaders in Washington to increase supportor protectionfor thefirms, having already intervened multiple times, and having obtained a fairly large equitystake for the American people.

The need to help workers never had to mean a move to help these specific firms, but that ishow it played out. Having acted thusly, the government should use the recovering economy

as cover to extricate itself, and let the chips fall where they may.


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4 Predictions About The Future Of The Auto Industry

Augest 31st

Whats likely to happen to the car business over the next year? A great deal, of course. Butdont take that to mean it will all be bad.

Some will be. But much of the change that is coming is purgatory and necessary. Theevents of the past six months have merely forced the issue. Heres how I see things breakingdown:

1) GM will survive, but its half-dozen divisions will not.

Did you know that at one time Chevrolet, by itself, had more market share than all six of

GMs current divisions Chevy plus Pontiac, Buick, GMC, Saturn, Cadillac, Hummer combined do today? It has already been announced that Pontiac is to be retired, Saturn andHummer sold off. But arguably, GM should consolidate its remaining brands, too.

GMC, for example, is superfluous. It sells rebadged and slightly higher-trimmed versions ofthe same trucks and SUVs sold through Chevrolet. A Yukon Denali is almost a CadillacEscalade; the GMC Canyon is a tarted up Chevy Colorado; the Acadia is a slightly differentBuick Enclave.

Its not sustainable.

2) Chrysler will sleep with the fishes.

The lesions are just too deep (and the market too unforgiving) to have any real hope forChryslers survival. It is the AMC of 2009.

Remember American Motors? By the late 70s it was out of money and its products weredated as well as plagued by shoddy workmanship. It was a vicious cycle. There was notenough money to do it right so corners were cut in obvious ways, which consumersquickly found out about. Which of course led to even worse sales. Which led to even lessmoney to fix the original problems.

That same cycle is bleeding Chrysler white today.

It has models that are obviously out of date (PT Cruiser, Sebring, Pacifica) but it hasnt gotthe money to update them. It has a few others that are nice enough (300, Challenger, bigtrucks/SUVs) but which are totally wrong for the times and cant be given away.
http://blog.motorists.org/predictions-future-auto-industry/http://blog.motorists.org/predictions-future-auto-industry/


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Sprinkle in crushing debt and union/pension obligations and ask yourself, who would wantany part of this mess? Fiat to the rescue? No one not the Americans, not the Japanese can sell the cars they have here already.

Do you suppose that Fiat a brand with zero presence in the U.S. market is going to

succeed where even Toyota is having serious trouble getting a leg up?

Sayonara, Mopar.

3) Everyone will scale back.

Just as GM has too many divisions, most car companies have far too many models and sub-models of those models. Toyota, for example has (brace yourself) no less than 17 separatemodels not counting Lexus and Scion. Mercedes-Benz has doubled its lineup in thespace of a decade and now sells (god help us) minivans. Honda, Nissan and the rest aresimilarly afflicted and suffering, as a result.

Everyone is trying to sell everything and its just too much. It is very hard to make a sale(let alone a profit) when there is such a glut of offerings available.

The herd must be thinned.

Maybe we will see a return to the specialization that used to be such a successful businessmodel. For instance, VW was much healthier when it focused on value-priced but high-precision/high-quality cars. It made a big mistake trying to be all things to all people which only caused a shedding of its core customer base while failing to attract the higher-end buyers it wanted.

Maybe trucks and SUVs should not be sold by everyone, either.

And so on.

4) Overdone (and overpriced) cars are out.

For openers, the distinctions that used to be obvious between economy cars and luxurycars arent so obvious anymore other than in terms of price. Yes, you can pay $40,000for a car. But an $18,000 car will have most of the actually useful features and equipmentthat used to separate a luxury car from a car for the Masses things like climate control

AC, power windows, locks, cruise control; a nice stereo, etc.

The car companies have been desperately trying to re-establish the distinction (and justifythe silly MSRPs theyre asking) by incorporating more and more essentially uselessequipment (high-powered engines that wont get you anywhere faster on todays traffic-jammed roads; comically overwrought electronic aids such as mouse controllers, etc.)into their middle and higher-end product.


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But people are not buying that anymore. It has dawned on them via the blunt forcetrauma of economic collapse that they dont need this stuff and can get by fine without it.

More bluntly, the idea that average people can or should be driving around in $40,000(or even $30,000) cars is headed for the same place that no-doc mortgages went. It was a

Potempkin Parking Lot financed by pyramid debt that has since collapsed and which cannotbe resurrected.Newsflash: The average family income in this country is under $50,000. Cars if they are to be sold based on ability to pay off the loan will have to have theirMSRPs adjusted accordingly.

Either that or the spending power of the average American will need to be brought in linewith the cost of new cars. Which do you suppose is more likely to happen?

