No one wants to buy American cars?
Why does this always come up? If no one wants to buy American cars, then why are parking lots packed full of American cars in...... America!!!
Yes, they were stupid not planning ahead, but they have been making a killing the past 10 years selling $40k trucks and SUVs. That is why they were not producing small economy cars. Gas was $1.25-1.50-1.75 per gallon. 90% of their market was buying $40k full size trucks and SUVs for the past 10+ years. The other 10 percent was buying Malibus and Impalas. I've been making parts for GM cars for the past 13 years, I know which ones they were selling.
The only reason the Cavalier POS sold was because in comparison to a $40,000 pickup truck, it sold for about $8000. Some people bought the POS.
Honda and Toyota have GM stomped to the ground on economy and small cars. GM chose to go with a market that Honda and Toyota couldn't compete with, boat hauling, horse trailer hauling, construction supply hauling big trucks. Why do people over here want big trucks? Because one buddy of mine has a 4000 pound trailer he hauls stuff on. Another buddy of mine has an 8000 pound camper he hauls around every weekend. Yet another one hauls around a 6000 pound boat, and another, 10,000 pound horse trailer. People want a truck to haul stuff around where I live. They need the torque, yet drivability, of a V8 to pull this stuff. As the prices of trucks rose, they drove the trucks on their daily commutes because who can afford insurance and payments on 3 vehicles (work commuter, wife's commuter, and weekend hauler).
Europeans and the British don't seem to want big trucks. Think the Big 3 cares about Europe and the UK? They sold and sold and sold and sold right here on their own soil, plenty to keep their pockets lined. Why would they care what those across the pond want when they were making it big right here?
Sure, it bit them in the ass now. $4 a gallon for fuel? That's only double what it was during the long stretch of truck sales. Who would have thought that people would freeze up with a doubling of gas prices? When I started driving, I think I paid $0.69 for gas at 16 years of age. By the time I got to college, I was paying $1.39 for gas, hmm, double in just a few short years. No one bitched then. The price of gas rose steadily, as did the price of cars, and the paychecks followed right along. Along came 2001-2003, and suddenly, paychecks quit rising. Not paychecks of the snobby $100k people, the paychecks of the working class. The ones buying these trucks for $40k and hauling their weekend hauling after commuting all week.
I don't think the rising costs of fuel is the cause of anything. It is the stagnation of the paycheck that is the cause of it all. No increase in the paycheck, no more cars being purchased. The rising fuel costs of the past years could have easily been absorbed. Problem was, the paychecks nearly have leveled off the past 7 years. What little increasing of income there has been, have all been wiped out with the cost of health insurance. When paychecks increase by $15 per pay from raises and the health insurance premiums raise by $30 per pay, it's not difficult to figure out what the problem is. It's right there, cost not associated with oil and crap raises for the past 7 years or so for the 50% of the US population that is at the median average of $32,000 per year.