Chrysler to Cut Small SUV Production

With numerous companies heavily affected by the global economic crisis, Chrysler announced a couple of measures meant to reduce and minimize the effects. First of all, the American company said it will cut no less than 1,825 jobs at two truck plants, mostly due to the decreasing demand of such vehicles. Secondly, it will reduce the production of small SUVs and hybrids until 2010, when analysts predicted an increasing demand of electric cars.

"If the vehicles are not selling and are backing up on lots, it doesn't make sense to keep making them," said Aaron Bragman, research analyst with IHS Global Insight, according to The Detroit News. "The markets are facing unprecedented turmoil and we are in a time of historic change in the auto industry. These tough, but necessary steps are vital to our long-term viability,” Frank Ewasyshyn, executive vice president of manufacturing, added.

Similar decisions were taken by carmakers from all over the world, especially the ones based in North America and Europe where the global economic crisis has reduced the demand of high-power cars. With most customers becoming interested in low-cost vehicles that would provide a lower fuel-consumption but less-powerful engines, large companies such as Volvo and Jaguar Land Rover had to cut jobs and reduce the production capacity by thousands of units.

The best example is given by three motorcycle giants, namely Honda, Yamaha and Suzuki, who decided to reduce the moto production by approximately 100,000 units. Moreover, the exports to North American and European markets were reduced due to decreasing demand, with most companies focusing on Asian countries with less-affected economic crisis markets.