2008–2010 automotive industry crisis
[3] The popularity and relatively high profit margins of these vehicles had encouraged the American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus.
Car companies from Asia, Europe, North America, and elsewhere have implemented creative marketing strategies to entice reluctant consumers as most experienced double-digit percentage declines in sales.
[8] (See also Automobile industry in China) Citing falling production numbers, the State Bank of India reduced interest rates on automotive loans in February 2009.
Billed as "the people's car", the manufacturer hopes the low cost will encourage customers to purchase the vehicle despite the ongoing credit crisis.
For Toyota, these were attributed mainly to slow sales of its Tundra pickup, as well as shortages of its fuel-efficient vehicles such as the Prius, Corolla and Yaris.
In response, the company has announced plans to idle its truck plants, while shifting production at other facilities to manufacture in-demand vehicles.
[15] On 5 December 2008 Honda Motor Company announced that it would be exiting Formula One race with immediate effect due to the 2008 economic crisis and are looking to sell the team.
[19] On 16 December 2008, Fuji Heavy Industries, Japan's largest transport equipment manufacturer and the maker of Subaru brand cars, announced that it would exiting World Rally Championship at the end of the 2008 championship, "this sudden decision was in response to the widespread economic downturn that is affecting the entire automotive industry", and came one day after competitor Suzuki exited the sport.
The Japanese maker of Outlander sport-utility vehicles, will scrap the night shifts at two domestic factories as the deepening global recession saps auto demand.
The cuts are part of Mitsubishi's move to reduce planned output by 110,000 vehicles in the year ending March because of tumbling sales in Japan, the U.S. and Europe.
The Japanese automaker, often held up with Honda as a success story for the rest of the auto industry to follow, said it expected a slim profit margin of US$555 million for the year ending in March 2009.
Toyota President Katsuaki Watanabe said the impact on the company from the struggling global economy has been "faster, wider and deeper than expected."
South Korean automakers have been generally much more profitable than their US and Japanese counterparts, recording strong growth even in depressed markets such as the United States.
[24] Despite a global economic slowdown, Hyundai-Kia successfully managed to overtake Honda Motor in 2008 as the world's 5th largest automaker, climbing eight rankings in less than a decade.
[25] Hyundai-Kia continued its rapid success in 2009, when only a year after overtaking Honda, it surpassed Ford Motor as the world's 4th largest automaker.
[29] Nonetheless, South Korean automakers were not completely immune to this automotive crisis and in December 2008 Hyundai Motor Company had begun reducing production at plants in the U.S., China, Slovakia, India and Turkey because of sluggish demand.
The company missed an earlier projection of 4.8 million units for 2008 and announced a freeze of wages for administrative workers and shortened factory operations as demand weakened amid the 2007–2008 financial crisis.
In December 2008, SAIC gave an ultimatum to the SsangYong union to accept its restructuring plan or face the parent company's withdrawal, which, if implemented, would mean certain bankruptcy.
However, the South Korean Ministry of Knowledge Economy said that there will be no liquidity provision at the government level for five automakers - Hyundai, Kia, GM Daewoo, Samsung Renault and Ssangyong.
[34] On November 20, 2008, French automobile manufacturer PSA Peugeot Citroen predicted sales volumes would fall by at least 10% in 2009, following a 17% drop in the current quarter.
On November 24, 2008, French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed to support the crisis-stricken automobile industry in France and Germany.
[citation needed] The most efficient anti-crisis measure executed by the Russian government was the introduction of a car scrappage scheme in March 2010.
[48][49] Spanish automobile manufacturer SEAT (a subsidiary of the Volkswagen Group) cut production at its Martorell plant by 5% on 7 October 2008, due to a fall in general sales.
[56] In the United Kingdom, Jaguar Land Rover, now owned by Tata Motors, was seeking a $1.5 billion loan from the government to cope with the credit crisis.
[58][59] On 22 December 2008, Tata declared that it would inject "tens of millions" of pounds into the company it had acquired from Ford Motor Corporation in early 2008.
British Prime Minister Gordon Brown also stated the intention to help out car industry in U.K.[60] On 8 January 2009, Nissan UK announced it was to shed 1200 jobs from its Washington, Tyne and Wear factory in North East England.
Production at LDV's factory in Birmingham, West Midlands (where it employed 850 staff) has been suspended since December 2008 due to falling demand.
[74][75][76] In order to improve profits, the Detroit automakers made agreements with unions to reduce wages while making pension and health care commitments.
[77] With most of these plans chronically underfunded in the late 1990s, the companies have tried to provide retirement packages to older workers, and made agreements with the UAW to transfer pension obligations to an independent trust.
[99][100] The Big Three received funding for a $25 billion government loan during October 2008 to help them re-tool their factories to meet new fuel-efficiency standards of at least 35 mpg‑US (6.7 L/100 km; 42 mpg‑imp) by 2020.
