2008–2010 automotive industry crisis

Part of the 2008 financial crisis June 2026 June 2026 The 2008–2010 automotive industry crisis formed part of the 2008 financial crisis and the resulting Great Recession. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. The downturn also affected Canada by virtue of the Automotive Products Trade Agreement. General Motors Corporation - Quarterly Balance Sheet GM (NYSE) Marketwatch http://www.marketwatch.com/tools/quotes/financials.asp?symb=GM&sid=2160&report=2&freq=2 2008-12-07 Total Equity -59,939.00 https://web.archive.org/web/20081218015513/http://www.marketwatch.com/tools/quotes/financials.asp?symb=GM&sid=2160&report=2&freq=2 18 December 2008 live The automotive industry was weakened by a substantial increase in the prices of automotive fuelsUncertainty in U.S. auto industry puts pressure on suppliers. International Herald Tribune. https://web.archive.org/web/20080924054405/http://www.iht.com/articles/2008/09/18/business/deal19.php 2008-09-24 September 19, 2008. Retrieved 20 November 2008. linked to the 2003–2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy.Gas prices put Detroit Big Three in crisis mode. Associated Press June 1, 2008. Retrieved 20 November 2008. The popularity and relatively high profit margins of these vehicles had encouraged the American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus. With fewer fuel-efficient models to offer to consumers, sales began to slide. By 2008, the situation had turned critical as the 2008 financial crisisHazardous Conditions for the Auto Industry. New York Times, October 1, 2008 https://web.archive.org/web/20160922044231/http://www.nytimes.com/2008/10/02/business/02sales.html?partner=rssnyt&emc=rss September 22, 2016 . Retrieved 20 November 2008. placed pressure on the prices of raw materials. Car companies from Asia, Europe, North America, and elsewhere implemented creative marketing strategies to entice reluctant consumers as most experienced double-digit percentage declines in sales. Major manufacturers, including the Big Three and Toyota, offered substantial discounts across their product lineups. The Big Three faced criticism for their mix of available vehicle types offered, which faced criticism for being ill-suited to a climate of rising fuel prices. North American consumers turned to smaller, cheaper, more fuel-efficient imports from Japan and Europe.Dan La Botz https://mronline.org/2008/11/18/whats-to-be-done-about-the-auto-industry/ What's to Be Done about the Auto Industry? Monthly Review Mrzine.monthlyreview.org November 2008 2010-05-01 live https://web.archive.org/web/20090802011101/http://mrzine.monthlyreview.org/labotz181108.html 2009-08-02 Asia China 220px|thumb|right|The BYD F3, the world's first production model plug-in hybrid car In 2008, the Chinese government reduced automotive taxes in order to spur flagging sales. In 2008, a plug-in hybrid version of the BYD F3 compact sedan was introduced, the world's first production model plug-in hybrid car.http://blogs.edmunds.com/greencaradvisor/2010/03/byd-auto-to-offer-f3dm-plug-in-hybrid-to-chinese-individuals-starting-next-week.html BYD Auto to Offer F3DM Plug-in Hybrid to Chinese Individuals Starting Next Week Scott Doggett AutoObserver 23 March 2010 dead https://web.archive.org/web/20100330091520/http://blogs.edmunds.com/greencaradvisor/2010/03/byd-auto-to-offer-f3dm-plug-in-hybrid-to-chinese-individuals-starting-next-week.html 30 March 2010 Anderson G. E. https://books.google.com/books?id=OnlQzQV5qdEC&q=byd+f3&pg=PA153 Designated Drivers: How China Plans to Dominate the Global Auto Industry 2012-06-19 John Wiley & Sons 978-1-118-32885-9 en In January 2009, Chinese auto-manufacturer Chery reported unprecedented monthly sales.https://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSSHA9322320090216 China's Chery Auto aims for 18 pct car sales growth Michael Wei Fang Yan Jacqueline Wong February 16, 2009 Reuters 2009-02-19 https://web.archive.org/web/20090221084934/https://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSSHA9322320090216 21 February 2009 live (See also Automobile industry in China) India Citing falling production numbers, the State Bank of India reduced interest rates on automotive loans in February 2009.http://economictimes.indiatimes.com/State-Bank-of-India-offers-auto-loans-at-10-/articleshow/4163574.cms State Bank of India offers auto loans at 10% for one year February 21, 2009 The Economic Times 2009-02-27 live https://web.archive.org/web/20090224082643/http://economictimes.indiatimes.com/State-Bank-of-India-offers-auto-loans-at-10-/articleshow/4163574.cms February 24, 2009 For the first few months of 2009, Tata Motors conducted a widespread marketing campaign heralding the debut of the Tata Nano. Billed as "the people's car", the manufacturer hopes the low cost will encourage customers to purchase the vehicle despite the ongoing credit crisis.https://www.google.com/hostednews/afp/article/ALeqM5gHjGyYdytS4zehPhacRhxLZEKjfA Tata's Nano, world's cheapest car, on sale in April February 26, 2009 AFP 2009-02-27 https://web.archive.org/web/20090302180511/https://www.google.com/hostednews/afp/article/ALeqM5gHjGyYdytS4zehPhacRhxLZEKjfA 2 March 2009 dead Japan 220px|thumb|right|The Toyota Prius is one of Toyota's Hybrid Fuel efficient vehicles which have moved in and out of short supply. With high gas prices and a weak US economy in the summer of 2008, Toyota reported a double-digit decline in sales for the month of June, similar to figures reported by the Detroit Big Three. For Toyota, these were attributed mainly to slow sales of its Tundra pickup, as well as shortages of its fuel-efficient vehicles such as the Prius, Corolla and Yaris. In response, the company has announced plans to idle its truck plants, while shifting production at other facilities to manufacture in-demand vehicles.http://www.detnews.com/apps/pbcs.dll/article?AID=/20080709/AUTO01/807090377/1148 Toyota sputters as market shifts The Detroit News 2010-05-01http://www.time.com/time/business/article/0,8599,1822123,00.html Time Toyota Cuts Back on Trucks 2008-07-11 2010-04-26 dead https://web.archive.org/web/20100901090119/http://www.time.com/time/business/article/0,8599,1822123,00.html 2010-09-01 Loyalty to Detroit 3 slipping away | Freep.com | Detroit Free Press https://web.archive.org/web/20130512033833/http://www.freep.com/apps/pbcs.dll/article?AID=%2F20080708%2FBUSINESS06%2F807080366%2F1019%2FBUSINESS May 12, 2013 https://www.nytimes.com/2008/07/11/business/worldbusiness/11toyota.html?em&ex=1216008000&en=e057635b33b58e68&ei=5087%0A The New York Times Toyota Scales Back Production of Big Vehicles Bill Vlasic Nick Bunkley 2008-07-11 2010-04-26 On December 22, 2008, Toyota declared that it expected the first time loss in 70 years in its core vehicle-making business. Loss of $1.7 billion, in its group operating revenue, would be its first operating loss since 1938 (Company was founded in 1937). Toyota saw its sales drop 33.9 percent and Honda Motor by 31.6 percent.https://www.nytimes.com/2008/12/23/business/worldbusiness/23toyota.html?_r=1 Toyota Expects Its First Loss in 70 Years MARTIN FACKLER December 22, 2008 The New York Times 2008-12-22 live https://web.archive.org/web/20140502014449/http://www.nytimes.com/2008/12/23/business/worldbusiness/23toyota.html?