Big Three continue to shrink

Stacey Vanek Smith Aug 2, 2006
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Big Three continue to shrink

Stacey Vanek Smith Aug 2, 2006
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MARK AUSTIN THOMAS: General Motors. Ford. DaimlerChrysler. For decades, these companies have been the giants of the auto industry not just in the US, but around the world. Well those days may be coming to an end. Ford says its sales fell 35 percent last month compared with a year ago. DaimlerChrysler saw its sales plunge 34 percent. And sales at GM dropped by almost a fifth. Stacey Vanek-Smith takes a look at the struggling auto industry.


STACEY VANEK-SMITH: The big three have been in big trouble for months.

Ford, GM and DaimlerChrysler have steadily lost market-share to Japanese models and have struggled with ballooning labor costs.

Industry analyst Lawrence Ulrick expects the US carmakers will recover but, he says, the American auto industry will never be what it once was.

LAWRENCE ULRICK: Where the bottom is, no one can say for sure. You’d like to think that they could stabilize at some point and I believe they will, but again, they will stabilize at a smaller level than anyone could have imagined 10 or 20 years ago.

Ulrich says the big three are now hanging their hopes on some new models due out this fall.

Wall Street will be watching for the release of new crossover vehicles. Crossovers are kind of like an SUV-lite. As well as upcoming hybrids for those of us flinching at the pump.

If those models don’t sell, Ulrich says there’s no telling how far the big three will fall before they regain their traction in the industry.

I’m Stacey Vanek-Smith for Marketplace.

MARK AUSTIN THOMAS: So when we talk about the Big Three, maybe we should include Toyota. Last month, Toyota outsold Ford to grab the second spot in the US market. It’s the first time that’s ever happened.

Toyota has tapped into consumers demand for vehicles that are fuel efficient.

Here’s an example: Toyota’s RAV 4, a compact wagon that averages 25 miles per gallon. It outsold Ford’s V-8 Expedition SUV that gets only 15 miles per gallon. Last July Ford won that match-up.

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