Are big three automakers overestimating future demand?
I've been watching the congressional hearings and listening to the Detroit CEOs project demand for their cars, not just next year, but years beyond. As I understand it, sales are expected to flatten a bit in the short term, drop by a few million at some point, and then reach and maintain or even exceed last year's sales.
Really? One of them intends to continue manufacturing 40 of their 48 models. Are people going to just go back to buying the same big cars but with minimal improvement in fuel efficiency?
I don't think so. I think the day of the mega-auto-manufacturers are over. Too many better alternatives up and coming. The auto industry, often defined as "the big three", will be more like "the small to medium independent 10". Internationally. (See emerging companies like India's Tata motors, or MDI in France.)
Whether they get the big bailout or not, this whole thing is being positioned as either they're infused with over 35 billion, up to a potential 120 billion, or they go under.
The situation might be more inevitable and irreparable than they would lead you to believe.