_r=1 May 2, 2014 On 5 December 2008 Honda Motor Company announced that it would be exiting Formula One race with immediate effect due to the 2008 economic crisis and are looking to sell the team.http://www.autosport.com/news/report.php/id/72322 Honda confirm immediate F1 pull out 2008-12-05 Autosport https://web.archive.org/web/20081206183210/http://www.autosport.com/news/report.php/id/72322 6 December 2008 live 2008-12-05 Honda has predicted that there may be reductions among part-time and contract staff. Upper management bonuses would also be reassessed and directors in the company will take a 10 percent pay cut effective January 2009.https://www.cbc.ca/news/world/honda-slashes-profit-forecast-1.751681 Honda slashes profit forecast December 17, 2008 CBC News 2008-12-22 https://web.archive.org/web/20081220072947/https://www.cbc.ca/news/world/honda-slashes-profit-forecast-1.751681 20 December 2008 live Nissan, another leading Japanese car manufacturer, announced that it also would be slashing production and will reduce its output by 80,000 vehicles in the first few months of 2009.http://www.abc.net.au/news/stories/2008/12/17/2449449.htm Canon, Nissan hit by economic crisis December 17, 2008 ABC News 2008-12-22 https://web.archive.org/web/20081220153330/http://www.abc.net.au/news/stories/2008/12/17/2449449.htm 20 December 2008 dead In December 2008, Suzuki, Japan's fourth biggest car manufacturer, announced that it will cut production in Japan by about 30,000 units due to falling demand. The company is expected to face its first profit drop in eight years for financial year ending in March 2009.https://www.bloomberg.com/apps/news?pid=20601209&sid=atJFcudku7LY&refer=transportation Suzuki to Cut Japan Output by Additional 30,000 Units December 22, 2008 Bloomberg 2008-12-22 On 16 December 2008, Fuji Heavy Industries, Japan's largest transport equipment manufacturer and the maker of Subaru brand cars, announced that it would exiting World Rally Championship at the end of the 2008 championship, "this sudden decision was in response to the widespread economic downturn that is affecting the entire automotive industry", and came one day after competitor Suzuki exited the sport.http://www.wrc.com/news/subaru-pulls-out-of-the-wrc/?fid=8541 Subaru to pulls out of the 2009 World Rally Championship December 16, 2008 live https://web.archive.org/web/20140502014835/http://www.wrc.com/news/subaru-pulls-out-of-the-wrc/?fid=8541 May 2, 2014 World Rally Championship WRC.com https://web.archive.org/web/19980209085238/http://www.wrc.com/ 1998-02-09 .http://www.fhi.co.jp/english/news/press/2008/08_12_16e.html FHI to withdraw from FIA WRC after 2008 season December 16, 2008 live https://web.archive.org/web/20100905062204/http://www.fhi.co.jp/english/news/press/2008/08_12_16e.html September 5, 2010, Fuji Heavy Industries news release. Reported in Bloomberg on December 23, 2008, that Mitsubishi Motors is to widen production cuts on falling demand. The Japanese maker of Outlander sport-utility vehicles, will scrap the night shifts at two domestic factories as the deepening global recession saps auto demand. The carmaker will halt the night shift at its Mizushima plant, excluding the minicar line. Nighttime work at the Okazaki factory will stop from February 2. The cuts are part of Mitsubishi's move to reduce planned output by 110,000 vehicles in the year ending March because of tumbling sales in Japan, the U.S. and Europe. Japan's vehicle sales may fall to the lowest in 31 years in 2009, according to the country's automobile manufacturers association. Mitsubishi will also halt production of passenger cars on every Friday next month at the Mizushima factory in western Japan. The Okazaki plant in central Japan will close every Saturday in January and for another five days. Toyota, on December 22, 2008, slashed profit forecasts amid a sales slump. The Japanese automaker, often held up with Honda as a success story for the rest of the auto industry to follow, said it expected a slim profit margin of US$555 million for the year ending in March 2009. Toyota had originally been projecting a massive profit of $13.9 billion for that period. Their sales in the United States were down 34 per cent and were down 34 per cent in Europe as well. They expected a loss which would be the equivalent of about $2 billion (CDN)." Toyota President Katsuaki Watanabe said the impact on the company from the struggling global economy has been "faster, wider and deeper than expected." "The change that has hit the world economy is of a critical scale that comes once in a hundred years," Watanabe said, speaking in Nagoya.http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081222/Toyota_sales_081222/20081222?hub=CTVNewsAt11 https://web.archive.org/web/20090220093757/http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081222/Toyota_sales_081222/20081222?hub=CTVNewsAt11 dead 2009-02-20 Toyota slashes profit forecasts amid sales slump CTV.ca 2008-12-04 2009-01-12 Facing its first loss in nearly sixty years, Toyota sought loans from the Japanese government.https://www.bloomberg.com/apps/news?pid=20601087&sid=aBA0r9UqrGVo&refer=home Toyota, Facing First Loss in 59 Years, Seeks Loans From Japan Bloomberg.com 2009-03-03 2009-05-01 live https://web.archive.org/web/20090123033802/http://www.bloomberg.com/apps/news?pid=20601087 2009-01-23 On November 4, 2009, Toyota announced its immediate withdrawal from Formula One, ending the team's involvement in the sport after eight seasons. See also 2009–2010 Toyota vehicle recalls. South Korea 220px|thumb|right|The Hyundai Genesis named the 2009 North American Car of the Year South Korean automakers have been generally much more profitable than their US and Japanese counterparts, recording strong growth even in depressed markets such as the United States.Neff John http://www.autoblog.com/2008/07/01/by-the-numbers-june-2008-not-that-bad-edition/ By the Numbers June 2008: Not That Bad Edition Autoblog 2008-07-01 2009-01-12 https://web.archive.org/web/20090210051514/http://www.autoblog.com/2008/07/01/by-the-numbers-june-2008-not-that-bad-edition/ 10 February 2009 live Despite a global economic slowdown, Hyundai-Kia successfully managed to overtake Honda Motor in 2008 as the world's 5th largest automaker, climbing eight rankings in less than a decade.Harley Michael http://www.autoblog.com/2008/07/04/hyundai-kia-pass-honda-to-become-worlds-5th-largest-automaker/ Hyundai-Kia pass Honda to become world's 5th largest automaker Autoblog 2008-07-04 2009-01-12 https://web.archive.org/web/20090207193408/http://www.autoblog.com/2008/07/04/hyundai-kia-pass-honda-to-become-worlds-5th-largest-automaker/ 7 February 2009 live Hyundai-Kia continued its rapid success in 2009, when only a year after overtaking Honda, it surpassed Ford Motor as the world's 4th largest automaker.http://www.sgcarmart.com/news/article.php?AID=2481 Hyundai-Kia overtakes Ford to become the fourth biggest carmaker | Hyundai Car News sgCarMart 2010-05-01 live https://archive.today/20120630084547/http://www.sgcarmart.com/news/article.php?AID=2481 2012-06-30 Hyundai-Kia's continued success was unusual at a time when most automakers saw their sales falling sharply, with leading automaker GM even filing for bankruptcy. Hyundai-Kia took significant advantage of the prolonged automotive crisis by producing affordable yet high quality and well designed vehicles.December 2010 Rapid globalization has seen state of the art factories being built in several countries including Slovakia, the United States and China. The manufacturing facilities have been geared-up to build products that are designed and engineered for local markets. The Kia Cee'd is a leading example, being designed, developed and engineered in Germany and built in Slovakia.Joseph Noah http://www.autoblog.com/2009/08/18/hyundai-kia-overtakes-ford-as-worlds-4th-largest-automaker/ Hyundai-Kia overtakes Ford to become world's 4th largest