U.S. Demand for Light Trucks Skews Market

North American car makers are driving themselves into a tight corner of the global auto market by producing huge numbers of light trucks, according to a new industry report. But the report said the auto makers might have no choice because demand for light trucks is soaring in North America, which is awash in cheap gasoline. Light trucks--minivans, full-size vans, pickups and sport-utility vehicles--now account for 46.8% of all new vehicles produced and sold in the United States, Canada and Mexico, says the study, published this week by Autofacts Early Warning Report, the automotive research division of New York-based Coopers & Lybrand Consulting. The hefty truck sales mean big profits for North American manufacturers, primarily General Motors Corp., Ford Motor Co. and Chrysler Corp., which are expected to report record earnings for 1997. But the profits are coming at the cost of small-car expertise in a world where small cars are the norm and trucks are a market aberration, the report said. North America produces 23% of the world’s total new-car fleet and more than 87% of the world’s large cars, but only 8% of its small cars, the report said. This imbalance will make it difficult for U.S. manufacturers to compete in a world thinking small, the report said.

Also, General Motors Corp.’s Pontiac division said it cut by as much as 0.8% the price of its best-selling car, the Grand Am, which was redesigned for the 1999 model year.