Detroit auto makers General Motors Corp. and Ford Motor Co. lost more market share in December, and industry executives are warning that a softening housing market, higher interest rates and continuing volatility in energy prices could put a damper on U.S. auto demand this year.
Mark Fields, Ford's executive vice president and head of the Americas, said yesterday that he expects U.S. sales in 2006 "probably won't outshine" 2005. Other industry executives said they expect sales in 2006 to be roughly flat compared with 2005. In December the pace of light-vehicle sales fell to a seasonally adjusted annual pace of 17.17 million vehicles from a 17.94 million-vehicle pace last December.
Paul Ballew, GM's executive director of market and industry analysis, said he expected 2006 to largely reflect the sales performance of 2005. He said although GM sales were down 10% in December, GM was happy with its results, considering GM had a record sales month in December 2004.
While domestic auto makers predicted a flat year for 2006, Toyota Motor Corp. predicted growth in the auto market. Jim Lentz, a group vice president at Toyota, said he expected the Japanese auto maker would increase sales by 5% in 2006, on top of a 10% increase for 2005. Toyota's market share was 13.7% in December, compared with 12.2% last year. The Japanese auto maker is preparing to open more North American factories as it shoots for a 15% share of the U.S. market.
A slow- or no-growth year for U.S. auto demand promises to intensify the industry's market-share wars, and increase pressure on GM and Ford to take stronger medicine to reverse losses in their high-cost North American operations. GM has outlined plans to shed 30,000 jobs, mostly through attrition, by 2008. Ford says it will detail its downsizing plans Jan. 23.
Even as Detroit's auto makers face changes to their old-line businesses, tradition dies hard. GM yesterday trumpeted its Chevrolet brand's dethroning of Ford as the No. 1 selling brand in the U.S., the first time Chevy has won the top spot since 1986. It was an echo of the old Detroit, where Ford and Chevy defined competition in the mass market.
GM's U.S. market share declined in December to 25.9%, compared with 27.8% last year. Ford's market share was 17.9%, compared with 19% last year. DaimlerChrysler AG's Chrysler Group continued to outperform its crosstown rivals, reporting a 2.3% decline in sales that allowed it to hold 14.9% of the market in December, up from 14.6% a year ago.
Mr. Fields said the debate in the U.S. auto industry should no longer be about the Big Three. "It makes for great headlines...but it's the wrong debate," he said. "The real focus should be the up-for-grabs Big Six — the battle among six huge North American, European and Asian companies for growth and profits in the North American market."
December's sales results highlighted a significant and continuing shift in American consumers' tastes that battered GM and Ford's profits, and poses continued risks going forward. Sales of so-called traditional sport-utility vehicles, or SUVs, built on frames similar to pickup trucks, fell sharply in December, continuing a downward trend of the past three years. Rising in the place of truck-based SUVs are so called crossovers, which are derived from passenger-car chassis.
Car makers expect sales of crossovers to outpace sales of traditional SUVs for the first time in 2006. They predict that passenger cars will continue to do well in 2006, as demand for large SUVs remains flat or declines.
While GM, Ford and Chrysler have plans to field more crossovers, analysts say these models are unlikely to return the kind of profits that truck-based SUVs generated at their peak.
The shift away from large SUVs in 2005 presents an immediate challenge for GM, which is gearing up to launch officially next week a redesigned lineup of large truck-based SUVs. These SUVs, code-named GMT-900, are central to GM Chairman and Chief Executive Officer Rick Wagoner's near-term strategy for reversing GM's North American losses, which have totaled $4.8 billion through the first nine months of 2005.
GM could use the SUVs to launch a new pricing strategy, aimed at avoiding a repeat of last year's summer-clearance sale, when GM offered vehicles at employee-discount prices. The offer created a sales surge followed by several months of depressed demand.
GM offered a new round of incentives.
Incentives for some 2006 models, such as full-size SUVs, offer as much as $5,500 cash back until Tuesday. For some 2005 models, rebates for as much as $8,000 are offered until Jan. 31.
Mark LaNeve, head of GM's sales and marketing, says one of the ways it hopes to beat its competition is to undercut its competitors in sticker prices.
"Our argument to the American public is our cars are just as good if not better and you're paying more for Japanese products," Mr. LaNeve says.
Gordon Stewart, head of the Harper Woods, Mich., Stewart Management Group that has three Chevy dealerships, said the public has only recently become aware of GM's coming SUVs so he hasn't yet heard of a lot of demand for those vehicles. He is optimistic for 2006, predicting sales will increase about 5% because of the product launches.