automaker — Autoblog Autoblog.com 2009-08-18 2010-05-01 live https://web.archive.org/web/20090821073215/http://www.autoblog.com/2009/08/18/hyundai-kia-overtakes-ford-as-worlds-4th-largest-automaker 2009-08-21 Unlike others, this crisis turned into an opportunity for many South Korean automakers. Hyundai, a korean automaker, offered customers who have lost their jobs to return a new-car purchase for a refund.Terlep Sharon January 6, 2009 Hyundai Plans 'Giveback' Program on Cars https://www.wsj.com/articles/SB123120314231055825 2024-04-11 The Wall Street Journal en-US The continued growth and success is attributable to the country's fuel-efficient and well-equipped, yet affordable cars with generous warranties, such as the Kia Picanto, Kia Cee'd and Hyundai i30. These models attracted global consumers at a time of severe economic recession, rapidly rising oil prices and increasing environmental concerns. South Korean automakers therefore had a competitive advantage against expensive luxury vehicles and SUVs from US, Japanese and German automakers. During the fourth quarter of 2008 to the first quarter of 2009, which was the height of this automotive crisis, the extremely weak South Korean won, especially against the US dollar and Japanese yen, significantly boosted the price competitiveness of South Korean exports in key markets. Another factor that helped maintain this momentum was an increasingly improving brand awareness, attributable to the introduction of the country's own luxury vehicles such as the Hyundai Genesis and Hyundai Genesis Coupe, which received highly positive awards in the press and reviews. Hyundai's brand grew by 9% in 2008, surpassing Porsche and Ferrari, while it used the Super Bowl football broadcast, the world's most expensive commercial air time, to promote the Hyundai brand in the United States.http://www.interbrand.com/best_global_brands.aspx Best Global Brands List | 2009 Interbrand 2010-05-01 https://web.archive.org/web/20100429084236/http://www.interbrand.com/best_global_brands.aspx 29 April 2010 dead Nonetheless, South Korean automakers were not completely immune to this automotive crisis and in December 2008 Hyundai Motor Company had begun reducing production at plants in the U.S., China, Slovakia, India and Turkey because of sluggish demand. The company missed an earlier projection of 4.8 million units for 2008 and announced a freeze of wages for administrative workers and shortened factory operations as demand weakened amid the 2008 financial crisis.https://www.bloomberg.com/apps/news?pid=20601087&sid=a7K6P9J56vh8&refer=home Hyundai Motor, Kia to Freeze Some Wages, Cut Output (Update) December 22, 2008 Bloomberg.com 2008-12-22 live https://web.archive.org/web/20090122020044/http://www.bloomberg.com/apps/news?pid=20601087 January 22, 2009 South Korea's fourth largest automaker, SsangYong Motor, owned by the Chinese automobile manufacturer SAIC (Shanghai Automotive Industry Corporation), is the worst affected company in this crisis as it manufactures mainly heavy petroleum consuming SUVs. The carmaker recorded its fourth straight quarterly losses by the end of 2008 with red ink of $20.8 million in the third quarter. Also during the July to September period, sales dropped 63 percent to 3,835 vehicles. Its production lines have been idle since December 17 as part of efforts to reduce its inventory. The automaker has halted production twice previously this year. In December 2008, SAIC gave an ultimatum to the SsangYong union to accept its restructuring plan or face the parent company's withdrawal, which, if implemented, would mean certain bankruptcy.Oh Young-jin Kim Hyun-cheol https://www.koreatimes.co.kr/www/news/biz/2008/12/123_36752.html Tech Leak Pits Union Against Ssangyong Owner The Korea Times 2008-12-25 2009-01-12 https://web.archive.org/web/20090123091000/http://koreatimes.co.kr/www/news/biz/2008/12/123_36752.html 23 January 2009 live A 70% share of SsangYong was acquired by India's Mahindra & Mahindra Limited in February 2011. However, the South Korean Ministry of Knowledge Economy said that there will be no liquidity provision at the government level for five automakers - Hyundai, Kia, GM Daewoo, Samsung Renault and Ssangyong."We have no plans to inject liquidity into the carmakers," a ministry official said. "It has been repeatedly made clear." Taiwan 220px|thumb|right|Luxgen URX As part of Luxgen global expansion, the first overseas sale was made in Oman in 2010, with a plan to focus on the Middle East, Latin America, Central America and South America, Russia, mainland China and Southeast Asia car markets.http://autonews.gasgoo.com/Detail2020.aspx?ClassId=2&ArticleId=1015005 Taiwanese car brand Luxgen to go international Gasgoo Europe In Europe where car sales had also drastically decreased, consideration was being given to financial support for the automotive industry, particularly in France, Germany and Italy. German Foreign Minister Frank-Walter Steinmeier and Jean-Claude Juncker, Luxembourg's Prime Minister and head of the Eurogroup of single currency nations, discussed the possibility of a common rescue package to be agreed by all the EU member states.Germany's Steinmeier Calls for EU to Rescue Ailing Car Industry. Deutsche Welle https://web.archive.org/web/20090114120647/http://www.dw-world.de/dw/article/0,,3801809,00.html 2009-01-14 . Retrieved 19 November 2008. After 6 years of decline, in February 2014 car registration for a year increased to 894,730 vehicles and for subsequent 6 months the sales increased as expected with the price cuts and economic revival.https://www.bloomberg.com/news/2014-03-18/european-car-sales-jump-7-6-as-price-cuts-help-renault.html European Car Sales Jump 7.6% as Price Cuts Help Renault Mathieu Rosemain March 18, 2014 Bloomberg live https://web.archive.org/web/20150116154747/http://www.bloomberg.com/news/2014-03-18/european-car-sales-jump-7-6-as-price-cuts-help-renault.html January 16, 2015 France On November 20, 2008, French automobile manufacturer PSA Peugeot Citroen predicted sales volumes would fall by at least 10% in 2009, following a 17% drop in the current quarter. As a result, it planned to cut 2,700 jobs.http://news.bbc.co.uk/2/hi/business/7739194.stm Peugeot Citroen cuts 2,700 jobs. BBC News. 20 November 2008 BBC News 2008-11-20 2010-05-01 live https://web.archive.org/web/20090930092902/http://news.bbc.co.uk/2/hi/business/7739194.stm 30 September 2009 On 11 February 2009, PSA announced it would cut 11,000 jobs worldwide. However, none of these are expected to be in France.http://news.bbc.co.uk/1/hi/business/7882913.stm Business | Peugeot Citroen cuts 11,000 jobs BBC News 2009-02-11 2009-05-01 live https://web.archive.org/web/20090214140733/http://news.bbc.co.uk/1/hi/business/7882913.stm 2009-02-14 Renault announced a net profit for 2008 of 599 million euros for the 2008 financial year. This was a 78% drop in profits from the 2007 financial year. European sales fell 4% and worldwide sales 7%, forcing Renault to abandon their 2009 growth targets.http://news.bbc.co.uk/1/hi/business/7885609.stm Business | Renault sees 78% fall in profit BBC News 2009-02-12 2009-05-01 live https://web.archive.org/web/20090215193512/http://news.bbc.co.uk/1/hi/business/7885609.stm 2009-02-15 This however made Renault one of the few car makers to return a profit. Renault consistently struggled to return profits in the 1990s. France/Germany On November 24, 2008, French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed to support the crisis-stricken automobile industry in France and Germany.http://www.nytimes.com/2008/11/24/business/worldbusiness/24iht-24euecon.18101855.html?