The 4th of December 2007 was a very cold day in Detroit. GM CEO Rick Wagoner woke up, joined the heads of Chrysler and Ford and drove to Washington to beg for the survival of their industry. Something was clearly rotten in the city of Detroit. While big changes and big progress has been made since that dark day the question still remains; Is the auto industry out of crisis yet?
The short answer is yes, but nothing is ever that straightforward. While vehicle production and sales numbers look very positive, they mask some of problems which still persist. While many are progressing well, jobs are still being shed and manufacturers like Toyota are still stinging from the lesser talked about Thai floods. But these are just minor issues when you see the global picture. As shown below the global auto industry is undoubtedly back.
|Year||Global figures of vehicles produced|
The big 5 of Toyota, GM, VW, Ford and Hyundai have had a very mixed few years. While Toyota are struggling to get back to the heady days of 2007, Hyundai are eating into the top 4. Ford is losing its footing in a big way and the manufacturer will struggle to keep up, especially considering its less than favourable financial position. All in all the industry is back to the usual rough and tumble competition for the number one spot. Despite the deep cuts in jobs and profits the top 5 have, by and large, moved their businesses forward. New fuel types are coming to market and consumers are migrating to new trends in the usual slow and unpredictable fashion.
The fire sales are over, for now. Admittedly the “race to the bottom” on price never truly materialised, especially for Australian consumers. With new fuel types and more progressive approaches to fuel efficiency it seems that savings will be made. Fleet Managers should expect dealers to push fuel costs in sales meetings. Keen Fleet Managers should keep an extra eye on special offers on the new generation of fuel saving vehicles.
The auto industry needed a shake-up. Back in 2008 the level of investment in engine technology and competition was not where it should have been. Additionally the industry was caught completely flat footed in the face of increasing oil prices. Today everyone is getting used to the idea of $100 per barrel. In the austerity hit countries of the developed world that only means one thing - smaller cars.