2007 May Be The 1st Year Fewer Than 50% of Americans Buy U.S. Vehicles

Discussion in 'OT Driven' started by TriShield, Apr 16, 2007.

  1. TriShield

    TriShield Super Moderator® Super Moderator

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    American automaker's retail market share falls

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    BY SARAH A. WEBSTER
    FREE PRESS BUSINESS WRITER
    April 14, 2007

    Despite a good start to the year by General Motors Corp., fewer than half of American consumers -- 48.9% -- bought new cars and trucks in the first quarter this year from Detroit automakers, according to retail sales data provided exclusively to the Free Press by the Power Information Network.

    Retail sales are purchases made directly by consumers in showrooms, and they exclude fleet sales to rental car companies, businesses and governments, which are typically sold in bulk at a discount.

    Industry experts view retail sales, which represent about three-fourths of the industry's 17 million sales, as one of the best measures of market demand and the future financial performance of automakers, because they are generally more profitable sales.

    The new low point in Detroit's share of the retail market is the result of a long-term consumer move away from their brands that seems to have picked up speed since September, fueled by a housing market slowdown, high oil prices and shaken consumer confidence.

    While GM had the strongest quarter among metro Detroit automakers, Ford Motor Co. and DaimlerChrysler AG lost important retail market share to foreign competitors -- led by Toyota Motor Corp., which managed to drop its incentives to below $1,000 per vehicle on average and still snap up a substantial number of new customers.

    To be sure, this is not the first time that Detroit automakers have dipped below the 50% mark in retail sales. But if the trend continues, this might be the first full year that non-U.S. automakers take the majority of the U.S. auto market.

    "I think, in the near term, both Chrysler and Ford will continue to lose share, and that aggregate loss will more than offset any possible gain by GM," said Tom Libby, senior director of industry analysis at PIN, a subsidiary of J.D. Power and Associates.

    "I don't expect the domestics' share to move back up above 50% this year."

    Still, the performance of GM shows arguable improvement. The world's largest automaker is stabilizing its retail performance, despite slashing its cash-back rebates and other discounts by an average of $500 per vehicle.

    Automakers don't typically provide detailed information to the public on their retail sales, so PIN compiles estimates with sales information collected from more than 7,000 dealerships, which represent one-fourth of all retail sales.

    Mark LaNeve, vice president of sales, service and marketing for GM North America, said GM's performance is better than the PIN estimate suggests. LaNeve said retail sales at GM were up half a percentage point in the first quarter. That performance, he said, likely will translate to a nearly flat retail market share because industry-wide retail sales are up an estimated 0.7%.

    "We know our numbers for a fact," LaNeve said. "It was the first quarterly increase we've had in probably 18 months or so, and we think we held our own in a pretty tough market."

    Although the numbers at Ford and Chrysler weren't nearly as encouraging, they're not giving up.

    "It's still very early in the calendar year," Steven Landry, vice president of sales and field operations for the Auburn Hills-based Chrysler Group, said in an interview Thursday. "I think it's presumptuous to think that, as a group, we may finish below 50%."

    Downward trend

    Although Detroit could make a comeback, the domestic retail sales performance has been consistently on the decline for some time.

    In 2005, Detroit's automakers had 54.5% of the retail market. By the end of last year, that had edged down to 50.1%.

    Now, Detroit is down to 48.9%. That's a 1.2-percentage-point decline from the fourth quarter of 2006, and it's an even larger 2.1-percentage-point decline from the first quarter of last year.

    These declines, measured to the tenths of a percentage point, might not seem like much. But each point of retail share keeps about one half of an assembly plant running.

    Libby said even a half of a percentage point is considered an admirable gain in today's marketplace and a full percentage point is like "a huge mountain."

    And Detroit, despite its best efforts, continues to lose mountains.

    Behind the power shift

    Ultimately, sales trends at just two automakers -- Toyota and Ford -- explain most of the power shift this year.

    While most of the major automakers gained or lost a half percentage point of market share or less, Ford lost a full 1.1 percentage points and Toyota gained 1 percentage point.

    Those numbers reveal just how tough the situation has become at Ford.


    That's because the Dearborn-based automaker simultaneously increased its incentives, such as cash-back rebates and other discounts, by 44.6% or $1,342 per vehicle, during the period, to an average of $4,350 per vehicle, according to Autodata Corp. of Woodcliff Lake, N.J. Usually, big discounts such as those encourage consumers to shop and buy more. George Pipas, Ford's top sales analyst, said that Ford's declines, if they continue, could have implications for the company's turnaround plans, which already have called for shuttering 16 plants and eliminating 44,000 jobs.

