In case you're wondering why all of a sudden so many car ads on TV are talking about fuel economy, here's why. Toyota and Honda both had an excellent month for selling cars in May, selling 16-17 percent more vehicles than last May. The Big Three American automakers all sold fewer vehicles. GM was down 12 percent, Chrysler was down 11 and Ford was down 2. The Washington Post article on the change in numbers says that – hey – small, fuel-efficient cars offered by the Japanese firms are what's moving the market. Ford will lower production about 2.5 percent in the third quarter.
Here are two sets of numbers that really jumped out at me from this article. First, that each percentage point of market share, "is roughly equivalent to the annual production of a typical U.S. auto plant, or 170,000 vehicles." So, when the Detroit companies lose 4.7 points, that sort of implies that five American auto plants are in possible future jeopardy. Of course, Toyota and Honda make cars in America as well.

The other shocking bit of information is this paragraph, which is the last in the story. I'm copying it here because I don't want to mix up any numbers:

"Detroit still trails Japanese automakers in profit per vehicle, according to the report. Nissan, Toyota and Honda each earned a pretax margin of more than $1,200 on every vehicle sold in North America. Chrysler earned $223, while Ford lost $590 and GM lost $2,496 on each vehicle sold in 2005. The figures reflect differences in health-care and pension costs, and expenses associated with cash rebates and financing incentives."

Does that mean that the fewer cars GM sells, the better the company is doing?

[Source: Washington Post]

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