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Friday, 4 January, 2002, 00:55 GMT
US drivers keep on truckin'
Oldsmobile Brava
A real, American workhorse or a luxury saloon?
By BBC News Online's Jorn Madslien

The American people defied the recession and kept on buying cars in 2001.

Though not quite as many as in 2000, when the industry clocked up 17.4 million sales, they still bought more than 17 million vehicles last year, matching the sales figures seen in 1999.

Willy's Jeep
Is it a car or is it a truck?
In fact, 2001 was the second best year yet for the US car makers - at least in terms of sales.

And although both General Motors (GM), Ford and Chrysler saw their sales slip compared to the previous bumper year, by 1%, 6% and 10% respectively, they have all reported rising sales during December when compared with the previous year.

"We're likely to look back on this period of time in determining that consumers are happier and more resilient than we thought they were," said GM's Paul Ballew, an executive director for market and industry analysis.

Roaring trucks

Auto sales were boosted by the industry's autumn campaign in the wake of the terror attacks, when 0% finance was launched by GM under the slogan "Keep America Rolling".

The other two US car makers soon followed suit, and American car buyers responded to the auto giants' national loyalty by behaving like loyal customers.

The biggest sales increases were seen by the car makers' light truck divisions which make large, petrol guzzling four-wheel-drive vehicles that often look, feel and sound like luxury cars.

Which, essentially, is what they are.

The industry insists that these far from environmentally sound modes of transport have been made in response to consumer demand.

But cynics suggest that they are merely a reflection of the different ways in which the European and the US car industries have responded to rising concerns about greenhouse gasses.

Green cars

Whereas for the European market, car makers have by-and-large been forced, by both government clamp-downs and high petrol prices, to develop nifty little cars with smaller and thus less poisonous engines, the Americans car makers have responded by revamping their trucks.

Smart car
A small car for European drivers?
After all; you surely cannot limit the engine size of working vehicles - which is, essentially, what the big, thirsty beast have been designed to be used as?

In fairness, the US car makers "consumer taste" argument is not completely out of place.

The year 2001 is set to be the year when light trucks outsold passenger cars for the first time in history.

So there is no doubt that Americans want to drive trucks.

This may, off course, be linked to the big budget advertising campaigns, which for years have been selling the light trucks as fun lifestyle vehicles for those in need of transporting surfboards, mountain bikes, snowmobiles and groups of friends or large families.

But regardless of the reasons why ever more drivers have come around to favour these large and noisy vehicles; European, Japanese and other car makers have been forced to respond by making light trucks of their own.

Costly sales

And yet; the US car makers' sales numbers for 2001, which were rather impressive given the economic circumstances, were not all due to drivers' insatiable demand for trucks.

Their lust for new wheels had to be matched by ability to pay, and following 11 September there were many who feared they could no longer afford to play the game.

At the time, cut-backs, cost savings and job cuts were already rocking the industry which is notoriously plagued by overcapacity.

But the ultra-cheap financing deals the car makers felt they had to offer to make the public keep buying cars were hard to swallow.

In the red

In December, Ford said its losses for the last three months of the year would be four times as large as analysts had predicted, at nearly twice its losses during the previous three month period.

Lexus GX470
Japan's Lexus: A response to American drivers' tastes?
Ford had already been hit by a string of deadly accidents involving its Explorer light trucks equipped with Firestone tyres, and its chief executive Jac Nasser was ousted during the autumn following a serious rift with the Ford family.

GM, which reported a 74% fall in profits during the first six months of 2001, fared somewhat better than its rival towards the end of the year.

But no US car makers has failed to feel the economic chill that has swept across the global economy.

Chrysler was the biggest loser of the big three American auto groups.

But analysts say they all face tough months ahead.

"I expect sales to slump in the first quarter," said DRI/McGraw Hill economist, Cynthia Latta.

See also:

01 Nov 01 | Business
US car sales booming
13 Dec 01 | Business
Car sales rise in Europe
30 Oct 01 | Business
Ford chief Jacques Nasser ousted
02 Oct 01 | Business
Car makers rattled by US attacks
29 Nov 01 | Business
Ford 'to cut thousands of jobs'
18 Oct 01 | Business
GM warns of tough times ahead
17 Jul 01 | Business
General Motors profits drop 74%
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