"Wanna Be" Brands Hurt The Most By Downturn, But Who Is Going To Suffer The Most?

The U.S. automobile industry had quite a party during this decade's credit-infused economic boom, but the hangover could last for years to come.

The party was made possible by easy access to cheap credit and skyrocketing housing prices that allowed Americans to use homes like cash machines and buy new cars that, ultimately like their homes in many cases, they could not really afford.

But the financial crisis -- particularly in the wake of the game-changing collapse of Lehman Brothers Holdings Inc. last September -- and the U.S. recession have pushed U.S. auto sales to their lowest in decades, forcing automakers Chrysler LLC and General Motors into bankruptcy.

The world into which a restructured Chrysler and GM emerge will likely see a smaller auto market in the United States, even after an economic recovery, largely because easy credit is a thing of the past.

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0to60 - 6/8/2009 4:32:37 PM

+3 Boost

Not subcribed to this forum. But it appeared it had nothing to do with your title. And what are the wannabe brands? Hyuandai?

MrBratwurst - 6/8/2009 5:13:13 PM

+5 Boost

— 0to60:

| And what are the wannabe brands? Hyuandai?

Yes, dude. Hyundai are very wannabe. Their global marketshare rose from 4.0 to 4.7% during the crysis and their profits fell ONLY 43%.

Only one brand managed to beat Hyundai, Audi namely, with profits -30% down.

Volkswagen profits are -70%
BMW profits were -90% earlier, now they have loss
Mercedes loss is more than 1 billion USD
Toyota suffers massive losses
GM is bankrupt

Source for Hyundai data:
http://uk.reuters.com/article/motoringAutoNews/idUK74161+23-Apr-2009+RTRS20090423

0to60 - 6/8/2009 6:33:40 PM

+2 Boost

meaning they want to be a luxury brand. Has nothing to do with profits

Agent009 - 6/8/2009 4:50:43 PM

+2 Boost

Any brand that relied on people to reach beyond "their" real means to purchase a vehicle.

The stereotype can be easily seen by a person making $30K buying a $70K car simply becuase of easy credit. Yes you can buy whatever you want but if you reach out there you need to be responsible and stable enough to afford it through the term of the loan.

0to60 - 6/8/2009 6:38:10 PM

0 Boost

by that definition, MB and BMW. Plenty ppl going out buying high mileage used ones and cheap leases just for the name.

One of the least wanna be brands would actually be Lexus considering the majority of their buyers buy and not lease.

FanboyOfTheTruth - 6/8/2009 5:23:45 PM

+9 Boost

In other non-news, a "wanna be" automotive journalist posted another "wanna be" automotive news today on the "wanna be" automotive website with the usual "wanna be" irrelevant flame-baiting headline designed to contribute to nothing other than generating site traffic from "wanna be" car enthusiasts like himself.

sector - 6/8/2009 6:35:22 PM

+4 Boost

BMW = Broke Middleclass Wankers

bimmer patrons are usually the 40k millionaires :)

upwards - 6/9/2009 2:53:31 AM

+2 Boost

Only if North Korea dose not attack.

XYZZ - 6/10/2009 2:44:35 AM

+1 Boost

just WHICH small car engine is hyudai supplying MB with?

from what i understand, MB sources the Smart engine from MITSUBISHI. who incidentally, also provided the original drivetrains and other hardware from which hyundai learned how to make cars.

upwards - 6/9/2009 2:54:52 AM

+1 Boost

You trust info from blogs?

222max - 6/9/2009 10:09:23 AM

+4 Boost

This site is absolutely pathetic when there's no real new to be had. This article being just another example of lameness.

GermanNut - 6/10/2009 10:35:55 AM

0 Boost

BMW has been hurt the most by the downturn and will continue to get hurt the most by the downturn for three reasons:

1) BMW offered huge incentives so its broke customers could afford the 3-series and therefore BMW's profitability turned negative

2) BMW depends on its 3-series to achieve its high volume. Unfortunately, the 3-series is not a very profitable car for BMW to sell and so their profitability is also hurt for this reason.

3) BMW is focused on the U.S. auto market which is seeing its sales fall off a cliff. We all know China is now the world's largest auto market and BMW's lack of sales in China will continue to absolutely devastate its sales.

It's obvious the answer is BMW. BMW's profit and sales fell the most out of the big 3 German manufacturers for 2008. Through May of 2009, BMW's global sales have also fallen the most out of the German 3.

Fortunately, Audi will be in the best shape because they don't sell their cars at huge discounts, they don't rely on a cheap car to sell volume, they are the only company that has stayed profitable through the first quarter of 2009 and, perhaps most importantly, they are easily the market leader in China - now the world's largest car market by sales.

GermanNut - 6/11/2009 3:44:28 PM

+1 Boost

Whatthe, you sound like amazinBimmer, OH SORRY! You are going to be banned! AGAIN!

GermanNut - 6/11/2009 3:49:37 PM

+1 Boost

I can't wait to see BMW's sales continue to fall off the cliff.

I guess selling cars to "Wanna Be" rich people wasn't so great a strategy after all.

BMW announces June global sales down 15%.....this is becoming a recurring trend.

If BMW is the market leader in sales it means that it should be having the smallest sales percentage decline. 50,000 fewer cars sold would be a smaller decline for BMW when compared to Audi selling 50,000 fewer cars.

Oops! BMW's sales are falling at double the rate of Audi's. Last year BMW outsold Audi by 200,000 cars. Through May of 2009, Audi has sold 374,750 cars and BMW has sold 403,000. A difference of only roughly 30,000 cars.

I think we see where this is headed.....