General Motors and others in the U.S. auto industry are saying, "Wait until the year after next!"
U.S. auto sales in 2009 are expected to be roughly flat with dismal 2008 sales. Some 2009 forecasts are slightly below this year, and some are slightly above. Assuming they can survive until then, the Detroit 3 hope for a modest rebound in U.S. sales in 2010.
By that time, they also hope to be more profitable, with revamped lineups that will feature fewer big trucks and more fuel-efficient cars and crossovers. The bad news is, they also expect themselves to be somewhat smaller, building and selling fewer vehicles.
Walter Borst, GM treasurer, said GM expects its North American Operations to have plant capacity to build 3.7 million vehicles in 2010, down from 4.2 million in 2007. Selling fewer vehicles doesn't sound like a formula for success, but at the same time, GM will change its product lineup to reflect what's in demand, in the new era of high gas prices.
Borst said 11 of GM's 13 last launches were cars or crossovers (as opposed to trucks), and 18 of the next 19. In 2010, cars and crossovers will make up more than 60 percent of the North American product lineup, up from 50 percent last year, Borst said.
GM expects global industry sales for all brands to top 75 million in 2010, up from 70.6 million in 2007. Within those totals, emerging markets â€" including mainland China, where GM has a large and growing presence -- will make up more than 35 million units in 2010, up from 27.1 million last year.
That means GM's sales outside the United States will make up more than 65 percent of GM's worldwide sales, up from about 59 percent last year. That's partly because of greater sales outside the United States, but also in part because of lower sales in the U.S. market.
Borst said GM's new global structure will be better off in the long run. "We're not only looking to survive, we are restructuring the business for sustainable profit and growth," Borst said, in a Sept. 24 presentation the Deutsche Bank 2008 Leveraged Finance Conference.