Automakers get spanked by high gas prices
GM, Ford, Chrysler, or Toyota, take your pick. They all watched their sales do double-digit nosedives in the month of June. We know that high gas prices have been pushing consumers to make the smart move toward smaller cars for the last couple of years, but apparently $4 a gallon gas is the tipping point where SUV and pickup sales fall into the abyss. These days, an automaker's success is clearly tied to how many fuel-efficient cars it rolls out versus gas-guzzlers. Brands like Honda and Volkswagen made very modest gains over the last month, while Hummer tanked, unsurprisingly. The big question for the US auto industry right now seems to be: are your next generation vehicles going to save you?
For the Big 3, the news is no big surprise -- they rely almost completely on SUVs and full-sized pickups. Toyota's fall, on the other hand, I found a little surprising -- their sales in June plummeted 21.4%. Although they do sell a lot of small economy cars, I guess their lineup has been on steroids for the past decade -- culminating with the gigantic Tundra in 2007. The other big surprise is that sales of the Prius dropped 33.7% -- although Toyota claims that it's because of limited availability.
Is the US auto industry going through tough times until the electric cars hit the streets, or is it simply on the way out? I mean, it's obvious that the car will be necessary for quite some time, but can the traditional American car culture survive the oil crunch? Do you think that America is starting down the path towards the European model, where most people don't own a car?
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