    "We know that one of the key assumptions in the Way Forward plan is to stabilize our retail market share," he said. "If we don't, then we maybe haven't gone far enough on our cost reduction."

    That said, Ford's retail market share numbers provided by PIN include all of the company's six major brands, such as Jaguar, Land Rover and Volvo, all of which have posted sales declines this year. But the company's Way Forward plan is based primarily on Ford's domestic Ford, Mercury and Lincoln brands.

    Pipas said the number for those three brands has held steady at about 13% of U.S. sales. So that would support Ford Chief Executive Officer Alan Mulally's recent comments to reporters at the New York auto show last week that "we are stabilizing our market share."

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  2. GregFarz78

    GregFarz78 New Member

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    maybe this will get good for me...cars sitting on the lot a long time are easier to haggle :cool:
     
  3. TriShield

    TriShield Super Moderator® Super Moderator

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    Look through the dealer ads in the paper. If you live near a big metro area you'll find them giving away all sorts of new cars.
     
  4. Urinal Mint

    Urinal Mint bourbon afficionado

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    "only one at the price!" will be hidden in the fine print somewhere :mamoru2:

     
  5. whomadewho

    whomadewho Ohhh FCN Ohhhhh FCN!

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    wowzer... americans are getting smarter?
     
  6. crux

    crux sup

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    im surprised this hasn't happened earlier
     
  7. TriShield

    TriShield Super Moderator® Super Moderator

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    That's true too. :mamoru:
     
  8. D_Nice

    D_Nice Super-Moderator Super Moderator

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    :werd:

    "I'm sorry but we no longer have stock of that model, but we do have the lower trim level for only $5000 more."
     
  9. NavS

    NavS its me!

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    Why doesn't domestic all get together and put something good out for a change? Two heads are better than one?
     
  10. Tony Stark

    Tony Stark John McCain has an illegitimate mexican baby

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    about damn time, hopefully when domestics realize people don't want butt ugly cars wtih shitty quality they'll come out with something good for a change
     
  11. borborygmus

    borborygmus Guest

    I like reading your threads because you bold the important parts :love:
     
  12. Urinal Mint

    Urinal Mint bourbon afficionado

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    Gross.

     
  13. DefBringer

    DefBringer Ronnie, if I don't do this, *that's* when I'm goin

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    The last time I bought a domestic was in 1988.
     
  14. TriShield

    TriShield Super Moderator® Super Moderator

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    We buy that shit from Toyota now.

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    lol
     
  15. My first car was a Chrysler New Yorker (K Car). It drove me to never buy domestic again. From there I bought Nissans and Hondas. They never gave me any problems. However most recently I thought I'd give Chevy a try. I bought a 2006 Impala. It's bland just like the toyota. A better ride and came with a v6. I bought it for 15k. While I like the car. It is buggy as hell. Software seems to drive most of the parts on this car and it acts like it has glitches. Sometimes when I lock the doors the car will honk. Sometimes it doesnt. Same with using the turn signals. The heat stopped working (because of software). The car hasn't left me stuck on the road but its just strange things about the car. This is all on a car with less than 14k miles.
     
  16. PATH2NOWHERE

    PATH2NOWHERE New Member

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    hehe my future car ..... :o SE trim tho' :)
     
  17. RaginBajin

    RaginBajin Have you punched a donkey today?

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    Just like everyone says, build a car that gets good mileage, doesn't look like a total bag of ass and that doesn't fall apart at 36,000 miles and people will start buying them. Until US makers do that, people will be leaving. I'm looking into getting a new car sometime soon and for the first time ever, it will be non-American.
     
  18. Josepi

    Josepi HA HA, I CHANGED MY AV

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    Domestic asthetics SUCKS.
     
  19. Vivid

    Vivid OT Supporter

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    hmm wonder why?

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    When the big 3 start building cars that do not just appeal to 70 year olds, they will get a better customer base.
     
  20. CJPA

    CJPA New Member

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    I still find it hard to comprehend the number of vehicles purchased by this country in a given year...wow
     
  21. 6SpeedTA95

    6SpeedTA95 OT Supporter

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    :rofl: the least you could have done was post a pic of a car from a company who was continuing down the shitter.

    GM has made and is continuing to make significant strides in improving their vehicles.
     
  22. TriShield

    TriShield Super Moderator® Super Moderator

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  23. Vivid

    Vivid OT Supporter

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    In 10 years, the only car GM will offer is the Escalade and the Corvette.
     
  24. marcu5

    marcu5 not worry friend. i do not grudge.

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    ibchallenger
     
  25. TriShield

    TriShield Super Moderator® Super Moderator

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    oh hi
     

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