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2009: Naughty Or Nice For Auto Industry?

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2009: Naughty Or Nice For Auto Industry?

Business

2009: Naughty Or Nice For Auto Industry?

2009: Naughty Or Nice For Auto Industry?

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It's been quite a year for auto makers — two of the Big Three went into bankruptcy, some well-known brands like Pontiac and Saturn were discontinued. Meanwhile other automakers have emerged stronger than before. Renee Montagne talks to Michelle Krebs of Edmunds.com for a look back at the year in automotive news.

RENEE MONTAGNE, host:

It's been quite a year for automakers, two of the big three went into bankruptcy, some well-known brands like Pontiac and Saturn disappeared. We called auto analyst Michelle Krebs at Edmunds.com to talk about the year in cars. Good morning, Michelle.

Ms. MICHELLE KREBS (Analyst, Edmunds.Com): Good morning, Renee.

MONTAGNE: Why don't we start with your general take on 2009.

Ms. KREBS: In my almost 30-year career in the auto industry, it has been the most tumultuous, momentous year that I have ever seen. We have seen sales plummet to levels we haven't seen in three decades. We saw General Motors and Chrysler, two major automakers, almost go out of business by over-bankruptcy and then quickly emerge, which was quite miraculous. And I think, long term, the landscape has forever changed.

MONTAGNE: Well, most major car makers struggled this year - that we all know -but who did come out, relatively speaking, ahead?

Ms. KREBS: Well, the biggest winner this year percentage-wise was Subaru. They marched through the year as if there wasn't even a recession. They're having record sales of some of their models. They were a good alternative to SUVs. They're cars, but they have all-wheel-drive, and they get good mileage. Ford was another beneficiary for the first time since the mid-1990s. Their market share is rising. In addition to the strength of some really good products like the Ford Fusion and Ford Focus, we hear a lot that buyers are saying we went with Ford because they didn't take government money.

The other huge beneficiary in all of this has been the Koreans, Hyundai and Kia. They have been very aggressive marketing and they gained a lot of sales and market share. They've been going back and forth all year with Nissan as the number six seller in the U.S. market.

MONTAGNE: Overall, Michelle, which carmaker actually sold the most cars in 2009?

Ms. KREBS: Well, General Motors still is the biggest carmaker in the country. Toyota's right behind and Ford is behind that. So the order hasn't really changed. Despite the turmoil in the industry, the same companies are the sales leaders. Many of the same products are the sales leaders that have been the leaders last year and even a decade ago.

MONTAGNE: You know, there has been so much hype about hybrids and environmentally friendly cars. Can we say at this point in time that green cars have gone mainstream?

Ms. KREBS: Maybe in the thinking of people but, frankly, the sales still have not been that strong. They're still only a tiny percentage of the market and the consumer looks at the payback of it. It still takes - especially the gas price is relatively low. The payback on the premium that you pay on hybrid vehicles takes a long time, sometimes a decade to pay off.

MONTAGNE: Let's go back to Chrysler just for a moment. It just reported this week that it will not pay back nearly $4 billion in federal bailout money. That's a big loss for taxpayers, and that money is gone. Is Chrysler, in your opinion, going to survive in the coming year?

Ms. KREBS: I think Chrysler's chances are very iffy. Chrysler's big problem is, it's got to get through the next 12 or 18 months before it gets any new products. So basically they're selling what they've been selling, and they haven't been selling a lot of it. So Fiat, its partner, will be supplying Chrysler with some new products, but that's still a long way away.

MONTAGNE: And what about GM? What do you see as its prospects for 2010?

Ms. KREBS: Well, I think they've got some significant challenges ahead. They're a little bit behind on some critical products, but I think they'll survive it. They are doing amazingly well overseas. In China, Buick sells more vehicles in China than it does in the U.S. And, in fact, last month I think GM sold more cars in China overall than they did in the United States, but they're up against some tough competition now.

MONTAGNE: Michelle Krebs is a senior industry analyst with the auto information Web site Edmunds.com. Thanks very much.

Ms. KREBS: Thank you.

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