A Year In Review
Detriot’s news of late has been doom and gloom. With strikes, low sales, and dismal growth, the auto industry doesn’t have much to celebrate.
General Motors Corp. Chairman and CEO Rick Wagoner sent a memo to workers in November assuring them bankruptcy isn’t an option for the world’s largest automaker, but concerns about GM’s financial health persist. The company recently announced a plan to cut 30,000 jobs and close 12 facilities by 2008. Next year, the automaker, which has a Fort Wayne plant, plans to sell a majority stake in its profitable finance arm, GMAC, to raise cash.
Ford Motor Co. is expected to announce its own restructuring plan in January. The nation’s No. 2 automaker had its share of turmoil this year, including an expensive bailout for its former parts division, Visteon Corp.
But, analysts say things are looking better for the coming year.
Despite the gloom in Detroit, 2005 will end on a fairly high note. Analysts are predicting full-year sales of around 17 million vehicles, a healthy pace that has held steady over the past 6 years.
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Geely Will Display at Detroit Auto Show
While the American auto industry continues to show trouble, Chinese automaker, Geely, is taking this opportunity to show their 5-passenger sedan, the 7151CK at the Detroit Auto Show.
"We are absolutely determined to produce a high-quality vehicle that can be marketed to the American consumer for under $10,000,” said Harmer, an attorney and former Washington lobbyist who said he was hired for his expertise in regulatory issues. "We’re not trying to barnstorm the American market. We’re going to protect the product and the credibility of our name.”
Geely expects to sell a little more than 100,000 vehicles in China this year, Harmer said. That’s about the same number of vehicles Mitsubishi Motors sold in the United States in the first 11 months of this year. GM sold 4 million in that time. Geely also plans to export 7,000 vehicles this year, mostly to Eastern Europe and the Middle East, Harmer said.
Harmer said Geely won’t start talking to U.S. dealers for another year.
Detroit auto show co-chairman Richard Genthe said several other Chinese automakers inquired about space at this year’s show, but Geely was the only one that committed to a booth. Geely decided to bring the 7151 CK last week, Genthe said.
"We’re excited to be the first show in the Western hemisphere to showcase a Chinese vehicle,” Genthe said.
This makes history as the first Chinese automaker to display at the Detroit Auto Show. There are other Chinese automakers targeting the American market, but when some displays cost as much as $2M, Geely is the only one actually displaying at the show.
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For the first time since the 80s, Chevrolet tops Ford in car sales
While Chevrolet points to clearance sales and quality improvements as driving the leap over Ford, some industry experts are blaming Ford’s poor performance this year.
Ford’s U.S. sales fell to 2.78 million last year from 3.47 million vehicles in 2000. That was the same year Firestone’s recall of more than 6.5 million tires, most on the Ford Explorer, raised questions about the safety of the top-selling SUV.
Chevrolet’s stronger sales are a rare bit of good news for GM.
The automaker announced plans last month to stop production at a dozen North American plants and cut 30,000 hourly jobs by the end of 2008. The company has lost nearly $5 billion in its North American automotive operations this year.
But Chevrolet really isn’t focusing much on the #1 spot publicly. Instead they are choosing to downplay the honor because industry analysts say Toyota will soon take the top slot.
Finally though, some good news for GM, at least for now.
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