Low dollar forces carmakers to modify production

The falling dollar has already forced GM to cancel a number of imports and instead focus on increasing exports to new markets such as Europe and China, and a similar story can be told for most other carmakers with manufacturing bases in the States. Ford, Chrysler and GM have all had to reduce the number of vehicles they import into the U.S. but the problem is also having a negative effect on most of the foreign makes as well.

On the other end of the stick, European manufacturers are finding it harder to justify importing cars to the U.S. as the dollar weakens. VW's board member of production Jochem Heizmann stated during a recent interview with Automotive News "it is no secret that VW loses money in the U.S. selling cars," and that "in the States, the only solution is local sourcing and local content." Mercedes and BMW are in hot water as well, although they seem to be better off than the other European marques due to the fact that they are already building vehicles in the U.S.

While some are calling the dollar's dive a crisis for the motor industry, others believe that the dollar will strengthen in time. In fact, many suggest there’s no real crisis on hand at this point and that the dive is just a part of the cyclical nature of floating exchange rates.