Deja Vu in the Automobile Business

It is no secret that the American auto companies (but not the Japanese and Korean companies) are suffering now that gas prices are going up. There are lots of articles out there explaining this. Here are some quotes from one in Bloomburg.com (my italics):

'June 2 (Bloomberg) -- Toyota Motor Corp. and Honda Motor Co. led Asian automakers to a record share of U.S. automobile sales in May on demand for smaller, more fuel-efficient vehicles.

Japanese and South Korean brands captured 40.2 percent of sales, up 3.9 percentage points from a year ago, passing the previous high of 40 percent set in October. Asian brands posted a combined 10 percent sales gain, led by increases of 17 percent for Toyota and 16 percent for Honda.

Rising gasoline prices are blunting demand for trucks, which account for a majority of sales for General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler unit. Toyota's new Yaris subcompact and Honda's new Fit small car travel almost 40 miles on a gallon of gasoline, compared with 17 miles a gallon for Ford's F-150 pickup, according to the U.S. Environmental Protection Agency.

``Honda and Toyota's focus on cars paid off in May when high gas prices propelled their sales upward, outpacing truck- centric GM and Ford's gas-guzzling offerings,'' said Brian Bruce, who helps manage about $18 billion in equity, including Ford and GM shares, at PanAgora Asset Management in Boston.

...... Gains for the Toyota City, Japan-based company were led by the new Camry sedan, the Yaris and Scion small cars. ....Toyota's market share jumped to a record 15.8 percent, compared with 13.4 percent in May 2005, according to Autodata Corp.

Honda, based in Tokyo and fifth in U.S. sales, raised sales to 141,810 vehicles from 122,169 a year earlier. The increase was led by the Accord sedans and coupes, the Civic small car and the Fit subcompact.

There is more along these lines. The interesting, and depressing, thing is that I have been reading stats like this for the last 30 years or so. I have also been reading articles pointing out, over and over, that American car manufacturers where concentrating too much on the big vehicles with big profit margins, and deliberately abandoning the small car market to foreign companies. There always been auto journalists and business analysts pointing out out that they were putting all their eggs in one basket: one basket totally dependent on cheap gas which almost no one expected to last indefinitely.

If so, the chickens that laid the eggs have come home to roost. Deciding on R & D for a future product mix must be a complicated job, but didn't the American execs read the same articles? Did they think that the executives at Toyota and Honda continued to develop small cars simply because they couldn't compete with the American companies in real vehicles, like SUVs and large pick-ups?