_r=0 France and Germany pledge auto aid The New York Times unfit https://archive.today/20120919154416/http://www.nytimes.com/2008/11/24/business/worldbusiness/24iht-24euecon.18101855.html?_r=0 2012-09-19 Italy thumb|right|220px|Fiat and Chrysler hoped smaller models like the Fiat Grande Punto could be successful in the U.S. market. On December 16, 2008 Fiat in Italy announced that it will extend its temporary plant closures in Italy by a month; the Pomigliano d'Arco, the main plant for its Alfa Romeo cars will be shut for four weeks.https://www.reuters.com/article/rbssAutoTruckManufacturers/idUSLG17640720081216 Fiat extends temporary plant closure programme 2008-12-26 reuters.com 2008-12-16 live https://web.archive.org/web/20090216194048/http://www.reuters.com/article/rbssAutoTruckManufacturers/idUSLG17640720081216 2009-02-16 However, on February 20, 2009, reacting to actions by the Italian government to stimulate the automotive sector, Fiat said its plant closures would be curtailed.Feb 21, 2009 [BUSINESS NEWS BRIEFS] : AUTOS : Fiat cancels planned factory shutdowns Detroit Free Press BUSINESS 10A Newspapers.com 362646628, 362646145. 436988069. The company also forecast that sales in Europe will drop by 14 percent in 2009. On January 20, 2009 the company announced that it had entered into an agreement, subject to regulatory approvals, to acquire 35% of Chrysler. Fiat's 35% stake in Chrysler would not involve a conventional sale of shares, but would be achieved in return for allowing Chrysler to utilise some of Fiat's fuel efficient technologies (Chrysler's February submission to the U.S. government included a commitment to produce nine Fiat-derived vehicles over a four-year period starting in 2010, including four hybrid-electric and battery-electric models).http://www.edmunds.com/insideline/do/News/articleId=142367 Chrysler Plans To Sell Nine Fiat-Based Vehicles by 2014 Edmunds.com 2009-02-19 2009-05-01 live https://web.archive.org/web/20090222143334/http://www.edmunds.com/insideline/do/News/articleId=142367 2009-02-22 Chrysler would be accorded access to Fiat's sales outlets in Europe, while in reciprocation Fiat will also gain access to Chrysler's dealership network in the U.S., where it is predicted smaller models such as the Fiat Grande Punto may be successful.http://news.bbc.co.uk/1/hi/business/7839542.stm Business | Fiat and Chrysler create alliance BBC News 2009-01-20 2009-05-01 live https://web.archive.org/web/20090303094455/http://news.bbc.co.uk/1/hi/business/7839542.stm 2009-03-03 In the past, Fiat has had trouble gaining a foothold in the American markets, whilst Chrysler has never held a strong market share in Europe since it sold its UK based Rootes Group and France based Simca to PSA Peugeot Citroen in the 1980s. On January 22, 2009, Fiat announced a 19% drop in revenues in the last three months of 2008. Italian Prime Minister Silvio Berlusconi said the government would meet to discuss the issue.http://news.bbc.co.uk/1/hi/business/7845015.stm Business | Fiat reports big fall in revenues BBC News 2009-01-22 2009-05-01 live https://web.archive.org/web/20090124224811/http://news.bbc.co.uk/1/hi/business/7845015.stm 2009-01-24 Russia Automotive industry in Russia 240px|thumb|right|Statistics of new car sales in Russia from 1999 to 2023, showing a sharp decrease in 2009 with a recovery by 2012 Russia's automotive industry was hit hard by the Late 2000s recession, which started from United States. Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in 2009. Lorry production fell from 256,000 to 91,000 in the same period.http://www.gks.ru/bgd/regl/b10_12/IssWWW.exe/Stg/d02/14-23.htm BASIC INDICATORS OF ORGANISATIONS BY KIND OF ECONOMIC ACTIVITY "MANUFACTURE OF TRANSPORT MEANS AND EQUIPMENT" Federal Statistics Agency 2010 live https://web.archive.org/web/20110615094332/http://www.gks.ru/bgd/regl/b10_12/IssWWW.exe/Stg/d02/14-23.htm 2011-06-15 In late 2008, the Russian government introduced protectionistic measures, worth $5 billion, to improve the situation in the industry. This included $2 billion's worth of bailouts for troubled companies and $3 billion credits to buyers of Russian cars.https://www.ft.com/content/41daa16e-cf70-11dd-abf9-000077b07658 Car import curbs have Russians on streets Financial Times 2008-12-21 live https://web.archive.org/web/20090606045542/http://www.ft.com/cms/s/0/41daa16e-cf70-11dd-abf9-000077b07658.html#axzz1EEyfqF7s 2009-06-06 Prime minister Vladimir Putin described the move as vital in order to save jobs.Tom Parfitt https://www.theguardian.com/world/2008/dec/22/russia-global-economy-cars Protesters beaten as anger grows at Russian car import tax 22 December 2008 Moscow The Guardian 2009-01-12 https://web.archive.org/web/20090114123351/http://www.guardian.co.uk/world/2008/dec/22/russia-global-economy-cars 14 January 2009 live The tariffs for imported foreign cars and trucks were increased to a minimum 50% and 100%, respectively. The tariffs are linked to engine size of the vehicle. The increased duties led to protests in Russian cities, most notably in Vladivostok, as the import of Japanese cars is an important sector of the city's economy.March 2023 The most efficient anti-crisis measure executed by the Russian government was the introduction of a car scrappage scheme in March 2010. Under the scheme, buyers of new cars can receive a subsidy which is 600,000 rubles ($20,000) at maximum.http://rbth.ru/articles/2010/06/05/car_sector_stalls_foreigners_still_investing.html Russia's car sector stalls, but foreigners still investing Russia Beyond the Headlines 2010-06-05 2011-02-24 2011-10-24 https://web.archive.org/web/20111024113502/http://rbth.ru/articles/2010/06/05/car_sector_stalls_foreigners_still_investing.html dead Sales of Russia's largest carmaker Avtovaz doubled in the second quarter of 2010 as a result, and the company returned to profit.https://www.bbc.co.uk/news/10611477 Avtovaz in profit thanks to Russia car scrappage scheme BBC News 2010-06-12 live https://web.archive.org/web/20110629095711/http://www.bbc.co.uk/news/10611477 2011-06-29http://news.bbc.co.uk/2/hi/business/8551332.stm What will save the Russian car industry? BBC News 2010-03-07 Konstantin Rozhnov live https://web.archive.org/web/20100311032826/http://news.bbc.co.uk/2/hi/business/8551332.stm 2010-03-11 Spain Spanish automobile manufacturer SEAT (a subsidiary of the Volkswagen Group) cut production at its Martorell plant by 5% on 7 October 2008, due to a fall in general sales. This affected 750 employees and continued until July 2009.SEAT adjusts production at Martorell plant https://web.archive.org/web/20090224145759/http://seatcupra.net/index.php?option=com_content&task=view&id=1012&Itemid=1 2009-02-24 Seatcupra.net SEAT is still continuing to install solar panels on its Martorell plant near Barcelona.Lampinen Megan 29 January 2008 Spain: SEAT to install solar panels at Martorell plant Automotive World Synesis Media Limited RF: 66045. AUTOW00020080130e41t0000h, AUTOW00020080129e41t00006.5 April 2024 H.M. King Felipe VI visits the construction site of SEAT S.A.'s new battery assembly plant Gulf Oil & Gas Universal Solutions S.A.E. SyndiGate Media Inc. GUONGA0020240405ek4500096.Djunisic Sladjana December 1, 2023 Spanish car maker SEAT to install 21 MW of self-consumption solar https://renewablesnow.com/news/spanish-car-maker-seat-to-install-21-mw-of-self-consumption-solar-841988/ live https://web.archive.org/web/20240411174517/https://renewablesnow.com/news/spanish-car-maker-seat-to-install-21-mw-of-self-consumption-solar-841988/ 2024-04-11 2024-04-11 Renewables Now30 November 2023 SEAT S.A. to