In sum, I predict well see several fewer brands of cars and many fewer cars by thistime next year. The ones left standing will also be less frilly and cost a lot less, too.It willbe rough on those who are going to lose their jobs, obviously but the coming contraction

is both necessary and inevitable.

We should have seen it coming, of course. But that doesnt mean we can do anything tostop it from happening.

Not anymore.


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Canadian vehicles sales down one per cent in October; smallest decline inmore than a year

Kristine Owram, THE CANADIAN PRESSPublished: 10 11 2009

TORONTO - Vehicle sales in Canada were down only one per cent in October compared to a year earlier, thesmallest decline in more than a year amid growing consumer confidence.

Overall, 121,500 vehicles were sold in Canada in October, according to data compiled by DesRosiersAutomotive Consultants. This compared to 122,711 a year earlier.

"The overall industry is seeing monthly sales return to levels equivalent to what they were in 2008, despite the

fact that year-to-date sales for the industry remain down 13.2 per cent," said David Adams, president of theAssociation of International Automobile Manufacturers of Canada.

"There are significant incentives from manufacturers in a highly competitive marketplace right now, providinggreat purchasing opportunities for consumers."

Although several of the major brands are still posting year-over-year declines, this was offset by the large gainsof other manufacturers, including Hyundai, Ford and Toyota.

General Motors clung to its top spot with 17.5 per cent of market share, although this was down from 21.8 percent at the same point last year.

GM Canada's sales were down 33.1 per cent to 18,818.

Meanwhile, Ford came in a strong second, with sales up 20.3 per cent to 18,187. This marks the company'sfifth consecutive month of sales gains and 12th consecutive month of market share growth, boosted by the factthat Ford was the only North American automaker to survive the downturn without government assistance.

"We are making steady progress and remain fully focused on our plan to build a strong and sustainable Ford,"stated Ford Canada president and CEO David Mondragon.

"Consumers are seeing the signs of recovery and are gaining confidence in the quality, fuel efficiency, safetyand smart technology incorporated in our new product lineup. In fact, 90 per cent of our sales come from ournew models" including the Taurus and the Fusion, he added.

Toyota was in third place in terms of market share, with sales up 19.4 per cent to 17,354. This set a record forthe month of October and followed months of year-over-year sales declines.

Toyota's Lexus luxury brand sold 1,459 vehicles, up 11.9 per cent from October 2008.

In fourth place was Chrysler, down 9.1 per cent to 14,215 vehicles. Honda was in fifth place, down 10.4 percent to 9,224, while Honda's Acura division sold 2,079 units, up 78.9 per cent.


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Meanwhile, South Korean automaker Hyundai came in sixth place, with sales up a remarkable 43 per cent to8,415.

October was Hyundai's 10th straight month of double-digit sales increases and its ninth straight record-breaking month.

"We said our strong sales results weren't just a fad, and ten consecutive months of significant sales increases

certainly prove that," stated Hyundai Canada president and CEO Steve Kelleher.

Meanwhile, Nissan reported sales of 5,912, down 2.5 per cent year over year. Its Infiniti luxury brand sold 743vehicles, down 3.5 per cent.

Among other luxury brands, Mercedes-Benz reported Canadian sales of 2,199, up 27.8 per cent, while BMW'ssales gained 5.5 per cent to 2,310. This compared to an impressive 50.1 per cent gain in September.

Among other brands, Volkswagen sold 3,545 vehicles in September, down 3.2 per cent, while Audi's saleswere up 2.3 per cent to 1,100.

Kia sold 3,603 vehicles, up 23.2 per cent, while Mazda sales were down 8.1 per cent to 5,612, Mitsubishi saleswere up 8.5 per cent to 1,452 and Subaru sold 2,486 vehicles, up 39.3 per cent.


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GM sees October sales bounce, Chrysler

plunges

General Motors GM.UL posted its first monthly sales increase in nearly two years

on Tuesday as a rebound in industrywide U.S. auto sales in October pointed toward a

gradual recovery for the battered sector.

Chrysler was the weakest of the large automakers. Its sales plunged 30 percent in

October, the day before Fiat SpA Chief Executive Sergio Marchionne releases a five-

year turnaround plan for Chrysler.

U.S. auto sales hit an annualized rate of 10.46 million units in October, according to

industry tracking firm Autodata. That is a level not seen in a year, except for July and

August when the U.S. government's "cash for clunkers" incentives program sparked a

surge in sales.

"In a nutshell, we can tell with confidence that we've seen the worst already past andwe are seeing relative improvements in the market place and consumer demand," said

Jesse Toprak, analyst with Truecar.com.

However, high unemployment and weak consumer confidence will slow the recovery,

he said. "The improvement in the automotive market for the rest of the year as well as

next year will not be as fast or robust as we thought earlier this year."

