Auto manufacturers and dealerships are fighting back with
schemes promising free gas for a year or discounted pricing on future fuel
expenses. Ford, for example, is offering 0% financing on nearly all of its
vehicles and employee pricing on the F-Series -- presumably to help boost the
truck back into sales lead for the month of June.
GM is taking a more drastic step that will affect its future
product plans. The current lineup of GM full-size pickups and SUVs was
scheduled to be redesigned for 2012. Due to the changing market conditions, GM
plans for this move and is instead shuttling its engineers to other
projects. The "other projects" in this case will be the development
of more fuel efficient cars.
"We're going to leave all of our options open, but this
is a direct result of the market conditions we are facing," said GM
spokesman Tom Pyden.
The move is not surprising at all considering that company
sales of trucks, SUVs, and full-size vans tumbled 37 percent during the month
of May. To make matter worse, GM is even having trouble selling its more
efficient, hybrid full-size SUVs. GM projected to sell 12,000 of its Chevrolet
Tahoe Hybrid and GMC Yukon Hybrid full-size SUVs during all of 2008 --
through the first five months of 2008, the company only managed to move a
combined total of 1,100 vehicles.
GM is also on track to close four of its plants that produce
full-size SUVs and pickups by the end of 2010. This will reduce annual
production of said vehicles by 700,000 units per year. GM, however, will also
boost car production by an additional 200,000 units per year to somewhat blunt the
impact. "Somewhat" is the key word as GM makes three times the amount
of profit for each full-size truck or SUV that is sells versus a compact or
GM isn't the only feeling the effects of the gas crunch,
however. Jim Farley, Ford's group vice president of Marketing and Communications
sent out an email to dealers earlier this week with regards to a two-month
delay in the introduction of the all-new, 2009 Ford F-150.
"In parallel, Ford is adjusting the public introduction
timing of the new 2009 Ford F-150 by approximately two months due to the
industry-wide slowdown in the U.S. truck market and the need to sell down
dealer inventory of the current model," said Farley. "The new F-150
now will go on sale in late fall."
With dealers having so much trouble finding buyers for the
old '08 F-150, it doesn't really make sense to drop an all-new model onto
dealer lots for the buyers that are looking to buy a truck.
Ford also announced that its Dearborn truck plant will be
idled for much of Q3, while the line speed will be reduced for two additional
full-size truck/SUV plants. A fourth plant, the Cuautitlan Assembly Plant in
Mexico, will cease building full-size trucks and will ramp up production of the
all-new sub-compact Ford Fiesta in 2010.
Luckily for GM and Ford, help is on the way with new car
models due in the next few years. GM hopes to gain some mindshare with the
American car-buying populous with the Chevrolet Volt. The
vehicle is due in 2010 and can travel 40 miles on battery power alone
thanks to its lithium-ion battery pack. The company is also banking on its next
generation Chevrolet Cobalt to boost small car sales.
Ford on the other hand is finally coming around to embracing the idea of shared
global vehicle platforms and will provide a single Focus for all global markets
(Ford’s home market has been saddled with the nearly decade-old Focus platform
while other markets received a second generation platform a few years ago).
Ford will also bring the aforementioned
Fiesta in 2010 to the U.S. to do battle with the Honda Fit and Toyota
Yaris. The Fiesta will take styling cues from the Ford
Verve concept car.