install 39,000 new solar panels / SEAT S.A. will install 39,000 new solar panels to triple its capacity to self-generate renewable energy https://www.seat.co.uk/about-seat/news-events/corporate/seat-sa-to-install-39000-new-solar-panels.html live https://web.archive.org/web/20240411174347/https://www.seat.co.uk/about-seat/news-events/corporate/seat-sa-to-install-39000-new-solar-panels 2024-04-11 2024-04-11 SEAT UK en-GB Sweden On December 11, 2008, the Swedish government provided its troubled auto makers, Volvo and Saab, with support amounting to SEK 28 billion (3.5 billion USD). The two companies had requested assistance, faced with the financial difficulties of their U.S. owners Ford and General Motors. The plan consists of a maximum of SEK 20 billion in credit guarantees, and up to SEK 5 billion in rescue loans.Swedish car firms get bail-out. BBC News, 11 December 2008 https://web.archive.org/web/20081212065844/http://news.bbc.co.uk/2/hi/business/7777395.stm 12 December 2008 . On 18 February 2009 General Motors warned Saab may fail within ten days, should the Swedish government not intervene.http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article5757562.ece Saab may go bust in 10 days, warns GM - Times Online The Times 2009-02-18 2009-05-01 London Robin Pagnamenta dead https://web.archive.org/web/20110611201409/http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article5757562.ece 2011-06-11 On 20 February, an administrator was appointed to restructure Saab and assist in it becoming independent of its troubled parent General Motors. General Motors have confirmed their intention to sell their Swedish subsidiary, Saab.http://news.bbc.co.uk/1/hi/business/7901027.stm Business | Saab aims to survive without GM BBC News 2009-02-20 2009-05-01 live https://web.archive.org/web/20090223224433/http://news.bbc.co.uk/1/hi/business/7901027.stm 2009-02-23 Of Sweden's 9 million population, 140,000 work in the car industry and they account for 15% of exports. United Kingdom In the United Kingdom, Jaguar Land Rover, now owned by Tata Motors, was seeking a $1.5 billion loan from the government to cope with the credit crisis.24 November 2008 Car firm in talks with government http://news.bbc.co.uk/nol/ukfs_news/mobile/newsid_7740000/newsid_7745900/7745935.stm live https://web.archive.org/web/20240411204036/http://news.bbc.co.uk/nol/ukfs_news/mobile/newsid_7740000/newsid_7745900/7745935.stm 2024-04-11 2024-04-11 BBC News Online England en-GB On 22 December 2008, Tata declared that it would inject "tens of millions" of pounds into the company it had acquired from Ford Motor Corporation in early 2008. British Prime Minister Gordon Brown also stated the intention to help out car industry in U.K.http://ibnlive.in.com/news/tata-motors-announces-bailout-plan-for-jaguar/81085-7.html?from=rssfeed Tata Motors announces bailout plan for Jaguar December 22, 2008 CNN-IBN 2008-12-22 dead https://web.archive.org/web/20090215024147/http://ibnlive.in.com/news/tata-motors-announces-bailout-plan-for-jaguar/81085-7.html?from=rssfeed February 15, 2009 On 8 January 2009, Nissan UK announced it was to shed 1200 jobs from its Washington, Tyne and Wear factory in North East England.http://news.bbc.co.uk/1/hi/england/wear/7818043.stm Nissan plant to shed 1,200 jobs BBC News 2009-01-08 2009-01-12 https://web.archive.org/web/20090109233623/http://news.bbc.co.uk/1/hi/england/wear/7818043.stm 9 January 2009 live This announcement was made, despite the plant recently being hailed as the most efficient in Europe.http://news.bbc.co.uk/1/hi/business/1411386.stm UK car plants most efficient in Europe BBC News 2001-06-28 2009-01-12 live https://web.archive.org/web/20040710163451/http://news.bbc.co.uk/1/hi/business/1411386.stm 2004-07-10 General Motors UK subsidiary Vauxhall Motors, whose brand is the second most popular in the UKFebruary 2010 has two bases in the UK, a factory in Ellesmere Port, Cheshire and their headquarters and design and development centre in Luton, Bedfordshire. It is as yet unknown whether these plants will be affected by the GM cutbacks. The group along with their sister subsidiary, Opel of Germany, was supposed to be sold in their majority to Magna International, an Austro-Canadian company who supply many parts to large car companies, but General Motors cancelled the transaction. UK bus manufacturer Optare received an order from Arriva in November 2008 for the manufacture of 53 buses in a contract worth over £6million, securing 500 jobs at the company's Assembly factory in Cross Gates, Leeds, West Yorkshire and the parts centre in Cumbernauld, North Lanarkshire.http://s261370817.websitehome.co.uk/news_detail.php?ID=48&Index=1 Optare: Latest News: Press Releases S261370817.websitehome.co.uk 2009-05-01 dead https://web.archive.org/web/20090112113431/http://s261370817.websitehome.co.uk/news_detail.php?ID=48&Index=1 January 12, 2009 UK Van and commercial vehicle manufacturer LDV Group asked the UK government for a £30 million bridging loan to facilitate a management buyout of the group. On the same day this was refused.http://news.bbc.co.uk/1/hi/business/7904918.stm Business | LDV told 'no more government aid' BBC News 2009-02-23 2009-05-01 live https://web.archive.org/web/20090225023022/http://news.bbc.co.uk/1/hi/business/7904918.stm 2009-02-25 LDV has since said it has a viable future and intends to become the first volume producer of electric vans should the management buyout take place. Production at LDV's factory in Birmingham, West Midlands (where it employed 850 staff) has been suspended since December 2008 due to falling demand.http://news.bbc.co.uk/1/hi/business/7907490.stm Business | LDV says firm has viable future BBC News 2009-02-24 2009-05-01 live https://web.archive.org/web/20090227083652/http://news.bbc.co.uk/1/hi/business/7907490.stm 2009-02-27 Eventually, no buyout materialised and LDV was declared defunct on 15 October 2009. Along with several other countries, the UK government launched a scrappage incentive scheme in order to support the crisis stricken industry. Cars registered prior to 31 July 1999, later extended to 29 February 2000, were eligible to be scrap in exchange for a discount of £2000 on a new car, half of which was provided by the government and the other half by the dealer. The scheme came to an end on 31 March 2010. North America Canada Effects of the 2008–2010 automotive industry crisis on Canada The Canadian auto industry was closely linked to the U.S., due to the Automotive Products Trade Agreement and, later, the North American Free Trade Agreement (NAFTA), and experienced similar difficulties. United States Effects of the 2008–2010 automotive industry crisis on the United States thumb|US automobile manufacturing, 1993–2025 The crisis in the United States is mainly defined by the government rescue of both General Motors and Chrysler. Ford secured a line of credit in case they require a bridging loan in the near future. Car sales declined in the United States, affecting both US based and foreign car manufacturers. The bridging loans led to greater scrutiny of the U.S. automotive industry in addition to criticism of their product range, product quality, high labour wages, job bank programs. The government-backed rescue of the American auto industry gained the support of 37% of Americans in 2009 according to a CNN/Opinion Research Corporation poll, and it gained the support of 56% of Americans in 2012 according to a Pew Research Center poll.Reeve, Elspeth (February 23, 2012).Most Americans Now Think Auto Bailout Was a Good Idea https://web.archive.org/web/20120430014115/http://www.theatlanticwire.com/politics/2012/02/most-americans-now-think-auto-bailout-was-good-idea/49106/ 