The October sales are a key indicator because they are the first month of U.S. sales not

affected by the clunkers boom, which provided incentives of up to $4,500, or the

backlash that followed in September.

The annualized rate of 10.46 million units was a jump from the 9.22 million rate in

September after the incentives program had ended and inventories were decimated. It

also marked a slight decline from October 2008, the first month after the financial

markets collapsed.


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Automakers said they were cautiously optimistic. GM said the U.S. economy and auto

industry were starting to show signs of recovery and the results suggested the sector

may be stabilizing after four years of declines.

GM posted a 4 percent sales gain, Ford Motor Co. a 3 percent increase and Toyota

Motor Corp a fractional gain. All three results were better than analysts had expected.

Korea's Hyundai Motor Co posted a 49 percent sales rise that blew past expectations

and allowed the automaker to take more market share from rivals.

Nissan Motor Co Ltd reported a gain of nearly 6 percent, while Honda Motor Co Ltd

reported a sales decline of less than 1 percent.

"We're seeing the industry get some legs under it," GM sales analyst Mike DiGiovanni

said on a conference call.

While the sales results were viewed as positive, industry executives continued to

question the speed and strength of any recovery given the high U.S. unemploymentrate.

"We expect consumers to remain cautious as the recovery gains traction," said Ford

economist Emily Kolinski Morris.

Toyota U.S. sales chief Bob Carter said the automaker expects a "very gradual" U.S.

economic recovery.


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Chinese September car sales top 1 million mark again!

14 October 2009

Chinese automotive sales soared by 78% in September 2009 when compared with the sameperiod a year ago. Overall vehicle sales in September sat at a healthy 1.33 million vehicles,with passenger vehicles (SUV, MPV, sedans etc) sales coming in at to 1.02 million units, ayear on year rise of 83.6%.

The central government is largely responsible for saving automotive sales which flat lined

in February 2009, a large shock to the chest in the form of massive sales tax cuts on sub1.6L cars turbocharged sales, which resulted in car sales topping one million units for theseventh month running in September 2009.

The sales tax policies are expected to stay until the years end, and maybe extended into2010 to further the sales goal, it has been rumoured in the Chinese media that thegovernment may relax tax on 1.6l to 2.5l displacement compact sedans to give that segmenta boost, much like what was given to the sub 1.6l segment.

Overall yearly sales are expected to hit 12 million by the end of the year and cross the 10million mark by the middle of October 2009, sales from January to September rose by

34.2% to 9.66 million units.

2008 sales were at 9.4 million vehicles which was 8% higher than 2007, but lacking the21% growth in the car market that 2007 saw.


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Article summary 1

This first article is one that is quite recent and puts forward the

thought that the auto industry is finally beginning to stabilize after the

recession. It describes the numbers and monthly sales of some of the

larger automotive dealers such as GM and Hyundai and how there has

been an increase of cars being sold that is suggesting buyers are

coming more out of their shells and starting to purchase once again. Also

they bring in Fords lead economist which seems to think that as long as

the employment rate is dwindling then there will continue to be

uncertainty. She also goes on to discuss certain programs dealers a

running which offers money for a used car, and even discusses how the

recession to recovery time will take a longer amount of time. Quite

possibly up to a year or beyond.


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Analysis: This article does bring valid information to the table although

the time span in which the numbers are spaced are quite low. It seems

to me that you cannot gauge the end of an economic crisis with numbers

that span a time of one month as most of the time they are taking

Octobers car sales and comparing them to September. Although there

was quite a large change I dont think its enough of one to be able to

say that the automotive industry is beginning to stabilize as Novembers

sales could turn out to lack in numbers, causing them to be right back to

square one. There also seems to be talk from fords top ecologist that

suggests the automotive industry will be a long road, which I agree with,

but I dont agree with the thought that its starting to recover just yet.

Article summary 2

In this article, they focus more on general motors and how they have

been in trouble of bankruptcy due to the recession. This article shows

scepticism in claims brought forth by GM that if the government had not

intervened with their bankruptcy, than two thirds of American owned

auto manufacturing capability would have been eliminated. The writer of

this article suggests that instead of the government bailing out GM, they

should have let the chips fall where they may and if the automotivetycoon was to be able to ride through, than more power to them. He also

talks about the recovering economy and how the government should use

it for cover to extricate itself. There is also talk of a plan that seems to


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be talking of the company finally regaining some leverage and being

able to get back on its feet over time.

Analysis: The writer of this article seems to know a great deal about

this topic. His ideas and thoughts brought forward are seemingly thought

out and well executed. Although I do agree that if such a large company

such as GM was to disappear, than the economic backlash would be

more than incredible. The recession may be entering its recovering

period but this article suggests that GM will be okay in terms of sales and

product improvement, and that it will just take time for the mass

company to build up to what they used to be, which I agree with, but Im

not sure if it will be that easy of a road for them, considering the

circumstances. They are not in as big of a problem as Chrysler, which is

plummeting fast and may hit the wall soon. At least GM seems to be

getting back on its feet, although it seems like its going to be a long and

painful process considering.

