Auto bankruptcy would drive away buyers: survey
DETROIT (Reuters) - More than 80 percent of Americans who intend to buy a new car would abandon their plans if the automaker behind the brand filed for bankruptcy, according to a study released on Wednesday.
The study of 6,000 people who intend to buy new vehicles by auto market research firm CNW Research found the sales losses from bankruptcy would be highest for the U.S. automakers.
The blow would be hardest on privately held Chrysler LLC, with about 91 percent of those who intend to buy a new car within six months abandoning the automaker's brands for rivals, CNW said.
Similarly, about 80 percent of car shoppers said they would drop plans to buy a vehicle from General Motors Corp or Ford Motor Co in the event of a bankruptcy.
The survey comes at a time when the cash position of all three U.S. automakers has come under scrutiny because of continued sales losses in the U.S. market and a shift away from the trucks and SUVs where they have dominated.
GM announced on Wednesday a sweeping plan to cut $10 billion in costs over through 2009 and to sell up to $4 billion in assets in order to shore up its liquidity.
Before the announcement, GM Chief Executive Rick Wagoner said speculation that the automaker could file for bankruptcy was both "inaccurate" and a concern for the automaker's dealers.
Chrysler, now controlled by Cerberus Capital Management, sent a letter to its dealers earlier this month saying that reports of its financial distress were unfounded.
One of the major uncertainties for the distressed industry has been how consumers would react to a bankruptcy filing.
CNW Research said its survey suggested that any bankruptcy filing by one of the major automakers would be a "disaster" for brand loyalty.
"Admitting defeat, as bankruptcy would do in the minds of consumers, sends shoppers other places," the research firm said in its report. "There is no loyalty to the brand."
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