General Motors, the maker of the iconic off-road Hummer, may be gearing itself up to sell mini-cars in the US, in order to win back market share as soaring fuel costs turn Americans off gas-guzzlers.
Usually sold only in Asia and Latin America, GM is thought to be developing a version of the Chevrolet Beat for America’s highways, according to a report by Bloomberg. Not much bigger than the Daimler Smart car, the Chevrolet Beat does 40 miles to the gallon - making its fuel efficiency second only to hybrid cars in the US.
The consideration by GM comes after the company’s US sales tumbled 18.5pc last month, while rivals Ford and Toyota also reported dwindling sales, down 28pc and 11.5pc respectively.
Yesterday, shares in General Motors plunged to their lowest level since September 1954 as fears for the company’s future escalated. One analyst at Merrill Lynch told the market that a GM “bankruptcy is not impossible if the market continues to deteriorate”. The group’s shares closed down 15pc to $9.98.
Meanwhile, fellow motoring giant Ford reported a 27pc fall in truck sales for June, with 59pc of sales now secured by cars and cross-over vehicles.
advertisementIn a further sign that cash-strapped Americans are downsizing, sales of BMW’s Mini jumped 25pc in June. BMW introduced the Mini to the American market in 2002, reaching record sales of 42,045 cars last year. The German carmaker sold 26,400 Mini’s in the first six months of this year - putting it on course for another record. Sales of small cars across the US rose 31pc in the first six months of the year, with sales of the biggest SUV’s falling a corresponding 31pc.
GM has reassigned many of its engineers to its new mini-car project, and has reportedly suspended SUV and truck programs until demand returns to the market. A GM spokesman told Bloomberg: “We are looking at and reviewing our entire portfolio, not just because gasoline is $4 (a gallon) but because of stricter government fuel economy regulations”.
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