Article Summary 3


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This article is from august of 2009 and I used it because it is about

predictions of the future of the auto industry, and so far it has been quite

correct. It describes how GM will indeed survive although many of its

divisions such as Pontiac will not. It also talks about how Chrysler isobviously the most doomed of the major automotive companies, how

overdone and overpriced cars are a thing of the past, at least for now,

and how all of the major car companies will scale back on everything to

hopefully cut their costs by a more reasonable amount.

Analysis: it surprised me when I found this article how correct it was.

This article is a few months old and yet, it still seems to hold credible

information as all of the predictions presented have came true. Also the

articles writer seems to have a firm grasp of the automotive industry,

and most likely has been keeping an eye on the declining market for

some time to create such educated guesses. Chrysler is already in a

very large predicament as it is and GM has discontinued and sold a lot of

its divisions. And all of the major car and auto companies have started tocut back on all of their costs and scaling back. Overall its a rather eye

opening article that really captures the essence of how much these

companies are suffering ,even when the recession has just hit the

recovery period.

Article summary 4


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For this article i decided to veer away from the U.S and focus on

Canada. They have only seen a decrease in the amounts of cars sold by

one percent, which is barely anything. The article tells of how there has

been little change in car sales and the Canadian numbers are much like

they were this year as they were last year even though the year to date

sales seem to still be down 13.8 percent. Canadians even seem to be

buying a large amount of rather expensive cars such as Mercedez-Benz

and BMWs monthly. Japanese based companies also seem to be going

strong in Canada as well and there seems to be no decline in the car

industry as opposed to the U.S.

Analysis: the information presented in this article is quite good,

showing very clearly that the automotive sales for big name brand

companies like Toyota, Ford, Mercedez etc, are doing exponentially good

given the circumstances they are presented with in the U.S. This article

also shows how expensive cars in North America such as Audi, BMW, and

others all were gaining percentage, BMW being the leader last month

with a staggering increase of 50.1 percent. It is quite an amazing thing to

see how one invisible line (the border) can have such a changing effect

on an industry as big as this. Hopefully Canadas positive sales can be a

point in which these companies can get back on their feet in America

and finally end the economic bashing some of them have had to enduremore than others ( general motors, Im looking at you).


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Article Summary 5

Yet another article that seems to think that Chrysler is in a

slump(which it is) and the GM is coming out of its slump more and

more( which it kind of is). The article focuses on the fact that these

companies are remaining cautiously optimistic of a faster recovery due

to the high unemployment rate right now in America. They also show

that the numbers of most of the higher up companies are starting to

climb. Low consumer confidence is also said to be a factor in a slow

recovery for the economy, but insist that the worst is now definatly

behind, and that there will be slow improvement of the marketplace, and

as the unemployment rate starts to drop, consumer demand

Analysis: they seems to be pointing in the right direction with this

one, there seems to be a lot of hesitation on the consumers part due to

the unemployment rate, and they also suggest that for there to be a

significant increase in the sales of cars and the stability of the

marketplace, its going to take a rather large period of time, which I one

hundred percent agree with. Im also starting to agree with the fact that

GM will, in the long run, be okay, and that Chrysler seems to be in a

situation where its going to be hard to get out of unless they have a

decent plan that will almost definatly require a very hefty governmentloan.


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Article Summary 6

Chinese car market has been soaring lately and has topped the

million mark again as of mid October. In September it topped increases

of 78 percent when compared to last year and it doesnt have any signs

of slowing down. Even passenger vehicles are seeing large rises in year

to year comparisons. Compared to the American market, the Chinese

market is soaring. The government is also thinking of upping the

displacement in some of the sedans from a 1.6L engines to a 2.5L to give

the specific segment a boost in sale since everything else has been

selling so well. American car market, watch out.

Analysis: This is quite amazing. The numbers of sales compared to

last year are up staggering amounts and I have to say that its rather

amazing how well this industry has been doing in other parts of the world

excluding America. Sales are supposed to actually pass 12 million at the

end of the year, which seems very good when you think about how inAmerica, GM only hit 9.2 last year, which is a large failure for such a big

company. There is only one problem though. They used a very large sale

tax to boost sales, and are even thinking about keeping it a bit longer to

keep sales high, although once the tax is gone Im assuming the market


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will start to low on that particular sector once again and there wont be

as much activity. Despite this though, its rather impressive that the little

guy can beat out companies like GM in situations like this, its a nice

change of pace.

automotive industry economics) revised

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