You are currently browsing posts tagged “fuel efficient auto”

Japanese car makers thrive while U.S manufacturers flounder

February 11, 2009 // Posted in Automotive News, Car Talk (Tags: , , , , ) |  No Comments

Not all car makers are on the brink of financial ruin. While no auto maker can evade the effects of a slowing global economy, Japan’s biggest car makers are thriving and investing in their futures.

All car makers across the world are minimizing budgets and decreasing production to compensate for the decreasing consumer demand and tight credit availability. However, Honda, Toyota and Nissan had enough foresight to adapt to changing demands.

And they did so several years ago.

Although General Motors, Ford and Chrysler were among the top players in a U.S. government initiative to develop hybrid and alternative fuel vehicles in the 1990s, it was Japanese automakers Honda and Toyota who released the first hybrids, the Insight and Prius (respectively) in 1999.

Popularity soared for these two vehicles, and since then U.S. car manufacturers have licensed hybrid car technology from Japanese manufacturers.

Ford, General Motors and Chrysler (the Big Three), sat on their immediate money making models—gas-guzzling SUVs, pickups and V8s—since smaller hybrids and consumer economically friendly vehicles aren’t as immediately profitable.

In addition, just five years ago GM borrowed $50 million from Canada to set up a production facility and bring back the V8 Camaro. Analysts say they couldn’t (or wouldn’t) see the writing on the wall that their days of fuel-hungry vehicles were numbered.

That’s not to say Toyota, Honda and Nissan are immune from the U.S. financial weakness. Toyota Motor Corp. (TM) sales are expected to drop 24%, with Honda Motor C. (HMC) sales down 21% and Nissan Motor Co. (NSANY) sliding 20% in November, Edmunds reported. They’re also planning cuts in capacity to compensate by closing a factory in the U.K. and lower production output in Japan and Europe.

But they are better cushioned to face the storm than their American competitors. They, for one, aren’t stepping off their private jets in Washington D.C. with their empty porridge bowls in hand pleading, “Please sir, may I have some more?”