Toyota Motor Corp said yesterday that it will stop all of its North American factories for two full days next month.
At the same time, Nissan Motor Co. provided a dismal prediction of the auto industry's near-term future to the media. Predictions that, if they hold true, could affect the satellite radio industry more than previously expected.
Toyota, the world's biggest automaker, has already canceled all U.S. production of its light trucks for three months this summer. Production is to be further reduced in 2009 at three U.S. assembly plants, according to a spokesperson.
XM installs in Toyota vehicles was expected to reach one-million vehicles annually by 2010. There's no word whether this was a contractual obligation, or an estimate based on predicted production levels.
Toyota also did not disclose how many produced vehicles would be lost as a result of the two-day stoppage on December 22nd and 23rd (which is in addition to a scheduled break for Christmas and New Year).
Meanwhile...
Carlos Ghosn, CEO of Nissan and Renault SA, warned of his own bleak view of the auto industry's prospects in Washington with a reminder that Nissan was expecting virtually no profit in the October-March second half.
"We have to recognize 2009 will be one of the most challenging years for our industry and the whole economy in the last 50 years," Ghosn told the Wall Street Journal in an interview.
Ghosn told CNBC that U.S. industry-wide sales falling to 11-11.5 million vehicles next year was a "realistic" assessment. For comparison's sake, in 2007 auto sales totaled 16.15 million.
So what does that mean for the satellite radio industry? I think Sirius XM Radio Inc. CEO Mel Karmazin said it best during the Q3 earnings call:
"Unfortunately we do not have a whole lot of control over what cars are getting sold," said Karmazin to investors. "We do our best. We help our car partners any way we can, but we are not the ones that are selling cars.
"So we are at the mercy of what happens."
[via Reuters]
What sirius has to do at this point is what everyone else is doing and thats weather the storm. This isnt pretty, Its not going to be fun but if they can get the debt issue behind them and weather this mess until the auto industy recovers they will be fine. The auto industry is going to have to lower its prices on all lines and models in order to get the ball rolling again and start selling cars. The picture is grim but its grim for everyone. Not just the auto industy, Satrad but for banks and just about everyone else too. It might take until next summer or longer for us to get to the turning point and to see this economy start to recover.
"There's no word whether this was a contractual obligation...?" Well I would think they wouldn't really give a f*ck about satellite radio when all things are considered.. It's a very marginal part of the overall package (even though it's very important to Sirius/XM).
Maybe if people are stuck in the same ride for awhile longer they should update it with Siris/xm to make it more bearable
With SIRI shares at 17c, hope for the sat radio business apparently is all but lost. I doubt they'll see 50c/share again before they come out of bankruptcy.
God forbid that SiriusXM goes into bankruptcy and then gets bought out by a terrestrial company like Clear Channel. If that happened, it would be like a cattle stampede. People would be running for the exits, tossing their radios into the garbage on the way out.
Fright said- "Well I would think they wouldn't really give a f*ck about satellite radio when all things are considered.. It's a very marginal part of the overall package (even though it's very important to Sirius/XM)."
Yes, it is a marginal part of their overall package, but you are wrong to assume they don't give a f*ck about sat. radio. Car companies make money off of sat. radio for the life of the car. If they sell any cars, they will want it to include sat. radio. Any form of revenue they can garner at this point is a positive to the car companies' bottom line.
The economy on a global scale is in dire straits, I hope everyone saw this coming. The auto industry is going downhill fast. People won't be buying cars when the economy is the way it is. Consumer spending as a whole is down. People aren't worrying about cars, they are worrying about their retirement.
Or they could get bought out by a company that has a clue, like Apple or some other tech giant. At this point a buyout by some other company would be the most viable way to get satellite radio to survive, then the new company can throw Mel out on his ass.
I transport new/used cars for the nation's largest non-union company. Most people have no clue how widespread the damage to the auto industry is right now. The dealerships are doing thier best to cover it all up at the front door, "everyone smile and pretend everything is fine" is what the mgrs. at the dealerships must be saying. Not only are the dealerships full with unsold units, but the auto auctions are PACKED FULL of cars with NON PAYING sat radios. I'm watching my career get flushed down the toilet too, sucks. Even Advantage Rent-a-car has filed for chapter 11., so now all those cars (1000's) are going the auctions (graveyard) to sit for god knows how long.