Automakers Are Cutting Back Or Delaying Future Vehicle Programs

Autoparts Report, June 18, 2001

Autoparts suppliers are feeling the effects of a weakening economy and slowing sales, as U.S. automakers are cutting back on car and truck development programs to help cut costs. Auto parts suppliers and industry consultants say General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group are all delaying or paring back a wide range of future vehicles.

At GM, the Buick Signia and Pontiac Banner - sport wagons originally expected to debut in 2004 - have been delayed indefinitely, the Detroit News reported. Ford has pushed back the planned 2003 launch of the next-generation Ford Ranger pickup for as long as three years. And at Chrysler, the Chrysler CS, a crossover vehicle based on its 1999 Citadel concept car, likely will debut in early 2003, six months later than expected.

While the postponements will save the automakers millions of dollars in the short term, the moves could put Detroit's manufacturers at a competitive disadvantage to foreign brands, the newspaper said.

GM, Ford and Chrysler, which rarely talk about future vehicles, said that if there are program delays, it's not just for financial reasons, but strategic ones, too. They said any postponements are designed to ensure a new vehicle is absolutely right for the market and can hold its own against competitors from Honda and Toyota.

There is growing concern among auto executives that the U.S. vehicle market is poised for a shift. The growth of traditional truck-based sport utility vehicles and pickups may be slowing as consumers seek more car-like SUVs and crossover vehicles. The changes could be quickened by higher gas prices and demand for more fuel-efficient vehicles.