Can the disgrace that is the U.S. auto industry get any worse? Apparently, yes. January figures show that not only did General Motors
Chrysler led the way down with a 55% decline in January sales, followed by GM, which saw sales fall by 49%, and Ford bringing up the rear with only a 40% drop-off. In 2008 the Detroit Three combined to sell 13.2 million, a poor performance in itself, but now with January's numbers out, according to Autodata Corp., we're looking at a run rate of 9.6 million cars for 2009. China, however, sold enough vehicles to generate a run rate of 10.7 million for the year, passing the U.S. for the first time.
Sure there are a few caveats, such as China including sales of heavy commercial vehicles and buses where the U.S. carmakers do not, but the numbers are worrisome nonetheless.
Back when GM and Chrysler got the OK for $34 billion in loan guarantees, it was based on the premise that they would have a solid plan to return to profitability in place come March 31. While the CEOs assured Congress it was achievable, it was predicated on a domestic car market that would support 12.5 million to 13 million in vehicle sales, but would need more like 16 million car sales to enjoy "healthy profits." In fact, GM's baseline look for 2009 was for 12 million sales with a worst-case scenario of 10.5 million sold. It doesn't seem feasible that the carmakers will achieve even these dour predictions; it's more likely that they're going to need much greater infusions of cash if they're going to survive.
The tab for the whole industry is poised to mushroom. Along with the automakers, car rental agencies like Avis
Detroit is no longer interested in trying to beat Japanese carmakers. When Toyota
Hopefully it will still be allowed to finish the race. While GM is hoping its plug-in Chevy Volt will be ready for next year, Ford won't have a plug-in model until 2012, having just inked a deal with Johnson Controls