Cut prices. That’s it. It’s a very simply solution, actually. Cut the prices of your vehicles so they are affordable during the current economic recession and tightening credit atmosphere and you’ll sell more product. Selling more product equals more income. More income equals a greater chance that your companies will see net revenues instead of deficits.
Is this stuff really that hard? Couldn’t any high school student educated in basic economics come up with a solution to the “problem” that the major automakers are facing? Hey, we can even get more in-depth about a solution and tell the automakers to cut expenses – a novel idea! Or how about this one? The automakers should be making more products that the consumers want to buy. Eureka! We’ve figured it out!!!
Seriously, it is a disgrace that the big three automakers are facing the problems that they are today. These companies deserve what they’re getting – they didn’t produce fuel efficient cars in mass quantities when the consumers demanded them as far back as ten years ago and are currently doing nothing to sell the excess quantities of their product. There are a lot of people out there (like me) who would LOVE to buy a new car. In fact, you could say that someone like me is constantly in the market to buy a new car.
But most of the people in my situation are realists. We know that we can buy a good used car that is only one or two years old for 60% – 75% of the price of the same model if it was brand new. Why would anyone pay the premium to purchase the new car in this economy? With all of the executives driving the buses at these companies (pardon the pun) can it be that none of them realize that they need to cut prices in order to stimulate sales? I’m a big fan of Chevrolet (and I have no idea why since I’ve paid more to have my Blazer fixed than the thing could ever be worth). I’d love to buy a 2009 Chevy Impala. Yahoo! Autos suggests that the model I would like to buy starts at $28,000 and that the 5-year cost to own this car is $52,000.
Why would I ever buy that car in today’s grim economy? Is there no one at Chevrolet who is looking at this and saying, “Hmmm… We need to fix this problem.” Better yet – do the people at Chevrolet even see this as a problem? Here’s why they should.
I can go to Enterprise Rent-a-Car and get a certified pre-owned (used) 2008 Chevy Impala for $15,000. Read that again. I can get a one-year old Impala for about HALF of what a new one costs.
How can you fix the problem that today’s automakers are facing? Simple. Cut prices and move product. If this doesn’t happen, then you and I better get ready to pay a little bit more in taxes because you know another government bailout won’t be too far behind.
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