Ford (F), GM (GM), and Chrysler have continued to maintain the hope that car sales will turn in the second half of the year. Since they have been falling by double digits each month, it is better to dream than to give in to despair.
Nissan may have expressed a more realistic view when its said its earnings in the last quarter were weak and that their fiscal 2008/2009 would be down because of high commodities costs and a battered US market.
Nissan’s US sales rely more on light trucks while its competitors Honda (HMC) and Toyota (TM) tend to market smaller sedans. That makes Nissan’s product line almost identical to Ford and GM. Sales of SUVs and pick-ups have fallen apart, and gas prices will not make a recovery in those segments possible.
Light trucks are the most profitable product lines for the big US car companies. With the market for those falling an earnings recovery for the Big Three in their home market is not possible.
Nissan is showing Detroit the way and it is down a bleak road at best.
Douglas A. McIntyre
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