2012-04-30 .The Atlantic Wire. Chrysler was forced into bankruptcy in April 2009 and GM in May.http://www.businessweek.com/bwdaily/dnflash/content/apr2009/db20090430_841531.htm Chrysler Files for Bankruptcy - Businessweek 2016-03-10 dead https://web.archive.org/web/20160311123005/http://www.businessweek.com/bwdaily/dnflash/content/apr2009/db20090430_841531.htm 2016-03-11 http://www.caranddriver.com/news/what-you-need-to-know-about-the-gm-bankruptcy-car-news What You Need to Know About the GM Bankruptcy caranddriver.com 16 June 2009 live https://web.archive.org/web/20160311063816/http://www.caranddriver.com/news/what-you-need-to-know-about-the-gm-bankruptcy-car-news 2016-03-11 While the "Big Three" U.S. market share declined from 70% in 1998 to 53% in 2008, global volume increased particularly in Asia and Europe.https://money.cnn.com/news/specials/detroitcrisis/ Fortune - Detroit's Downfall Money.cnn.com 2010-05-01 dead https://web.archive.org/web/20100806181347/https://money.cnn.com/news/specials/detroitcrisis/ 2010-08-06 The U.S. auto industry was profitable in every year since 1955, except those years following U.S. recessions and involvement in wars. U.S. auto industry profits suffered from 1971 to 1973 during the Vietnam War, during the recession in the late 1970s which impacted auto industry profits from 1981 to 1983, during and after the Gulf War when industry profits declined from 1991 to 1993, and during the Iraq War from 2001 to 2003 and 2006–09. During these periods the companies incurred much legacy debt.Fortune 500 https://web.archive.org/web/20090708090522/https://money.cnn.com/magazines/fortune/fortune500/2009/snapshots/387.html 2009-07-08 .CNN Money. Facing financial losses, the Big Three have idled many factories and drastically reduced employment levels. GM spun off many of its employees in certain divisions into independent companies, including American Axle in 1994 and Delphi in 1999. Ford spun off Visteon in 2000. The spin-offs and other parts makers have shared Detroit's downturns, as have the U.S.-owned plants in Canada. Altogether the parts makers employ 416,000 people in the U.S. and Canada. General Motors alone is estimated to have lost $51 billion in the three years before the start of the 2008 financial crisis. GM is set to reacquire factories from its Delphi subsidiary during its Chapter 11 restructuring.Taylor Alex https://money.cnn.com/2008/11/24/news/companies/taylor_gm.fortune/index.htm?postversion=2008112410 Fortune - What's Ahead for GM? Money.cnn.com 2008-11-24 2010-05-01 dead https://web.archive.org/web/20110605165511/https://money.cnn.com/2008/11/24/news/companies/taylor_gm.fortune/index.htm?postversion=2008112410 2011-06-05 The 2005 Harbour Report estimated that Toyota's lead in benefits cost advantage amounted to $350 US to $500 US per vehicle over North American manufacturers. The United Auto Workers agreed to a two-tier wage in recent 2007 negotiations, something which the Canadian Auto Workers has so far refused.http://www.canadiandriver.com/thenews/2008/03/27/caw-says-%E2%80%9Cno-two-tier-wages%E2%80%9D-in-bargaining.htm CAW says "no two-tier wages" in bargaining Toronto, Ontario CanadianDriver 2008-03-27 2009-01-12 https://web.archive.org/web/20090108194755/http://www.canadiandriver.com/thenews/2008/03/27/caw-says-%E2%80%9Cno-two-tier-wages%E2%80%9D-in-bargaining.htm 8 January 2009 live Jared Bernstein, the chief economist of Vice President Joe Biden, noted in an interview with WWJ-AM in Detroit that most of the 2007 contract concessions apply only to new hires, while older workers "still benefit from contracts that were signed a long time ago."TOM KRISHER and KEN THOMAS – April 2, 2009 https://www.google.com/hostednews/ap/article/ALeqM5j_Mvl4r4i9ue6CqUskMUZticqNuwD97AJQ3G1 The Associated Press: GM readies giveback proposals for bondholders, UAW 2009-04-02 2009-05-01 https://web.archive.org/web/20090406084916/https://www.google.com/hostednews/ap/article/ALeqM5j_Mvl4r4i9ue6CqUskMUZticqNuwD97AJQ3G1 6 April 2009 dead However, only 30% of parts used by the Big Three employ union labor, with 70% sourced from non-union labor. Delphi, which was spun off from GM in 1999, filed for Chapter 11 bankruptcy after the UAW refused to cut their wages and GM is expected to be liable for a $7 billion shortfall.Silke Sharon https://www.usatoday.com/money/industries/manufacturing/2005-10-08-delphibankruptcy_x.htm Delphi files Chapter 11 after union, GM talks break down DETROIT USA TODAY 2005-10-08 2009-01-12 live https://web.archive.org/web/20090205213106/http://www.usatoday.com/money/industries/manufacturing/2005-10-08-delphibankruptcy_x.htm 2009-02-05 David Shepardson http://www.detnews.com/apps/pbcs.dll/article?AID=/20080409/AUTO01/804090420 Parting shot: Delphi exec Steve Miller blasts UAW in new book WASHINGTON The Detroit News 2008-04-09 2009-01-12Bankruptcy Is Delphi's Trump Card https://www.bloomberg.com/news/articles/2005-08-07/bankruptcy-is-delphis-trump-card Bloomberg.com 8 August 2005 live https://web.archive.org/web/20161012010356/http://www.bloomberg.com/news/articles/2005-08-07/bankruptcy-is-delphis-trump-card 2016-10-12 In order to improve profits, the Detroit automakers made agreements with unions to reduce wages while making pension and health care commitments. GM, for instance, at one time picked up the entire cost of funding health insurance premiums of its employees, their survivors and GM retirees, as the U.S. did not have a universal health care system.Dietmar Henning http://www.wsws.org/articles/2004/nov2004/opel-n17.shtml German auto union head suggests GM cut US costs World Socialist Web Site 17 November 2004 2009-01-12 https://web.archive.org/web/20090215113513/http://www.wsws.org/articles/2004/nov2004/opel-n17.shtml 15 February 2009 live With most of these plans chronically underfunded in the late 1990s, the companies have tried to provide retirement packages to older workers, and made agreements with the UAW to transfer pension obligations to an independent trust.Allan Sloan https://www.washingtonpost.com/wp-dyn/articles/A64599-2005Apr18.html General Motors Getting Eaten Alive by a Free Lunch Washington Post April 19, 2005 E03 2009-01-12 live https://web.archive.org/web/20081011195333/http://www.washingtonpost.com/wp-dyn/articles/A64599-2005Apr18.html October 11, 2008 Nonetheless, non-unionized Japanese automakers, with their younger American workforces (and far fewer American retirees) will continue to enjoy a cost advantage.Jeff Green https://www.theglobeandmail.com/servlet/story/LAC.20060308.IBGM08/TPStory/?query= GM freezes pension plans to slash costs Bloomberg News globeandmail.com 2006-03-08 2009-01-12 Toronto https://web.archive.org/web/20090215102842/http://www.theglobeandmail.com/servlet/story/LAC.20060308.IBGM08/TPStory/?query= 15 February 2009 liveJames Daw Tony Van Alphen http://register.thestar.com/Business/article/471472 GM pension faces huge shortfall TheStar.com 2008-08-02 2009-01-12 Toronto https://web.archive.org/web/20090215050942/http://register.thestar.com/Business/article/471472 15 February 2009 dead The not-so-Big Three 2008-06-03 CBC CBC News http://www.cbc.ca/news/background/autos/bigthree.html 2008-08-08 https://web.archive.org/web/20080702214438/http://www.cbc.ca/news/background/autos/bigthree.html 2 July 2008 live thumb|right|220px|A Chevrolet TrailBlazer, one of General Motors' SUVs Despite the history of their marques, many long running cars have been discontinued or relegated to fleet sales,Krisher Tom 19 October 2006 Associated Press Writer Giovanna Dell'Orto in Atlanta