cars

General Motors and Ford have been watching their sales plummet over the years. The auto mobile industries as a whole have been declining but GM and Ford have been watching their sales fall more then the rest of the industry. Korean and Japanese car sales have increased, taking away the sales of GM and Ford.

Ford’s first solution was to sell less but make more on each sale. Ford’s share and sales fell too much for this solution to work. The second solution seems to be working because with the gas prices rising they are trying to push the sales of the smaller cars (the new Fusion) then promoting the SUVs. While in the past Ford was pushing the sales of the SUVs and the bigger cars.

GM had a different approach on their situation. After 9/11 GM tried to sell all their cars and trucks as they could because they knew 9/11 would affect their sales and the economy. GM lost $10 dollars that year making them try another solution. This time GM is trying to let their sales fall at a more “natural”/controlled level.

Even though both car companies numbers are falling but they are still above Chrysler. Which means they are not doomed yet but more as a warning. GM and Ford both have to find a way to operate at their new low level because that is the first step, not to loss anymore money. This effects on the labor and the capital because they are both are going to be reduced because of the lower volume. If GM and Ford do not do this then they might have to shut down because they will keep on losing sales and not make enough revenue to stay open. As I said before they are along way off from being shut down but they are on their way if they do not do something about it.