Domestics may end month with market share below 50%
Can a drawn-out incentive campaign keep the domestics ahead of the imports? Automotive News, for one, seems to think it would only serve to delay the inevitable. Detroit is on a trajectory to fall below 50 percent in market share in the very near future, maybe even this month. It seems obvious that offering rebates and other incentives is merely a band-aid for the underlying issue. As of the first half of 2007, GM, Ford and the Chrysler Group were down to just 50.2 percent of the new-vehicle market. That's a record low. A year ago that number was 56.0 percent. So given the fact that their share is plummeting, does it make sense to throw money at the problem and try to hold onto something they will surely lose eventually?
Actually, they may need the incentives just to stay competitive. Toyota, Honda and Nissan have really been aggressive in using incentives to grab customers this year. The Japanese now account for 37.5 percent of the market, up 5 percent from last year. Sure it comes with some psychological baggage, but losing market share isn't everything. It's a largely meaningless number and profits mean more in the end. Not that the domestics are any better in that arena, but dwelling on market share is a bit misleading.
[Source: Automotive News - sub. req.]
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Reader Comments (Page 1 of 1)
TIM 5:27PM (7/09/2007)
GM needs to axe Buick in the US until they get their house in order. I think GM's thinking is that there are Chevys in the 10-20k range, Buick in the 20-30k range and Caddy at 30k+. Buick is redundant if Saturn and Saab already operate in the 20-30 range. I mean lets look at costs of maintaining Buick which includes manufacturing R and D as well as advertising. Right now focus on profits and hone the product pipeline. GM energy right now is spread thin and you get a lot of duplication. I mean why doesn't GM have Chevy and Opel in GM along with Buick in China? Is it because that would be too many brands?
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seoultrain 8:41PM (7/09/2007)
plus they could use tiger woods to promote a better brand.
Be Oh Be 10:30AM (7/10/2007)
Glad you aren't running GM (for GM's sake). While you're using market share, you'd actually *kill* brands? That makes absolutely no sense at all. Not everyone that was in the market for a Buick would just go and buy a Chevy because Buick wasn't there. And R&D really isn't that much for a different brand, not with platform sharing and all. Look at how many sales they lost when they killed Olds - probably 300k cars a year or so? GM even admits that was a big mistake. I always laugh when I read "kill brands, kill brands - that will make them better". They have too much history and money tied up in those names to do that.
Be Oh Be 10:30AM (7/10/2007)
In my last post, I meant to say "losing" market share, not "using". sorry.
Johnny Rocket 5:48PM (7/09/2007)
Oh no. Monthly sales...
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Kyle 5:49PM (7/09/2007)
This was going to happen sooner or later. There are only three American companies while there is Honda, Nissan, Toyota, Scion, Suzuki, Hyundai, Kia, Volkswagen, BMW, Mercedes-Benz, Audi.... There are a lot more import companies than domestic companies.
Its very sad that something like this will eventually happen considering where they used to stand. GM used to soley own 60% of the market. However like Frank said, its really a meaningless number as profit is what counts. Its more important that the domestics get everything in line and make money first.
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Frank 6:04PM (7/09/2007)
I think that GM in particular is making very solid cars to go with the very good pickups and SUVs. I just drove a rented Buick Lacross from Chicago to Cleveland and back. It was one of the best driving cars I have ever been in. Why does'nt it sell ? You cant tell me that the Accord is better looking ?
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thatguyoverthere 6:36PM (7/09/2007)
The accord is (slightly) better looking
Johnny Rocket 7:36PM (7/10/2007)
I agree. But not by much.
TriShield 6:11PM (7/09/2007)
This is pretty sad news for out country and our home auto industry.
What's worse, each US automaker has some fine products available (especially GM) for consumers right now.
With incentives increasing, at least consumers will be able to get some very nice cars from the Big 3 at firesale prices.
None of them can afford for it to last forever though, and it won't unless something gives. Like their sky-high labor costs.
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itguy08 12:09PM (7/10/2007)
I wouldn't call much from GM "good". The only thing really going for them is the Aura and even that doesn't stack up as well as some of the others.
Ford is in a similar boat - however their new designs are quite good. Just spent a week in an Edge and both my wife and I were amazed at how good it was. Ford got put back on the list when she's in the market for a new car. Heck, they even got to the top of the list. Not a small feat as we both had sworn them off after my Explorer. Ford's issue is more the dealers service department. Way too many "Can't duplicate" while my G35's service department visits have been "Can't duplicate but we think it's this and replaced it."....
However some of the other designs (Taurus, Focus, etc) need lots of help. The newer ones are great (Edge, Fusion).
It's just changing perception of the import buyers. It's funny how they proclaim Toyota (with it's sludging issues) and Honda (who still can't build a reliable automatic) are the best yet the American brands suck.
Darrell 8:05PM (7/09/2007)
yeah no kidding. you can't expect people to stay ignorant all the time can you? the American marketing policy, in this information age, is asinine. "Let's hope they never pick up a consumer reports, plaster "BUY AMERICAN" on everything (thought most Japanese cars are made in USA and American cars are made in Canada and Mexico) and then keep making crappy cars with designed obsolescence in it."
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obie 10:14PM (7/09/2007)
ignorant to what? i think people are really being ignorant to the fact that the american car companies produce products that are just as good, if not better than the imports--and the fact that although the imports create some jobs in america, the decline in the american auto industry has led to more people losing their jobs. i know that there is more to it than just that, and that some good things are coming out of the increased competition, but for american car companies to have less than 50% of the market share in america is ridiculous, and shameful...
Classifieds 7:56PM (7/09/2007)
Its nice to get the stats like this. Thanks.
Dave,
http://effectlocal.com
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TriShield 8:53PM (7/11/2007)
Darrell, the majority of American cars are in fact assembled in the US. They are also engineered here and the majority of the parts are also engineered and come from suppliers based here. Our automakers are homegrown and homebased just as all the foreign automakers that sell their products here as well.
A BMW 3-Series assembled in South Africa is not suddenly a South African car. The 3-Series is also assembled in China, that doesn't magically make it a Chinese creation or BMW a Chinese company. That type of thinking is patently absurd, and it also applies to the Japanese automakers doing business in our country.
Toyota, Honda and other Japanese companies build and sell their products globally just as every other large automaker does including our own. The global profits go home to Japan and contribute to the bottom line and success of these automakers. Just as purchasing a Ford or GM car in the America, Europe or in China supports them here in the United States.
That shouldn't be a difficult concept to grasp.
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That One Person 10:18PM (7/09/2007)
Not surprising.
GM, Ford and Chrysler vs. how many companies? And more to supposedly sell vehicles here in the future. Like someone said, it was bound to happen.
I will be the first to say anything along these lines: But this has nothing to do with domestic products from the 80s and 90s. Too many players on the field...
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Tool 10:20PM (7/09/2007)
The Big 3 lost nearly six points of share in the past 12 months, which is an million unit swing to the so-called imports.
That is a huge loss that Detroit will probably never see again.
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gsolman6 11:23PM (7/09/2007)
A lot of that 6% loss is due to them getting away from rental fleets sales but still market share does matter. There are economies of scale that can work at certain levels but not at others. That is you can't have so many dozen varieties of the same pickup unless you have so many in sales.
A few years ago many at GM used to wear lapels with '29' on them indicating the market share they were after. Now what are they? low 20s?
vex 2:08AM (7/10/2007)
Chrysler actually had a small market percentage INCREASE last month, even though sales were down slightly.
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