Consumers Won't Buy From Bankrupt Car Maker
Tuesday, December 27th 2005, 10:40 am
By: News On 6
CHICAGO (AP) _ Nearly three-quarters of Americans wouldn't buy a car from a bankrupt company, according to a recent survey.
In a nationwide survey by the Cincinnati-based research firm Directions Research Inc. published Friday, only 26 percent of respondents said they would purchase or lease a new car from a manufacturer that had declared bankruptcy.
General Motors Corp. lost nearly $5 billion in its North American automotive business in the first nine months of 2005, and speculation has mounted among investors that the auto maker may eventually be forced to file for Chapter 11 protection.
GM recently announced it would close 12 North American manufacturing plants as part of a plan to cut $7 billion in costs per year.
Company executives have denied they consider bankruptcy an option. They have noted that buying a car is a long-term commitment, and buyers will be put off if the manufacturer is bankrupt or considering bankruptcy.
The survey data indicate that consumer attitudes toward a bankrupt auto maker would differ significantly from those toward airlines that have filed for Chapter 11.
Several large airline companies, such as UAL Corp. and Northwest Airlines Corp., are in bankruptcy and continue to have passenger numbers similar to carriers that aren't bankrupt.
The survey polled 1063 randomly selected adults during the three weeks ending on Dec. 14. The results had a margin of error of plus or minus three percentage points.
Directions Research said the survey wasn't done at the request of a client nor paid for by an interest group.
Among other findings, 28 percent of those surveyed said they would consider purchasing a car from a Chinese company if it started selling in the United States.
Only 15 percent of respondents said they would purchase a car from an Indian company.