Yesterday marked the release of February light vehicle sales figures and the results again showed a loss of market share among the 'Big 3' U.S. automakers, particularly to Japanese carmakers. Ford and DaimlerChrysler reported declines in sales, 13% and 7.7% respectively, versus a year ago's sales. Reversing its own downward trend, GM said its sales rose 3.4% from the year earlier period.
This news combined with Ford's press release that restructuring would cost $11 billion makes that company very suspect. GMs increase is good news, but I still have a problem with a bullish perspective for that company.
All three of Japan's 'Big 3' reported YoY sales increases, paced by Toyota at 12%, while Honda (3.2%) and Nissan (1.2%) also registered gains.
It looks as though the US consumer is clearly moving toward Japanese cars in a big way. I am guessing some of this has to do with fuel efficiency. However, the Japanese car makers also have lines of trucks and SUVs, so there are probably other factors in these numbers.
Despite an industry-wide YoY sales drop of 0.5%, the seasonally adjusted annual sales rate held steady at 16.6 million; Bloomberg consensus estimates were for an annual rate of 16.1 million sales.
Right now car makers are competing for the same size economic market -- at least on a seasonally adjusted basis. With US GDP growth slowing, I have to wonder how long that will last.
The total market share of the U.S. 'Big 3' fell to 54% from 56.6% in February 2006. GM managed to increase its market share 1% to 24.6% total. Asian automakers up their share from 37% to 39.4%.
There's been a slow war of attrition going on between Japan and Detroit for the better part of 25 years. Japan obviously has a better long-term strategy at this point -- largely because they have a long-term strategy.
3 comments:
I'm in the car business as a corporate leasing executive. Ford is in free fall. They are closing all their Dealer Development points, and closing factories mid year to shuffle production, aleniating customers in the process. Dealers are selling 10-15-20 new cars a month. Here in Chicago Ford/LM storese are closing and more are to come. It's the worst I've seen in the 30 years I've been in the business.
Got a 95 camry 4 cylinder last week, great car. Japan really knows how to build them.
Detroit and Japan have been fighting a cold war for years, and like Russia, Ford is crumbling from within and signs are just now beginning to show. But also, like Russia, I think Ford and Detroit are in much worse shape then we think. I have a position in F, but its a gamble. I hope they move fast enough to right the ship or somebody comes to buy them out. But at this point, what would they get, the brand, thats about it. Don't get me started on quality cars, v. sexy marketing. Its painful. BUt can a company like Ford actually go out of business or declare BQ?
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