NEW YORK (FORTUNE) -- Detroit begins its annual summer shutdown July third - and just in time. Domestic automakers are going through a miserable year.

Interest rates are up, gas prices are up, and consumers have new and nearly new cars triple parked in their driveway, which isn't encouraging them to buy more. Halting production in the Big Three's factories for two weeks will ease their pain by only a little.

Consider:

General Motors (Charts) has already warned investors that sales in June will be as much as a third below last year's level and July isn't expected to be much better. That could plunge GM's market share down into the low 20s - perilous territory for a company that still has the structural costs of a company built to control nearly 30 percent of the market.

Ford Motor (Charts) chairman and CEO Bill Ford made a rare public statement to admit that the company's much advertised "Way Forward" turnaround plan is running into headwinds.

Worse, Ford, an ardent environmentalist, has declared that his previous pledge to build 250,000 hybrid vehicles by the end of the decade is now inoperative - because the company likely couldn't sell them.

And Chrysler (Charts), which has been parking unsold vehicles around Detroit hoping for dealer orders and using outsized incentives to move them, has decided that its way to salvation is to advertise its ties to its sister company Mercedes-Benz.

It is launching a new campaign starring DaimlerChrysler chairman Dieter Zetsche as the spiritual heir to Lee Iacocca, reminding customers that a little bit of German engineering finds its way into those Hemi engines.

In the short term, what all three of these companies will do is to go back to the same addictive medicine they have been hooked on before: lavish market incentives. Detroit is has been rife with rumors about what moves Chrysler, which has the worst inventory problem, will make and how GM and Ford will respond.

Whatever they do will be ruinous to profits. End of model year clearance sales are something of a necessity because dealers can't start selling '07 models until they clear out the '06s. But resorting to big, blow-out promotions again only reinforces the habits of smart consumers to wait for clearance sales before they buy.

Detroit automakers like to pretend that such practices are only band-aid remedies, but years and years of discounting have taken their toll on the perceptions of Detroit's brands.

In the latest J.D. Power Appeal study, which measures owners delight with their new vehicles, imports, led by Porsche, BMW, Mercedes, Lexus and Infiniti, top the rankings. Domestic brands - Lincoln, Cadillac, Hummer, and GMC - occupied only four of the top 20 slots.

Ford and Chrysler both entertained journalists in Detroit last week at so-called "full-line" previews of their 2007 product offerings, and the results were not encouraging.

Designs and executions look like step improvements from previous generations but not the game-changers these companies need. The big news at Ford - a crossover SUV to be marketed by a Ford division as the Edge - only looked to be competitive with import vehicles that are already for sale.

Over at Chrysler, hopes are pinned to the Chrysler Sebring, which must do battle in the poisonous mid-size segment against the powerhouses Toyota Camry, Honda Accord, and Nissan Altima. Good luck there.

As Zetsche confessed over lunch in New York earlier this week, there is a large cohort of car buyers who won't consider a domestic brands until the cars have demonstrated that they are equal to the imports - a process that Zetsche figures could require, in many cases, five years.

All of which underlines the unavoidable point that despite all the good news on the cost side - GM is poised to reduce its hourly workforce by 47,000 or nearly one-third - Detroit has not solved its other fundamental problem, that of generating significant revenue.

It has to be able to sell more cars that customers actually want to buy and will pay good money for if it expects to remain in business. And while GM, Ford, and Chrysler all have their individual strengths and weaknesses, that remains the fundamental weakness in the domestic auto industry.