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A severe crisis beginning during the second half of 2008 has forced the world's auto industry into a total shakeup, as new players and others compete in a landscape under new rules.
The logo of General Motors Corp. (GM) is seen in front of the GM headquarters in Detroit, the United States, April 15, 2009. The largest U.S. automaker, General Motors Corp., officially filed for bankruptcy protection at 8 a.m. EDT (1200 GMT) on Monday, the largest bankruptcy protection case in the U.S. industrial history.
SWEEPING CRISIS
2008 has been a difficult year for automakers around the world. An unprecedented oil price rally forced Americans, who drive most in the world, to drive less. And when oil prices took a free fall as the economy hit a downward trend, so did the demand for vehicles.
With the financial crisis sweeping the world, the auto industry was caught in the credit crunch -- consumers could not get loans to buy cars while the companies faced a shortage of liquidity to keep operating. And as reports of large layoffs were publicized almost on a daily basis, cash-trapped consumers were reluctant to make large purchases like buying a car.
Car sales dropped to the lowest levels in nearly three decades. Toyota, which replaced General Motors Corp. as the world's top automaker, reported an operating loss for the fiscal year ending March, first time in 70 years. Its sales fell 27 percent in the first quarter 2009.
Car companies from Asia, Europe, North America and elsewhere have been forced to implement creative marketing strategies to entice consumers to purchase vehicles, when many firms are experiencing double digit percentage sales declines. Major manufacturers, including the Big Three -- GM, Ford, and Chrysler -- and Toyota, are offering substantial discounts. Hyundai is even offering to allow customers to return their new cars if they lose their jobs. |
