"History is a wonderful thing, if only it was true"

Thursday, April 02, 2009

Government Motors

So Washington is going to solve the auto industry's problems.

How to move the inventory?
Maybe just ban big cars, vans, SUV's ?

But Congress won't move to raise gas taxes, which might influence consumer behavior, maybe help the Highway Trust Fund.

Industry's Big Hope for Small Cars Fades - WSJ.com:

"Practically every small car in the market is stacked up at dealerships. At the end of February, Honda Motor Co. had 22,191 Fits on dealer lots -- enough to last 125 days at the current sales rate, according to Autodata Corp. In July, it had a nine-day supply, while the industry generally considers a 55- to 60-day supply healthy.

For other models the supply situation is even worse. Toyota Motor Corp. has enough Yaris subcompacts to last 175 days. Chrysler LLC has a 205-day supply of the Dodge Caliber. And Chevrolet dealers have 427 days' worth of Aveo subcompacts. At the current sales rate, General Motors Corp. could stop making the Aveo and it wouldn't run out until May 24, 2010.

'I don't think Americans really like small cars,' said Beau Boeckmann, whose family's Galpin Ford in southern California is the country's largest Ford dealer. 'They drive them when they think they have to, when gas prices are high. But we're big people and we like big cars.'

The logjam of small cars is caused in part by the recession, which has sapped sales of all types of vehicles. But it also underscores how badly gasoline prices have whipsawed the industry. A year ago, car companies rushed to react when Americans practically stopped buying large vehicles and flocked to hybrids and small cars."

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