Press Your Luck! Big Bucks--Part Deux

A Toyota MR2 Spyder is parked outside a Toyota dealership in Redwood City, Calif., Tuesday, Aug. 1, 2006. U.S. automakers said Tuesday, Aug. 1, 2006, their July vehicle sales plummeted from last year, when heavy discounts fueled a near record month for the auto industry. Most of the decline was in trucks and sport utility vehicles, the high-margin items on which the three companies depend. But Japan's Toyota Motor Corp. and Honda Motor Co. saw sales increases _ and credited their reputations for fuel efficiency and strength in small cars for boosting their appeal during a period of high gas prices. (AP Photo/Paul Sakuma)

Now looking at my previous post, Press Your Luck! Big Bucks--Triple Whammy, I certainly noticed the top Yahoo News story titled, Toyota, Honda report sales jump in July:

DETROIT - Amid steep gas prices, Toyota Motor Corp. rode its reputation for fuel-efficient cars to a double-digit sales increase in July and outsold Ford in the U.S. for the first month ever. Honda Motor Co. also reported robust sales.

U.S. automakers experienced a moribund July as sales plummeted from a year ago, when heavy discounts spurred a near record month for the auto industry.

Overall, 1.49 million vehicles were sold last month, a 17.4 percent decrease from July 2005. The seasonally adjusted sales rate, which shows what total sales would be if they remained at the same rate for the entire year, was 17.24 million, according to Autodata Corp. Automakers sold 17 million vehicles in 2005.

GM, the world's largest automaker, said its sales fell 22.2 percent, with trucks falling 31.2 percent and cars inching down 2.7 percent.

At Ford, sales of Ford, Lincoln and Mercury vehicles fell 35.2 percent. Truck sales tumbled 44.8 percent, while cars slipped 6.7 percent. Sales of F-Series pickup trucks, long the country's best-selling vehicle and the company's most important vehicle, shot down 45.6 percent.

DaimlerChrysler's Chrysler Group said its sales fell 37.4 percent, with truck sales off 40 percent and car sales off 23.5 percent. That change happened even though Chrysler, alone among automakers, has revived the employee price promotion that fueled sales last year.

Toyota's sales, meanwhile, soared 11.7 percent, with cars jumping 19.8 percent and trucks up 1.3 percent. The company outsold Ford by more than 17,000 vehicles.

Honda said its July sales rose 6 percent, with cars up 5.4 percent and trucks up 6.8 percent. The company said it was unable to keep up with demand for its small cars.

So what is happening here? It should be obvious. Consumers are dumping their big, gas-guzzling SUVs and buying up the smaller, fuel efficient Toyotas and Hondas due to the high gas prices at the pump. For the past 16 years, Detroit's Big Three automakers have been addicted to the big SUVs, which commanded higher profit margins, but at the expense of lower fuel efficiency. They never bothered to invest in higher fuel efficiency vehicles, and certainly not in the hybrid technologies that are now coming out in the best-selling Toyota and Honda models. When the gas prices shot up, Detroit's Big Three are again playing catch-up to the Japanese. And consumers that have purchased their gas-guzzling SUVs during the 1990s, are replacing those SUVs with the smaller Japanese vehicles. And with their declining sales and profits, Detroit's Big Three automakers will not have the resources necessary to design new and refreshing models in which they can compete against either Toyota or Honda.

In other words, the Detroit Big Three automakers are going down the drain.