Cars for U.S. automakers to keep, and quit

By Jacqueline Mitchell

updated 7:35 p.m. ET Dec. 9, 2008

Detroit auto executives delivered a plan designed to convince Congress — and consumers — that they're worthy of a $25 billion bailout that will help keep them in business. But some cars made by the big three — Chrysler, GM and Ford — are so unpopular with consumers that it's hard for many to consider the idea of keeping the automakers afloat with taxpayer money.

However, the big three do build plenty of cars that are enjoying strong sales even during the tough economic times (though 2.5 million consumers chose not to buy a car this year because of tighter credit and economic uncertainty). It's the automakers' poor performers that are helping drag down the industry.

Detroit automakers have been hit particularly hard because of the automakers' longtime reliance on gas-guzzling SUVs and big cars. Those models are seeing some of the worst sales, even with gas prices well off its July highs — currently at $1.70 per gallon on average in the U.S.

Market-research firm J.D. Power and Associates says 12.5 percent of GM's year-to-date sales were utility vehicles, compared with 5.9 percent of total sales for Toyota. But while Toyota's total sales are off 11.5 percent during the first 10 months of the year, GM's are down 20.4 percent.

The Hummer brand in particular, is too big, too expensive and too gas greedy for most of today's consumers. Hummer sales were off nearly 22 percent in 2007 compared with 2006, and when gas prices reached $4 a gallon this summer, Hummer's fate was sealed. Its sales were off nearly 49 percent during the first 10 months of the year, compared with the same period last year.

More from Forbes.com Click links below for slide shows What your car says about you How dangerous is your state for DUI? America's most-stolen cars America's least-stolen cars

But as big a loser as Hummer has become for GM, the automaker does have a couple bright spots. The Chevrolet Malibu and Buick Enclave are both among the biggest winners. Sales of the Enclave, a new crossover introduced in 2007, are up 88 percent so far this year compared with the same time last year. The Malibu was redesigned in 2007 and has been a hit — sales are up 39 percent — among buyers who want a quality, fuel-efficient mid-size sedan packed with amenities and priced competitively.

What's Detroit's problem then? Along with unpopular models, it's the bad economy and tight credit, say experts, not poor quality.

"This perception of poor quality is an illusion at this point," says Stephanie Brinley, auto analyst at AutoPacific, an industry research and analysis firm. "Their cars are at least as good as the Asian makes in every comparison. The perception, however, still lags the reality."

To find Detroit's cars worth saving and worth writing off we looked at sales for the first 10 months of the year compared with the same period a year ago. Vehicles with the biggest sales gains so far this year and in 2007 (as well as 2006, if the car was in production) were considered. Vehicles that had sales losses greater than the industry average of 14.6 percent so far this year and sales losses in the previous two years were considered worth writing off.

MORE FROM AUTOS

Autos Section Front

Toyota to replace 3.8 million gas pedals   Nissan hatches plan to boost battery cars Saab’s future unclear as GM loses bidder Toyota to recall 110,000 Tundras over rust Leasing again becoming option for auto buyers GM asks Europe for up to $4.9 billion handout Electric car maker Tesla seen going public 10 strange-looking foreign cars VW to buy Karmann Ghia-maker's assets Ford, Subaru, VW win top safety picks Autos Section Front   Add Autos headlines to your news reader: