Posted on: Wednesday, September 15, 2004

Market share for U.S. automakers at new low

By Earle Eldridge
USA Today

Market share for domestic automakers is below 60 percent this year through August, an all-time low.

General Motors, Ford Motor and Chrysler Group, which have been losing U.S. market share for 10 years, had a combined 58.8 percent share January through August, according to Autodata, down from 60.2 percent at the end of last year.

Market share for Asian automakers climbed to 34.6 percent through August, up from 32.6 percent at the end of 2003.

Market share is an important gauge of a company's strength, particularly its ability to withstand industry downturns. And supporting a company's infrastructure — employees, factories and suppliers — is dependent on a healthy market share and a predictable sales volume.

GM's market share was 27.2 percent for the January through August period, down from 27.7 percent a year ago, according to Autodata. Ford's share fell to 18.4 percent from 19.4 percent. Chrysler Group picked up a bit, to 13.2 percent from 13 percent.

Chrysler spokesman Kevin McCormick credits the new Chrysler 300 sedan, a big hit, with helping boost its market share.

Paul Ballew, executive director of GM's global market and industry analysis, says GM has lost share recently because several models are at the end of their life cycles.

"Market share is important, but it's not the only metric we track," Ballew says. "We have been able to stabilize our market share, but we also want to grow sales."

Domestic automakers also might be cutting back on sales to rental car fleets. Those sales have been used to boost market share. But they're less profitable because the automakers buy back the vehicles in four to 12 months and often are forced to resell them at a loss.

Ford sales analyst George Pipas says the automaker is reducing sales to daily rental fleets, even if it erodes share. "Market share is important to us, but our focus is on retail market share and building our business profitably."

The drop in market share comes as import automakers have encroached on truck segments Detroit has dominated: pickups, sport utility vehicles and minivans.

Japanese and European automakers began adding truck models in the late 1980s and early '90s. Since 1995, as their lineups have grown, Detroit's market share has dropped steadily from the 70 percent range.

Jeff Schuster, executive director of global forecasting for J.D. Power and Associates, expects Detroit's market share to settle at about 56 percent by 2010, because the imports will have completed their march into new segments.

He also expects the size of the new car market to grow to about 17.7 million annual sales by 2011, up from 16.6 million predicted for this year. That will allow automakers to increase sales volume despite a smaller market share.