Carmakers feel the pinch as crisis pains Wall Street

[August]

Carmakers feel the pinch as crisis pains Wall St - International Business-News-The Economic Times

BERLIN: Europe's carmakers are cutting production and reporting falling sales in a clear sign that the global financial crisis is spreading from banks to other sectors of the economy.

On Wednesday BMW, the German luxury auto firm, said it had sold almost 15 percent fewer vehicles in September, a plunge that it blamed on the "increasingly challenging economic situation.

"The crisis in the financial markets is currently making consumers highly reluctant to purchase, especially in the United States," the Bavarian firm said. "The situation remains challenging. The recent escalation in the financial crisis is also affecting consumer confidence in the premium segment," it said.

The United States, BMW's largest market, saw deliveries fall by a quarter and by 30 percent for BMW-branded cars -- it also owns Mini and Rolls-Royce and makes motorbikes -- while in Western Europe, sales were off 17 percent.

The Munich-based firm, which has 17 production facilities in six countries, announced on Tuesday that it would produce between 20,000 and 25,000 vehicles less than originally planned this year.

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It will be interesting. I heard the other day that the big three in America have had a bailout as well as the banks. So on the one hand the government are helping them out. On the other hand Obama wants to improve fuel efficiency standards. Will the lobbyists let him get it through?

[Canuck]

Originally Posted by include

It will be interesting. I heard the other day that the big three in America have had a bailout as well as the banks. So on the one hand the government are helping them out. On the other hand Obama wants to improve fuel efficiency standards. Will the lobbyists let him get it through?

Protectionism is loosing momentum in the US as well as here in Canada. The last ten years or so have been nothing but and Detroit's idea of pulling their firms back around is by producing 500 HP V8 Muscle cars in the middle of an oil crisis. They have all started making Hybrids, even Escalades and Suburbans come in Hybrid now. Ford also has a few Hybrid models and I think Chrysler is putting all its chips in one pot for the electric vehicles. I would say by 2010-2011 we should start seeing some more fuel efficiency.

As it is now, if Ford by 2012 does not become profitable Securities Banks will take control. GM owes three times its value: one time in health benefits to the union, once to the banks and another to the government and Chrysler is probably the most financially stable since venture capitalist (Cerberus Capital Management) bought it out. That said, if it does not work out Cerberus will start the chopping block.

[bruce]

Struggling US car giants General Motors and Chrysler are in talks about a possible merger, US media say.

BBC NEWS | Business

I wonder how much of that is being forced on them?