The overall size of the North American market for cars and light trucks is a critical number in determining the capital, or shall we say the bailout requirements of the Detroit automakers.
For years, the average market size has been about 16 million vehicles with an average price of about $26,000. In the better years, the number has crept close to 17 million.
The number for 2008 will come in at about 13 million, and projections for 2009 (by the automakers themselves and by industry analysts) are coming in the range of 10 to 11.5 million.
That's some very major contraction in demand for this industry. And it's going to change a lot of things.
And of course keep in mind that demand reduction affects all of the dozen of so automakers who sell in North America, not just the Detroit Three.
Unit-volume reduction of more than one third, in one year. That's the kind of transition in a market that really separates the survivors from the losers.
From various statements, it seems that Detroit's executives are wrestling with the question of whether the demand destruction is permanent, or just a cyclical feature of the current recession. In any event, they've been losing so much money over the last few years (which were halfway-decent years for the economy, and decidedly good years for the competition), that they don't have the financial cushion needed to get through this weak spell.
For a century, Detroit has navigated boom and bust cycles, usually on a fixed schedule of about seven years. This time they came up empty.
For years, the average market size has been about 16 million vehicles with an average price of about $26,000. In the better years, the number has crept close to 17 million.
The number for 2008 will come in at about 13 million, and projections for 2009 (by the automakers themselves and by industry analysts) are coming in the range of 10 to 11.5 million.
That's some very major contraction in demand for this industry. And it's going to change a lot of things.
And of course keep in mind that demand reduction affects all of the dozen of so automakers who sell in North America, not just the Detroit Three.
Unit-volume reduction of more than one third, in one year. That's the kind of transition in a market that really separates the survivors from the losers.
From various statements, it seems that Detroit's executives are wrestling with the question of whether the demand destruction is permanent, or just a cyclical feature of the current recession. In any event, they've been losing so much money over the last few years (which were halfway-decent years for the economy, and decidedly good years for the competition), that they don't have the financial cushion needed to get through this weak spell.
For a century, Detroit has navigated boom and bust cycles, usually on a fixed schedule of about seven years. This time they came up empty.
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