The worst recession in half a century will be prolonged as consumers see their jobs go away and their home prices head south, economists Nouriel Roubini and Robert Shiller warn on Bloomberg. The University of Michigan index of consumer sentiment fell by more than forecast to 64.6 from 70.8 in the prior month. And it may be time for some foreign automakers to evacuate crumbling Cartago, their countrymen caution.
Suzuki reported a precipitous 78 percent drop in US unit sales in June. Their first-half decline was 60 percent, the market’s worst. Mitsubishi is down 51 percent this year. Faltering since 2003, Mitsubishi doesn’t have far to fall. Mitsubishi “doesn’t make cars that are hot-sellers in the U.S.,” said CSM Worldwide analyst Masatoshi Nishimoto with polite Nipponese understatement. Sayonara?
Both carmakers “should withdraw from the U.S.,” said Yuuki Sakurai, chief executive of Tokyo-based Fukoku Capital Management, who was quoted by Bloomberg. “It’s time for them to decide whether they pay a high price to continue business there or stop the bleeding.”
“Both are struggling with getting customers to initially even consider them,” said Alexander Edwards, head of auto research for San Diego-based Strategic Vision Inc.
Compared with Toyota and Honda, Suzuki and Mitsubishi are market midgets. Suzuki is profitable everywhere else, except in America. Mitsubishi booked half of its worldwide loss in the land of the free.
Miraculously, Mitsubishi makes defiant noises.
“We will never give up the U.S. market,” Mitsubishi Motors President Osamu Masuko said in Tokyo. “The U.S. will return to being the world’s biggest market.”
Suzuki is more cautious. They have put their Camry-killer on the backburner. “Because of the current market situation, we’re reviewing the plan as to where and when to sell,” a spokesman said. Suzuki is strong in growth markets like India, where it owns more than 50 percent of the booming market.
Suzuki’s specialty is smaller vehicles, said Yasuaki Iwamoto, an auto analyst at Okasan Securities Co. in Tokyo. “It makes more sense for Suzuki to put its limited resources into small cars,” said Iwamoto. “Forget about America.”
It would be a lucky escape. Honda sells 20 times more cars than the midgets. Toyota 30 times. The more you’ve got, the more you can lose. Toyota’s and Honda’s record losses are to a large degree Made in America.
Bloomberg »
Source: www.thetruthaboutcars.com
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