Where’s the bottom? Last year, I can remember an auto analyst saying that domestic automakers should hit bottom sometime this year and then begin to slowly rebound. Driving home after Tuesday’s announcement that June 2008 North American auto sales had plummeted 18.3% compared with June 2007, I heard another auto analyst predict on the radio that the Big Three can’t expect a turnaround until 2010. That’s assuming that Chrysler, which posted a jaw-dropping 35.9% plunge in sales for June, is still with us by then.
So when does the bad news end for Detroit? “We don’t know when it’s going to end.” Steven Landry, Chrysler executive vice president for North American sales told journalists in a conference call on Tuesday, according to a story on Freep.com by reporter Sarah Webster.
Not exactly reassuring news, but at least Landry was being honest. Even high and mighty Toyota saw its June sales drop by 21.1% which is small comfort for Detroit as it allowed General Motors to maintain its status as the sales leader in North America.
The good news, of course, is that automakers can’t make smaller, fuel-efficient cars fast enough. Unfortunately, turning around production at a company like GM is like turning around an oil tanker.
Imagine if domestic automakers had displayed a bit of vision a few years back and decided against milking the truck and SUV cash cows until the bitter end. They, like Honda, could have posted sales gains for the month of June.
Fasten your seat belts; I get the sick feeling that the bottom we hit before rebounding is going to be rock bottom.