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Chrysler and General Motors – What to Expect For 2010

Chrysler and General Motors – What to Expect For 2010

Since late 2008, Chrysler and General Motors have received over $85 billion in loans from the federal government. These funds were designed to revamp their current manufacturing and assembling processes. Additionally, these funds were appropriated for research and development for the production of advanced vehicles with fuel economies of at least 35 mpg by 2020. However, recent reports suggest about $30 billion will never be recovered. Consequently, both companies filed for Chapter 11 bankruptcy protection in 2009. Since this filing, General Motors has unloaded four brands from their lineup: Saturn, Pontiac, Saab, and Hummer. Moreover, Chrysler has merged with Fiat, with plans to create smaller, more profitable vehicles. The 2009 car and light truck sales totals are at their lowest in 28 years, leaving plenty of room for speculation of these companies potential sustainability.

The beginning of 2010 continues to be a good time for car buyers. Creative buying incentives from the “Big Three” U.S. automotive companies have enticing offers to any customer walking through their dealership doors. General Motors just ended their campaign to unload all of their Pontiac and Saturn inventories with savings of up to over $7,000 per vehicle. Currently, GM is offering 0% APR financing or up to $4,500 cash back on new vehicles. Chrysler is offering incentives similar to that of GM. However, their cash back options are about $2,000 less than that of GM. Toyota, seeing a significant decrease in profits last year, are also promising low APR financing options. Expect to continue to see these specials for at least the next two quarters.

So what else can we expect for 2010? Hybrid cars continue to rise in popularity in the U.S. More people are environmentally conscience than ever before. Additionally, hybrid cars are more fuel-efficient. To date, there are 23 hybrid vehicles on the market in the U.S. General Motors has introduced the Sierra, Yukon, Silverado, Tahoe, and the Escalade, available in hybrid form. Interestingly enough, Chrysler offers only one hybrid vehicle, the Aspen. If GM and Chrysler focused more of their energy on fuel economies instead of high profit margins related to SUV sales, they could have prepared for the forces of the economic crisis.

Recently, General Motors announced the creation of a plug-in hybrid available later this year. The Chevy Volt, touted as GM’s savior, is expected to take the auto industry by storm, with an EPA rating of 230 miles per gallon Additionally, a tax credit of $7,500 is available to customers willing to go electric. Hopefully this will be the beginning of a new era of fuel-efficient cars from American motor companies.