Will car companies' sales slide completely off the road before promising new technology ever gets into the showroom? Whether fuel-efficient cars can save the automakers is quickly becoming a key question for their survival.
While August isn't yet into the history books, J.D. Power recently released a preliminary sales report for the automakers based on the first 17 days of the month. The report indicates that vehicle sales for that period were about 1.21 million units, or some 13.4 million units on an annually adjusted basis. While those figures would be up about 6% from July, they're nevertheless 17% below the same period for 2007.
But all might not be lost for the group. Nine of the world's car companies have just completed a 13-day coast-to-coast trek in hydrogen fuel-cell cars. Participants in the journey, which spanned the nation from Portland, Maine, to the Los Angeles Coliseum, included General Motors (NYSE: GM), Toyota (NYSE: TM), Ford (NYSE: F), and Daimler (NYSE: DAI), and Honda (NYSE: HMC). While the companies' vehicles made it most of the way on their own power, there were long stretches where, due to a lack of hydrogen fueling stations, they had to be transported on flatbed trucks.
What we have, then, is a pair of contradictory lessons. On the one hand, while automobile sales are clearly going downhill fast, the technology is almost there for a repair. Yet I've heard only minimal talk about the institution of tax or other incentives to push the likes of hydrogen and plug-in vehicles toward becoming the order of the day sooner rather than later. And neither we nor the automakers can afford to wait 15 or 20 more years while fuel-efficient power plants remain merely pie-in-the-sky experimental concepts.
It seems to me that both the car companies and the citizenry would be well-served by having more incentives to develop and use new automobile technology. That would be far better than the current approach of unleashing a steady stream of useless invective against ExxonMobil (NYSE: XOM) or Chevron (NYSE: CVX) because of higher gasoline prices.
In the meantime, however, and until new technology gets further down the road, the car companies will remain unsafe places to park your investment dollars.
Ford, GM, and Daimler are all rated one-star stocks by Motley Fool CAPS players, while Toyota and Honda have garnered four stars. Why not drive home your opinion?
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