Market Equilibrating

 Everyone would like to have a sense of security and stability. Maintaining financial stability is a goal everyone tries to achieve. The recession that AmericaA? a‚¬a„? s economy is currently facing have caused consumers to change the way they shop or buy items. Consumers are more cost conscious. Consumers have changed things from the way they grocery shop to the way they travel or commute. The recession has not only impacted consumers, but also numerous industries. For example, the automobile industry has been affected. The economy recession and the fluctuating gas prices have the automobile industry feeling the crunch.

The hike in gas prices along with the recession has individuals wanting small more fuel efficient automobiles. GMC, which is most popular for its SUVs, have seen drastic drops in its SUV sales. A? a‚¬A“General Motors said its truck and SUV sales dropped 27 percent, dragging down increases in car and crossover sales and GM's best-ever month for hybridsA? a‚¬A? (Durbin,2008). The car sales such as the Malibu have increased 40 percent and the SUV like the Trailblazer has fallen a tremendous 73 percent. A? a‚¬A? GM's overall sales were down 16 percent for the month (May 2008) compared with last April (2007)A?

a‚¬A? (Durbin, 2008). Ford Motors is also feeling the effects of the cost conscious consumers. In 2008, the sales for their most admired SUV, the Expedition reduced 36 percent (only has a 12 miles per gallon efficiency. Whereas, their most popular fuel efficient car (24 miles per gallon efficiency); the Focus sales increased by 44 percent. A? a‚¬A“George Pipas, Ford's top sales analyst, said retail -- or non-fleet -- sales of passenger cars exceeded those of trucks and sport-utility vehicles combined for the first time in at least 20 yearsA?

a‚¬A? (Durbin, 2008). The higher the fuel price gets the demand for SUVs and large vehicles decrease, and the demand has shift to smaller fuel efficient, or hybrid cars. Both companies (Ford and GMC) need to introduce more fuel efficient SUVs so the sale of SUVs and cars will eventually balance each other. Durbin, D. (2008) SUV and Truck Sales Plunge. Retrieved fromhttp://www. washingtonpost. com/wpdyn/content/article/2008/05/01/AR2008050 Prev Page Next Page Search