Cars and Drivers

Detroit Loses More Ground (GM)(DCX)(F)

The average price of a new car from the Big Three dropped, again. Reuters quotes that Labor Department as reporting that new vehicle prices dropped .7% in November, the largest drop in over a year. Incentives for cars from GM, Ford, and Chrysler are now routinely in the $3,000 to $4,000 range.

One research group, CSM Worldwide, says that US auto sales will end up hitting a nine year trough in 2007.

All of that being said, the trouble, especially for Chrysler and Ford, is probably going to get worse. Chrysler has about 100,000 vehicles on lots that have not been ordered from dealers. Ford’s market share is estimated to be about 18% next year. With such a small piece of the North American market, it is not clear that Ford can cut enough costs to stay financially viable.

Smaller share of a smaller market. No good news here.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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