The State of the US Auto Industry in 2010

An article by Punit    No Comments

One of the darkest times for the auto industry was 2008 and 2009. During this time, three companies that used to dominate the auto industry suffered huge losses. GM and Ford needed to file for bankruptcy protection as a result, allowing the government of the United States to take control of the companies thanks to multi-billion dollar bailouts. How are they doing now? Is the auto industry recovering?

2009 was the worst year for Auto Industry

In 2009, the auto industry of the world had a very tough year. There were huge bankruptcies, bailouts and big plummets in sales. Thousands of dealerships have shut their doors and customers stopped purchasing as many cars, hurting the entire industry.

It has not all been bad for the companies. The Cash for Clunkers helped to entice people to buy some new cars that were more fuel efficient. How did companies do around the world? Here is a quick rundown of the state of some of the largest car companies in the world.

• Chrysler: In 2009, Chrysler filed for bankruptcy, with Fiat taking control of the company as a result. Fiat continues to increase its ownership, while the United States owns eight percent, the UAW owns 55 percent and the Canadian government owns two percent.
• Ford: It has been very tough for Ford with huge losses across the company. However, thanks to its EcoBoost engines, the company is beginning to get into the hybrid market. Ford is seen as the most stable of the auto companies in the United States.
• GM: After getting a $50 billion bailout from the government, which allowed the government to become a 60 percent stakeholder in the company, GM began to dump various parts of the company. The Pontiac line was shut down, as was the Saturn, Saab and Hummer lines. GM is still trying to recover from some very tough years.
• Honda: Honda continues to grow and has weathered through the difficult years quite well to become the fourth largest auto company in the world.

Is the worst over now for Automotive companies?

This was just a quick rundown on how some auto companies are fairing. One thing that should be pointed out is that Toyota is the largest auto company in the world but they have had some very bad press thanks to product recalls. This will hurt the company and the auto industry, but overall the auto industry is recovering after some tough years thanks to generous sales terms and the push by many companies to release hybrids and fuel-efficient vehicles.

The auto industry had probably the worst year it has ever had in 2009 when it began to lose a lot of money due to changing customer habits and the financial crisis. That has not stopped companies like Honda from at least improving its sales during tough times. Ford, GM and Chrysler are still recovering but at least they are doing better than they were in 2009.

Further Reading:

Can GM Revive Auto Industry Dominance

Chrysler: billions flushed into the toilet?