Why are America's automakers bleeding market share? How did Ford
First up, General Motors
If the company can make good on its promise to produce a fleet of mammoth Tahoes, Suburbans, and Escalades that produce prodigious horsepower while averaging better than 20 mpg, GM could well achieve its goal of further increasing its lead in this heretofore profitable market segment.
In contrast to Ford and GM, Nissan earns a better profit margin on its sedans than on its truck-based vehicles. Like GM, Nissan aims to play toward its strength, shifting its production to emphasize its more profitable offerings.
However, in Nissan's case, this means more cars and fewer trucks. The company cited Hurricane Katrina's effects on U.S. gasoline prices as a major reason for the shift. Nissan's move suggests that the company not only sees truck sales as less beneficial to its bottom line, but also sees the market for less fuel-efficient trucks drying up, at least in the short term.
This presents a dilemma to GM investors. Their company may well achieve its goal of owning the truck and SUV segment, both through its own efforts and from its competitors retreating from the market. But if those competitors are reading the market better than GM, the Detroit car king's victory may prove Pyrrhic.
Who's got the better read on the trend in sales of trucks and SUVs, GM or Nissan? Share your thoughts on The Motley Fool's Buying and Maintaining a Car discussion board.
Fool contributor Rich Smith has no position in any company mentioned in this article.