When the US authorities were busy setting the new Corporate Average Fuel Economy levels last year, the political lobby in the US auto industry was running around trying to stop the legislators forcing better fuel economy on the present-technology passenger vehicles, so that more industry research money could be spent on the green future-technology runabouts.

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Bob Lutz, the veteran product guy at GM was among them. What we really need, he told anyone who would listen, is a draconian fuel tax that ensures everyone gets out of heavy pick-ups and trucks and gets into small cars. He reckoned that five or six times the present level of tax would do the trick and bring the US into line with Europe.


No response.


So off they all go back to R&D and start fettling the old junk iron so that on a good day with a bit of trick-driving, a downhill run and a following wind, it could maybe squeeze ten to the gallon. Than W-H-A-C-K.  Here comes the price rise on oil from those nice friendly oil miners in Saudi.
 
Helpful.


It’s hurting here in the UK where the oil price is a small part of the price of a gallon because tax is so high. It hurts like hell in the US where the pump price is so low, because the percentage change is so big.

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What happens? Today’s news tells us what happens: light truck sales in the US in May down 24% which means GM, Ford and Chrysler, who never did manage to break the habit of making them, lost 23% of sales year-on-year between them.


The Ford F150 pick-up – to European eyes a ludicrous choice for personal transport but America’s top-selling “car” – has at last lost its crown.


Asian brands were up 4%. European brands managed to hold steady but with big swings within the models. Mini gained 53%. Porsche 911 lost 40%. If you are going to put up with a little car it might as well do some miles to the gallon, seems to be the American thinking.


In January two years ago, the US car market (light vehicles) was running at 17.6m. Now it’s at 14.3m. That’s a 19% change and not helpful to the Big Three who are still in recovery.


We all saw it coming. When oil is running short and its combustion by-products are considered damaging, we are in a one-way street. Cerberus, the venture-cap that bought Chrysler from Daimler wishes it hadn’t, and there is another pass the parcel job to be done there pretty quickly.


Ford acted fast. This week it canned F-150 production in Mexico and announced that Mexico would now build Fiestas. As just-auto said after seeing the Verve (Fiesta) show car at Detroit in the winter, it is inevitable that Ford and GM start exporting cars from the US to Europe, and the $/€ exchange rate, and the car-carrier ships returning empty from America’s Eastern Seaboard to Hamburg have that message written all over them.


Ford is however already “off course” on its profit recovery plan. This is just one seismic shift too many in too short a time. And GM has now adopted the Ford idea of reconsidering the value of the distraction brands. 


Hummer has become GM’s Jaguar/Land Rover/ Aston Martin/Volvo and is up for “strategic review”. Too right guys. It was an obscenity when you bought it and it’s still an obscenity now.


The US industry could become the New World of car production. It has the volume, the idle capacity, a huge home market, the research resource, the imperative to change, the captive overseas markets, the market share leads in emerging Russia and China, and the favourable exchange rates.


All it needs is focus, and the purchase of a few floors in the car ferries, and the job’s a good ‘un.


Ladies and gentlemen of the United States: be careful that you wish for it.


Rob Golding


See also: US SALES ANALYSIS: May carnage, yes, but truck models still top sellers