To those mainstream media criticizing GM, Ford and Chrysler for making cars that Americans won't buy, the Detroit 3 sold a combined 6,349,084 vehicles or 48% of all vehicles sold in the U.S. last year. So why are they losing money?
Chrysler President & Vice-Chairman Jim Press told us on September 2nd, "Because we were spending money as a four million car company, we had the manufacturing capacity to do four million cars and trucks; the problem is, the revenue to pay for all that was only two and a half million." Press goes onto say, "We've taken a million capacity out of Chrysler in less than a year." Four months after those remarks we know that Chrysler sold less than 1.5 million in 2008 so that gap translates to a money-losing business until they scale back more and sales of profitable vehicles pick up.
Chrysler's sales fell 30% in 2008 from 2007 and much of that was by design. Press, in the same speech, said, "In terms of capacity, we've cut out alot of fleet volume on purpose." Why? "We were doing almost 40 percent of our volume for fleet, mainly daily rental." Press adds, "We weren't covering our overhead, and we were really hurting our residual values."
Ford F Series, Chevy Silverado and Dodge Ram had combined sales of 1,226,418 or about 9.3% of all vehicles sold in 2008 so people are buying pickup trucks. Press says, "If you look at full-size trucks and SUVs, it's about 2 million or a little less per year going forward. There's enough market there for us."
Volkswagen Jetta sales of 97,461 in 2008 represents 44% of VW's 223,128 U.S. sales and Audi A4 sales of 43,343 is 49.4% of Audi's U.S. sales.
Small cars helped luxury carmakers Mercedes-Benz and BMW. Mercedes-Benz sold 225,128 vehicles in 2008, an 11.2% drop from 2007, but add in the 24,622 smart cars sold, total Mercedes sales fell just 1.5%. The BMW brand sold 249,113, a drop of 15.2% but add the MINI to the mix with sales of 54,077, a 28.6% jump from 2007 and BMW total sales fell only 9.7%.
The number crunching continues.
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