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Backseat Driver: The year of dismal auto sales continues

It's hard to say whether the dismal February U.S. auto sales - down 10 perent from last year to an annualized 15.4 million - will really have an impact on Detroit's thinking, but hopefully it will.

With oil prices over $100 a barrel, gas projected to possibly hit $4 a gallon when the spring driving season starts, the collapse of the housing market - and thus collapse of pickup sales - and the credit crunch, Americans are clearly putting off big purchases for the time being.

The question is whether there has been a major change toward smaller, more fuel efficient vehicles. And if so, is Detroit ready to get on the bandwagon?

Certainly, it is interesting that Ford had solid sales increases for both its Focus and Fusion models as did Chevrolet with its Cobalt and Honda with its Civic and Fit. Meanwhile sales of light trucks - Ford's F Series, Chevrolet's Silverado and Dodge's Ram - were all down.

The problem for automakers is that trucks are much more profitable than small cars. That's partly why Detroit has ridden the truck/SUV gravy train for so long. But if market conditions are seriously changing, Detroit has to move toward smaller, more fuel efficient, alternative fuel vehicles.

The only company to report a tiny increase in sales compared with last February was Honda, up only 1 percent. All the rest were down, some dramatically. General Motor's domestic sales, for example, were off about 23 percent, Ford down 16 percent, Chrysler off 17 percent, while Toyota was down 7 percent, Nissan down 3 percent and Hyundai off 14 percent.

- Peter C. T. Elsworth

Posted by Peter C. T. Elsworth  at 10:34 AM to commentary | Permalink | Comments 0