contributed to this report. Ford Set to Produce Last Taurus RF: "7", IPC: "tagpf1apon sel----- catf 1310", IPD: "Financial/Business The Last Taurus D8KRSO603", APRS000020061019e2aj0032y, 14168D4EA8CBDCE8 Associated Press cs2 & 19 October 2006 Summary Box: Ford Taurus ends production RF: "7", IPC: "taggadsg selgaga- catn", IPD: "AP State Wires: Georgia US State/Regional The Last Taurus Summary Box D8KRR5K03", APRS000020061019e2aj00332, 1152D144A1797540 Associated Press cs2. Both parts published in: 20 October 2006 Ford puts brakes on revolutionary Taurus / Sign of the times Charleston Gazette P2C CGAZ000020061021e2ak0006g, 114E66C2B616F068 cs2; October 20, 2006 AUTOMOBILES - Taurus' long journey ending - Ford sedan altered the course of driving in U.S. / END OF THE LINE https://www.chron.com/business/article/Taurus-long-journey-ending-1908146.php Houston Chronicle 3 114E5AC7DDAFB758 cs2; October 20, 2006 End of the line for Taurus / more about the taurus The Repository Canton, OH 124911B6CD4AB5C0 cs2; October 20, 2006 AUTOMOTIVE: END OF THE LINE FOR TAURUS: Ford's top-selling car to end production next week / THE REAR-VIEW MIRROR (South Florida) Sun-Sentinel 3D Fort Lauderdale, FL 114E34AA5718B070, Newspapers.com 285728633 cs2; and other newspapers.October 24, 2006 Product is still key in auto fortunes https://detroitnews.newsbank.com/doc/news/114F7F4E18A8BA98?search_terms=Ford%2BTaurus&date_from=2006-10-22&date_to=2006-10-24&text=Ford%20Taurus&content_added=&pub%255B0%255D=DTNB&pdate=2006-10-24 The Detroit News Editorials 00 DTNS000020061024e2ao00009. 114F7F4E18A8BA98. Final Ford Taurus interview ABC News https://www.youtube.com/watch?v=CwuCm8hNXgI 2007-07-26 live https://web.archive.org/web/20160102023705/https://www.youtube.com/watch?v=CwuCm8hNXgI 2016-01-02 http://www.autoblog.com/2006/10/19/so-long-friend-ford-producing-the-last-taurus-next-week/ So long, friend. Ford producing last Taurus next week Autoblog 2007-07-26 live https://web.archive.org/web/20070926104518/http://www.autoblog.com/2006/10/19/so-long-friend-ford-producing-the-last-taurus-next-week/ 2007-09-26 as GM, Ford and DaimlerChrysler shifted away resources from midsize and compact cars to lead the "SUV Craze". Since the late 1990s, over half of their profits have come from light trucks and SUVs, while they often could not break even on compact cars unless the buyer chose options. http://www.thetruthaboutcars.com/ford-taurus-oedipus-wrecks/ Ford Taurus: Oedipus Wrecks The Truth About Cars 2008-04-05 live https://web.archive.org/web/20090108175651/http://www.thetruthaboutcars.com/ford-taurus-oedipus-wrecks/ 2009-01-08 Ron Harbour, in releasing the Oliver Wyman's 2008 Harbour Report, stated that many small "econoboxes" of the past acted as loss leaders, but were designed to bring customers to the brand in the hopes they would stay loyal and move up to more profitable models. The report estimated that an automaker needed to sell ten small cars to make the same profit as one big vehicle, and that they had to produce small and mid-size cars profitably to succeed, something that the Detroit three have not yet done.ALISA PRIDDLE http://www.caranddriver.com/reviews/hot_lists/car_shopping/latest_news_reviews/chevrolet_volt_and_aveo_pontiac_g3_among_small_cars_that_need_big_profits_car_news Chevrolet Volt and Aveo, Pontiac G3 Among Small Cars That Need Big Profits - Car News Car And Driver June 2008 2009-01-12 https://web.archive.org/web/20090103031000/http://www.caranddriver.com/reviews/hot_lists/car_shopping/latest_news_reviews/chevrolet_volt_and_aveo_pontiac_g3_among_small_cars_that_need_big_profits_car_news 3 January 2009 live SUV sales peaked in 1999 but have not returned to that level ever since, due to higher gas prices. In the case of Chrysler Corporation, compact and mid-sized vehicles such as the Dodge Neon, Dodge Stratus and Chrysler Cirrus were produced profitably during the 1990s concurrently with more profitable larger vehicles. However, following the DaimlerChrysler merger in 1998, there was a major cost-cutting operation at the company. The result was the lowering of benchmarked standards for Chrysler to aim at. This directly led to the following in Chrysler's case. There was realignment of the Chrysler Group model range with those of GM and Ford (i.e. a skew towards larger vehicles). The Detroit Big Three had been slower to bring new vehicles to the market compared with foreign competitors. The Big Three have battled initial quality perceptions in spite of reports showing improvements.http://www.financialpost.com/news-sectors/story.html?id=1479081 No happy ending if automakers seek Chapt. 11: economist Financialpost.com 2009-04-08 2009-05-01 https://web.archive.org/web/20090410013709/http://www.financialpost.com/news-sectors/story.html?id=1479081 10 April 2009 dead Falling sales resulted in the Big Three's plants operating below capacity. GM's plants were operating at 85% in November 2005, well below the plants of its Asian competitors, and was only maintained by relying on cash incentives and subsidized leases.Stoll John D. https://www.wsj.com/articles/SB121737722208895269?mod=fpa_mostpop GM, Ford Scale Back Car Leases as Era Ends WSJ.com 2008-07-30 2009-01-12 https://web.archive.org/web/20090108144105/http://www.wsj.com/article/SB121737722208895269.html?mod=fpa_mostpop 8 January 2009 live Rebates, employee pricing, and 0% financing boosted sales but drained the automaker's cash reserves. The subprime mortgage crisis and high oil prices of 2008 caused the popularity of once best-selling trucks and SUVs to plummet. Automakers were forced to continue offering heavy incentives to help clear excess inventory.David Welch http://www.businessweek.com/autos/autobeat/archives/2008/09/the_discounting.html The discounting treadmill BusinessWeek September 2, 2008 2009-01-12 https://web.archive.org/web/20090215093444/http://www.businessweek.com/autos/autobeat/archives/2008/09/the_discounting.html 15 February 2009 dead Due to the declining residual value of their vehicles, Chrysler and GM stopped offering leases on most of their vehicles in 2008.Tom Krisher Associated Press http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/03/BUUM11IVF4.DTL&type=autos Why Honda is growing as Detroit falls behind SFGate 2008-07-03 2009-01-12 https://web.archive.org/web/20090215011635/http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2008%2F07%2F03%2FBUUM11IVF4.DTL&type=autos 15 February 2009 dead In September 2008, the Big Three asked for $50 billion to pay for health care expenses and avoid bankruptcy and ensuing layoffs, and Congress worked out a $25 billion loan.Reeves Scott November 7, 2008 Harrison Todd Automakers ask for bailout to keep wheels turning http://blogs.moneycentral.msn.com/topstocks/archive/2008/11/07/automakers-ask-for-bailout-to-keep-wheels-turning.aspx dead https://web.archive.org/web/20090210072943/http://blogs.moneycentral.msn.com/topstocks/archive/2008/11/07/automakers-ask-for-bailout-to-keep-wheels-turning.aspx 2009-02-10 2009-11-04 Top Stocks Blog MSN Money By December, President Bush had agreed to an emergency bailout of $17.4 billion to be distributed by the next administration in January and February.Sanger David E. Herszenhorn David M. Vlasic Bill December 19, 2008 Bush Aids Detroit, but Hard Choices Wait for Obama https://www.nytimes.com/2008/12/20/business/20auto.html?_r=2&hp live https://web.archive.org/web/20230724094316/https://www.nytimes.com/2008/12/20/business/20auto.html?