U.S. automakers U.S. automakers losing ground


Published: Sunday, January 8, 2006 at 6:01 a.m.
Last Modified: Sunday, January 8, 2006 at 12:00 a.m.
The auto industry finished 2005 in a familiar pattern, with U.S. market share continuing to slip from U.S. automakers to their Asian competitors. Japanese automakers reported the year's biggest sales gains.
Combined U.S. market share for General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group fell to an unprecedented low of 56.9 percent, down from 61.7 percent three years ago, according to Autodata Corp. At the same time, Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and other Asian brands saw their U.S. market share climb to 36.5 percent from 34.6 percent in 2002.
There were some bright spots. Chevrolet was the best-selling brand in the U.S. market in 2005, outpacing Ford for the first time in 19 years, GM said Wednesday.
Paul Ballew, GM's executive director of market and industry analysis, said the year-end totals were below the company's expectations. But he said the win for Chevrolet gives the world's largest automaker a critical boost. GM lost nearly $4 billion in the first nine months of 2005 as it struggled with high costs and falling U.S. market share.
"It does confirm our ability to produce industry-leading vehicles," Ballew said.
Chrysler Group also saw its sales rise 5 percent for the year thanks to hot-selling models like the Chrysler 300 sedan and the Town & Country minivan, which both saw increases of more than 25 percent for the year.
But overall, the Big Three U.S. automakers' sales were down 2 percent, while Asian brands' sales climbed 7 percent and European brands fell 3 percent. The total number of vehicles sold in the United States was nearly 17 million, about equal to the number sold the year before.
U.S. automakers also reported disappointing results for December despite a new round of holiday discounts. GM's December sales were down 10 percent, Ford fell 8.7 percent and Chrysler was down 5 percent as payback from strong summer sales continued. Ballew said last year's strong December made it a particularly difficult comparison.
Asian automakers fared better in December, in part because they didn't offer employee discounts over the summer. Toyota's December sales were up 8 percent, while Hyundai's were up nearly 16 percent as customers snapped up the 2006 Sonata. Honda's December sales were off 3 percent while Nissan's were off 1 percent.
Toyota, Nissan and South Korean automaker Hyundai Motor Co. all reported sales increases of 9 percent or more for the year. Toyota, whose U.S. sales were up 10 percent over 2004, said its Camry sedan was the best-selling car in the United States for the fourth year in a row, while its Lexus nameplate was the best-selling luxury brand.
Jim Press, president and chief operating officer of Toyota Motor Sales USA Inc., said hybrid sales helped propel Toyota's growth. Sales of the hybrid Toyota Prius doubled in 2005.
"Heightened interest in fuel costs and the environment and dependence on foreign oil really stimulated that interest in hybrids," Press said.
Honda Motor Co. also reported an increase of 5 percent over 2004 sales. Honda's car sales were flat but the automaker's truck and SUV sales rose nearly 14 percent, largely on the strength of the Honda Pilot small SUV and Honda's new Ridgeline pickup. Honda said it was the company's 12th consecutive year of U.S. sales increases.
GM's sales fell 4 percent for the year, led by a 7 percent decline in car sales and a 2 percent decline in sales of trucks and sport utility vehicles. Although Chevrolet sales slipped slightly from last year to 2.6 million, they outpaced Ford by around 21,000 vehicles thanks to strong pickup sales and enthusiasm for GM's new HHR crossover.
Ford said its sales dropped 4 percent in 2005 as consumer demand for trucks and sport utility vehicles fell in the face of high gas prices. Ford's U.S. sales analysis manager George Pipas predicted SUV sales will stabilize in the coming year as long as gas prices remain lower than $3 a gallon.
"This is still a big segment, this is still a popular segment that meets the needs of many consumers," he said. "The wild card is gas prices."
But Pipas also said there is a definite consumer trend away from SUVs in favor of cars and crossovers, which are car-based SUVs. Ford, the nation's second biggest automaker after GM, said car sales rose 5 percent for its Ford, Lincoln and Mercury brands, but truck and SUV sales fell 8 percent. Pipas said it was the first year since 1981 that cars gained market share against trucks.
Ford also said sales of its crossover vehicles rose 28 percent. The company predicted crossover sales will continue to outpace all other categories through the end of the decade.
It was a tumultuous year for automakers, who enjoyed near-record sales thanks to employee-pricing discounts over the summer but watched large SUV sales plummet when gas prices spiked after Hurricane Katrina. The bankruptcy filing of Delphi Corp., the largest U.S. auto supplier, also shook the industry.
Automakers expressed optimism about 2006. Press said cars are more affordable than ever. Ballew also said the economy is expanding just as new vehicles are hitting the pipeline.
"It's not the perfect backdrop because energy prices are higher than people anticipated, but the overall backdrop for this industry is not that poor," Ballew said.
Sales figures were adjusted for the number of sales days. There were 307 sales days in 2005 and 308 sales days in 2004.

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