rssTo Reiterate: The Bailout Won’t Help the Big Three Unless Folks Start Buying Cars Again
Tuesday, December 23, 2008 at 11:02 am
- 5 Comments
More bad news for Detroit: Toyota announced yesterday that it expects to lose $1.7 billion for the fiscal year ending March 31 — the first annual loss for the company in 70 years. From The New York Times:
Analysts said Toyota’s downward revision, its second in two months, showed that the worst financial crisis since the Depression was threatening not just the Big Three but also even relatively healthy automakers in Japan, South Korea and Europe. Many other companies will also soon be reporting losses.
Worse, analysts said that they expected next year to be even more painful, amid forecasts that the global economy would continue to slide until at least the summer. This could cause a significant shakeout, driving smaller and weaker companies into the arms of a smaller number of bigger, richer players.
So for all that talk of “retooling factories” and “Chevy Volts” and “smaller, more fuel-efficient cars,” the message is clear: In this economy, folks aren’t buying any cars — not even Toyota Priuses — largely because they can’t access the credit to finance such a purchase.
The Bush bailout forces the Big Three to craft a plan to return the companies to profitability. Toyota’s news is indication that that task just got much tougher.
5 Comments
Comment posted December 23, 2008 @ 9:47 am
I'm not surprised by this…there are already plenty of cars on the roads today and certainly enough for everyone to have one. For the time being I am going to drive my car until the wheels fall right off the thing….because it's still a great car, with great gas mileage and still runs great. No need to buy a new one.
Comment posted December 23, 2008 @ 11:24 am
The dirty little secret here is that the improved quality of American cars in recent years makes it easier for people to hold on to interest-free cars Americans bought in the post-9/11 recession. Those deals in the aftermath of 9/11 was short-sighted and had severe consequences…for the tax-payer, that is.
Comment posted December 23, 2008 @ 5:47 pm
I'm not surprised by this…there are already plenty of cars on the roads today and certainly enough for everyone to have one. For the time being I am going to drive my car until the wheels fall right off the thing….because it's still a great car, with great gas mileage and still runs great. No need to buy a new one.
Comment posted December 23, 2008 @ 7:24 pm
The dirty little secret here is that the improved quality of American cars in recent years makes it easier for people to hold on to interest-free cars Americans bought in the post-9/11 recession. Those deals in the aftermath of 9/11 was short-sighted and had severe consequences…for the tax-payer, that is.
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