Auto industry
Auto industry hits bumpy road

USA Today

The U.S. auto industry's predictable patterns have given way to upheaval in the past year.

The turmoil means that you should be open-minded if you're a shopper, wary if you're an investor, nervous if you're an auto executive — and delighted if you're merely a spectator because the auto industry's again good sport to watch.

Consider:

General Motors has halted its market-share slide, boosted quality scores, improved productivity and made headway on earnings. GM's new models are considered exciting and innovative.

Ford, threatening to overtake No. 1 GM in sales a year ago, has lost nearly 2 percentage points of market share, been beset by vehicle-quality problems and had two high-profile recalls involving potentially faulty Firestone tires on its popular Explorer sport utility vehicle.

Ford's fighting to regain momentum and again threaten GM's lead. GM's hoping its new truck models and aggressive marketing amount to a concrete anchor for foundering Ford.

But there's a big shadow over that fight, cast by Japan's Big Three — Toyota, Honda and Nissan. Already riding high in the car market, they now are scoring success after success in light trucks — pickups, minivans and sport utility vehicles — where Detroit has made its profits recently.

The Japanese trio is opening more factories in the United States and expanding others, mainly to build trucks, while Detroit has cut, even halted, production to avoid a glut of unsold vehicles.

"The Japanese new-product threat is not serious," warns Merrill Lynch auto analyst John Casesa, "it's worse than that."