John on April 6, 2009 at 8:56 am
The stunning shift in consumer preferences that should make the White House’s freshly minted auto experts feel vulnerable has been reported under headlines such as “Like a Rock: Hybrid Car Sales Plummet” (Wall Street Journal, Dec. 9) and “Hybrid Car Sales Go From 60 to 0 at Breakneck Speed” (Los Angeles Times, March 17). Absent $4 gasoline, customers, those nuisances with their insufferable preferences, do not want the vehicles the politicians want them to want, even with manufacturers now offering large rebates and other incentives.
The two best-selling vehicles in America this year are large pickup trucks (Ford F-Series and Chevy Silverado). In February, Toyota sold 13,600 Tundra and Tacoma pickups and 7,232 Priuses. It sells the Prius at a loss, which it can afford to do because it makes pots of money selling pickups. Has the Car Designer in Chief, a.k.a. the president, considered the possibility that what he calls “the cars of tomorrow” will forever be that?
Clicking over to that LA Times article mentioned above, you learn:
“When gas prices came down, the priority of buying a hybrid fell off quite quickly,” said Wes Brown, a partner at Los Angeles-based market research firm Iceology. “Yet even as consumer interest declined, the manufacturers have continued to pump them out.”
[I]n their request to the Obama administration for $21.6 billion in additional bailout cash, both General Motors and Chrysler announced a hybrid onslaught.
Chrysler promised eight new hybrids or electric vehicles by 2015, and GM, which already sells eight hybrids, said 26 of the 33 cars it sells in 2015 won’t run on gas alone, including the Chevrolet Volt, a plug-in hybrid due out next year.
The hybrid flood marks a lasting commitment to a powertrain technology that currently represents only about 2% of U.S. vehicle sales and, by most accounts, is deeply unprofitable.
So, as I suspected when Obama fired Wagoner, this is about forcing automakers to produce cars that consumers manifestly do not want to buy. Is that a solution to the automakers troubles? Not at all. In fact, it’s a recipe for their complete failure. But in this, as in so many other issues, Obama knows what’s best, for GM and for you and your family.
Category: Energy & Economy |