In the first half of 2008, before things started to take a decisive turn for the worse, there was good news and bad news in the global auto industry.
-- There were expectations that full-year sales would rise.
-- Tata unveiled its $2,500 Nano in January. Two months later the Indian automaker acquired Jaguar and Land Rover from Ford.
-- BMW expanded its US car production, but also increased US reserves to deal with falling used-car prices.
-- European carmakers fought to get a better deal from Brussels on CO2.
-- At the Geneva auto show in March, the focus was clearly on green cars.
Things changed fast
Then, in the middle of the year, the horizon darkened.
-- A global credit crunch hit consumer confidence. People stopped buying cars.
-- Full-year sales projections dropped. Car companies announced temporary production cuts.
-- US automakers seemed on a one-way street to disaster.
-- Toward the end of the year, automakers on both sides of the Atlantic were asking for government help and the industry looked destined for one of the toughest years in recent memory.
Heres a quarter-by-quarter review of a year that was a turning point for the industry.
The year started with a sharp decline on Wall Street, triggering fears of a major US economic slowdown.
In Europe, German contract manufacturer Karmann cut its work force by 580. In the US, General Motors announced plans to cut 74,000 workers.
But the outlook remained generally upbeat, with many carmakers counting on new products to help them through difficult times.
Tatas unveiling of the Nano was soon followed by an announcement by Renault and its partner Nissan that they would build a small, cheap car with Indias Bajaj. Other carmakers also planned new, ultra-low-cost models.
At the Geneva auto show, with much fanfare, Volkswagen showed its Scirocco coupe.
And in March, news that Tata would acquire Jaguar and Land Rover raised expectations for the future of the venerable British brands.
In the spring of 2008, carmakers and suppliers still expected a good year, despite high raw materials costs and an anemic dollar. The US currencys persistent weakness was making sales of European-made cars unprofitable in the US. This affected Volvo, Porsche, BMW and others.
The European industry saw the beginning of a shift to smaller cars amid expectations that CO2 related taxes would penalize big cars with big engines. Frances system of tax penalties and rewards based on CO2 emissions set an example for other countries to follow.
In Sweden, expectations rose that -- sooner rather than later -- Ford Motor would sell Volvo and General Motors would offload Saab.
And in June, BMW successfully stopped China Automobile Deutschland from selling its Shuanghuan CEO in Germany. The large SUV looks similar to the previous-generation BMW X5.
Summer in Europe provided the first clear indications that 2008 would be different, both for the world economy and for the auto industry.
In July, it was clear that markets were stagnant, the model mix continued to shift downward, raw materials prices stayed sky-high and US profits remained elusive because of the weak dollar. In Europe, sales of big SUVs and large cars were plummeting as the price of oil -- and gasoline -- hit record highs.
Major markets such as Spain, Italy and the UK showed double-digit sales declines in August.
First-half new-car sales dropped 2.7 percent in western Europe and, throughout the summer, there were growing signs that companies would start issuing profit warnings before year-end.
Market researchers began to predict that 2009 sales would hit 10-year lows and carmakers started to cut product plans.
But before the end of the summer, there were still some surprises. The biggest one: Privately held ballbearings maker Schaeffler Group made a surprise -- and ultimately successful -- bid for Continental. Following the announcement of the deal, Conti CEO Manfred Wennemer announced he would leave the company. In late August, Karl-Thomas Neumann succeeded Wennemer.
At the time of the Paris auto show in early October, it was clear that the auto industry was in crisis mode. Though the companies used the show to present a dazzling display of electric cars, sexy new products and state-of-the-art new automotive technology, all that the executives were talking about was the uncertain outlook for 2009 and beyond.
That worried sentiment was echoed by suppliers gathering in Wolfsburg, Germany, in late October at the International Supplier Fair there.
As the year drew to a close, automakers and suppliers were cutting production forecasts, curtailing all non-essential expenditures and taking other steps to prepare for a tough 2009.
And in an Automotive News Europe interview published December 8, Fiat group CEO Sergio Marchionne predicted that, by the end of 2010, there might only be five or six global volume carmakers left.