_r=2&hp 2023-07-24 The New York Times Washington and New York NY In early 2009, the prospect of avoiding bankruptcy by General Motors and Chrysler continued to wane as new financial information about the scale of the 2008 losses came in. Ultimately, poor management and business practices forced Chrysler and General Motors into bankruptcy. Chrysler filed for chapter 11 bankruptcy protection on May 1, 2009https://www.nytimes.com/2009/05/01/business/01auto.html Chrysler Files to Seek Bankruptcy Protection The New York Times 30 April 2009 2018-02-20 live https://web.archive.org/web/20180106130442/http://www.nytimes.com/2009/05/01/business/01auto.html 2018-01-06 Rutenberg Jim Vlasic Bill New York Times. May 1, 2009. followed by General Motors a month later.https://www.nbcnews.com/id/wbna31030038 Humbled GM files for bankruptcy protection - Autos- MSNBC.com NBC News 31 May 2009 2009-06-01 live https://web.archive.org/web/20090602094006/http://www.msnbc.msn.com/id/31030038 2009-06-02 MSNBC. June 1, 2009. On June 2, General Motors announced the sale of the Hummer brand of off-road vehicles to Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., a machinery company in western China, a deal which later fell through.https://money.cnn.com/2009/06/02/news/companies/gm_hummer/index.htm?postversion=2009060207 CNN Who bought Hummer? Sichuan Tengzhong of China 2009-06-02 2010-04-26 Aaron Smith dead https://web.archive.org/web/20090819084413/https://money.cnn.com/2009/06/02/news/companies/gm_hummer/index.htm?postversion=2009060207 2009-08-19 https://www.nbcnews.com/id/wbna31059625 Chinese company to buy Hummer from GM - Autos- msnbc.com MSNBC 2009-06-24 2010-05-01 live https://web.archive.org/web/20090707112513/http://www.msnbc.msn.com/id/31059625 2009-07-07 https://www.nytimes.com/2009/06/03/business/03auto.html?_r=1&hp The New York Times Chinese Company Buying G.M.'s Hummer Brand Keith Bradsher Nick Bunkley 2009-06-03 2010-04-26 Later, GM announced that it was ending production of its Hummer, Saturn and Pontiac lines effective at the end of the 2009 model year. Effects of environmental expectations and changing product demand Environmental politics and related concerns regarding carbon emissions have heightened sensitivity to gas mileage standards and environmental protection worldwide. In a 2007 edition of his book An Inconvenient Truth, Al Gore criticized the Big Three. "They keep trying to sell large, inefficient gas-guzzlers even though fewer and fewer people are buying them." For example, Japan requires autos to achieve 45 mpgus of gasoline and China requires 35 mpgus on. The European Union requires 47 mpgus on by 2012. By comparison, U.S. autos are required to achieve only 25 mpgus on presently. Other nations have adopted standards that are increasing mpg requirements in the future. When California raised its own standards, the auto companies sued. Gore Al 2007 An Inconvenient Truth Rodale 978-0-670-06272-0 registration https://archive.org/details/inconvenienttrut00algohttp://www.climatecrisis.net/ An Inconvenient Truth - Online Climatecrisis.net 2010-05-01 https://web.archive.org/web/20100420010312/http://www.climatecrisis.net/ 20 April 2010 live The Big Three received funding for a $25 billion government loan during October 2008 to help them re-tool their factories to meet new fuel-efficiency standards of at least 35 mpgus on by 2020. The $25 billion in loans from the Department of Energy to the auto manufacturers were actually authorized by Congress early this year but not funded. Automakers could use these loans to "equip or establish facilities to produce ‘advanced technology vehicles’ that would meet certain emissions and fuel economy standards; component suppliers could borrow funds to retool or build facilities to produce parts for such vehicles."http://blogs.consumerreports.org/cars/2008/10/auto-bail-out.html Consumer Reports - $25 billion for Auto Industry Blogs.consumerreports.org 2008-10-03 2010-05-01 https://web.archive.org/web/20100420001715/http://blogs.consumerreports.org/cars/2008/10/auto-bail-out.html 20 April 2010 dead Effect of 2008 oil price shock and economic crisis thumb|350px|Medium term crude oil prices 1987–2016 In 2008, a series of damaging blows drove the Big Three to the verge of bankruptcy. The Big Three had in recent years manufactured SUVs and large pickups, which were much more profitable than smaller, fuel-efficient cars. Manufacturers made 15% to 20% profit margin on an SUV, compared to 3% or less on a car.Cloud John http://www.time.com/time/magazine/article/0,9171,1004283-6,00.html Time-Why the SUV Is All the Rage Time 2003-02-24 2010-05-01 dead https://web.archive.org/web/20100814091245/http://www.time.com/time/magazine/article/0,9171,1004283-6,00.html 2010-08-14 When gasoline prices rose above $4 per gallon in 2008, Americans stopped buying the big vehicles and Big Three sales and profitability plummeted. The 2008 financial crisis played a role, as GM was unable to obtain credit to buy Chrysler.February 2009 Sales fell further as consumer credit tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car. During 2007, nearly 2 million new U.S. cars were purchased with funds from home equity loans. Such funding was considerably less available in 2008.https://www.nytimes.com/2008/05/27/business/27auto.html Auto Industry Feels the Pain of Tight Credit Eric Dash The New York Times 27 May 2008 live https://web.archive.org/web/20180105101156/http://www.nytimes.com/2008/05/27/business/27auto.html 5 January 2018 In addition, stock prices fell as shareholders worried about bankruptcy; GM's shares fell below 1946 levels. Furthermore, the instability of the job market and individual consumers' finances discourages consumers who already have a working vehicle from taking on a new loan and payments, which affected almost all major manufacturers. The annual capacity of the industry is 17 million cars; sales in 2008 dropped to an annual rate of only 10 million vehicles made in the U.S. and Canada. All the automakers and their vast supplier network account for 2.3% of the U.S. economic output, down from 3.1% in 2006 and as much as 5% in the 1990s. Some 20% of the entire national manufacturing sector is still tied to the automobile industry. The transplants can make a profit when sales are at least 12 million; the Big Three when sales are at least 15 million.Uchitelle Louis Louis Uchitelle If Detroit Falls, Foreign Makers Could Be Buffer https://archive.nytimes.com/www.nytimes.com/2008/11/17/business/economy/17impact.html The New York Times November 17, 2008 February 15, 2025 By December 19, 2008, oil prices had fallen to $33.87 per barrel, but the automobile crisis continued.Ecuador's Correa Says He’ll Maintain U.S. Dollar https://web.archive.org/web/20100613163056/http://www.bloomberg.com/apps/news?pid=20601087 2010-06-13 , Bloomberg, December 20, 2008. See also Automotive industry Corporate welfare Lemon socialism Presidential Task Force on the Auto Industry Too big to fail Effects of the 2008–2010 automotive industry crisis on the United States Effects of the 2008–2010 automotive industry crisis on Canada References 30em External links CAR industry news. Auto Industry Financing and Restructuring Act. Capitalism and the auto crisis. Toyota losses highlight global auto collapse. GM closes plants in Wisconsin and Ohio. Crisis grips German auto industry. Thousands of jobs threatened in Swedish auto industry. European auto industry in crisis. February 2009 Restructuring Plans: General Motors Chrysler Category:2008 in economic history Category:2009 in economic history Category:2010 in economic history Category:Automotive industry Category:History of the automobile Category:Financial crises in the United States Category:Great Recession Category:Industries (economics)