Auto Cos Pressured As Truck, SUV Sales Wither On Gas Costs

[jpak]

http://money.cnn.com/news/newsfeeds/articles/djf500/200805221734DOWJONESDJONLINE000973_FORTUNE5.htm

DETROIT -(Dow Jones)- U.S. consumer demand for sport-utility vehicles and pickup trucks has fallen further in recent weeks as consumers become convinced that $4-a-gallon gasoline is here to stay, raising fresh concerns about the outlook for auto makers and their suppliers.

Ford Motor Co. (F), despite repeated pledges that it would post a pretax profit in 2009, on Thursday abandoned that goal, largely because of the speed by which consumers are switching to more fuel-efficient vehicles. The auto maker said the shift is structural, not cyclical, and it will have to further cut costs and production to adjust to lower demand.

"The overall shift is not a surprise, but the speed is," Ford sales analyst George Pipas said in an interview. "Certain segments are being dropped like a rock. We haven't found bottom on the pickup and SUV markets, and who knows where it will go in June?"

The Big Three auto makers in Detroit have long relied heavily on the success of their pickup truck and SUV sales, which generate far higher profit margins than smaller cars. Though they've taken steps in recent years to reduce their reliance on large vehicles and introduce more fuel-efficient offerings, the bulk of sales at Ford, General Motors Corp. (GM) and Chrysler LLC still come from pickup trucks and SUVs.

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[notadmblnd]

1. maybe they should ship them to China or India, see if the folks there will buy them

At some point you have to wonder... are all these high paid CEOs and Execs really that incompetent and short sighted; to think when all of our jobs went away they could maintain profits? Or was this shit planned? We have no money left after gas and food to buy anything, much less one of their vehicles.

[unpossibles]

2. the people who pushed these things for the higher profit margin

are shortsighted fools. I feel sorry for the employees caught in the middle, but I have little sympathy for the companies who did not foresee this happening as gas prices rose and the economy started tanking. And no, rebranding them as "crossover" vehicles in some horrid attempt to confuse people (sure sounds like Hybrid, doesn't it?) is not the answer.

[tanyev]

3. Sounds like the free market is speaking.

Will they listen this time?