—Lee Hawkins Jr. and Norihiko Shirouzu contributed to this article.
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Retail U.S. Car and Light Truck Sales-a
December 2005 December 2004 %Chg. 2005 2004 To Date To Date General Motors 384,620 428,724 -10.3 4,454,386 4,655,459 Domestic Car 124,633 148,944 -16.3 1,628,068 1,767,181 Import Car 6,480 13,240 -51.1 115,746 108,370 Total Car 131,113 162,184 -19.2 1,743,814 1,875,551 Domestic Trk 253,507 266,540 -4.9 2,710,572 2,779,908 Import Trk ... ... ... ... ... Total Trk 253,507 266,540 -4.9 2,710,572 2,779,908 SAAB-b 2,766 3,421 -19.1 38,343 38,159 Import Car 2,300 3,421 -32.8 36,071 38,159 Domestic Trk 466 ... ... 2,272 ... Ford 266,126 292,851 -9.1 3,153,670 3,319,484 Domestic Car 71,502 73,653 -2.9 934,832 888,633 Import Car 6,927 9,571 -27.6 104,275 129,963 Total Car 78,429 83,224 -5.8 1,039,107 1,018,596 Domestic Trk 176,155 198,050 -11.1 2,018,365 2,210,086 Import Trk 11,542 11,577 -0.3 96,198 90,802 Total Trk 187,697 209,627 -10.5 2,114,563 2,300,888 Jaguar-b 2,445 3,417 -28.4 30,424 45,875 Volvo-b 9,111 12,236 -25.5 123,874 139,384 Import Car 4,482 6,154 -27.2 73,851 84,088 Import Trk 4,629 6,082 -23.9 50,023 55,296 Land Rover-b 6,913 5,495 25.8 46,175 35,506 DaimlerChrysler 220,676 225,937 -2.3 2,529,322 2,427,810 Domestic Car 33,367 36,965 -9.7 494,306 443,154 Import Car 24,389 25,295 -3.6 197,902 209,583 Domestic Trk 162,798 163,504 -0.4 1,835,780 1,773,582 Import Trk 122 173 -29.5 1,334 1,491 Mercedes 31,227 26,657 17.1 224,489 221,786 Import Car 23,335 24,026 -2.9 183,237 194,614 Domestic Trk 7,770 2,458 216.1 39,918 25,681 Import Trk 122 173 -29.5 1,334 1,491 Toyota 203,279 187,932 8.2 2,260,296 2,060,049 Domestic Car 63,097 61,747 2.2 828,987 753,900 Import Car 43,656 34,755 25.6 460,369 347,321 Total Car 106,753 96,502 10.6 1,289,356 1,101,221 Domestic Trk 52,487 49,999 5.0 564,113 544,000 Import Trk 44,039 41,431 6.3 406,827 414,828 Total Trk 96,526 91,430 5.6 970,940 958,828 Honda 132,800 137,381 -3.3 1,462,472 1,394,398 Domestic Car 57,298 66,466 -13.8 692,309 705,643 Import Car 9,608 13,153 -27.0 145,513 137,646 Total Car 66,906 79,619 -16.0 837,822 843,289 Domestic Trk 52,015 42,351 22.8 474,431 401,828 Import Trk 13,879 15,411 -9.9 150,219 149,281 Total Trk 65,894 57,762 14.1 624,650 551,109 Nissan 91,253 92,268 -1.1 1,076,670 985,989 Domestic Car 31,665 35,037 -9.6 450,285 419,163 Import Car 11,003 9,592 14.7 122,180 117,594 Total Car 42,668 44,629 -4.4 572,465 536,757 Domestic Trk 37,761 36,197 4.3 401,770 330,065 Import Trk 10,824 11,442 -5.4 102,435 119,167 Total Trk 48,585 47,639 2.0 504,205 449,232 Volkswagen 34,798 29,119 19.5 307,261 334,028 Domestic Car 16,841 11,293 49.1 152,161 149,047 Import Car 15,604 15,094 3.4 137,050 157,066 Total Car 32,445 26,387 23.0 289,211 306,113 Import Trk 2,353 2,732 -13.9 18,050 27,915 Audi-b 8,842 7,650 15.6 83,066 77,917 Mazda 19,156 20,866 -8.2 258,339 263,882 Domestic Car 4,770 7,007 -31.9 71,449 72,163 Import Car 8,878 7,457 19.1 121,862 115,515 Total Car 13,648 14,464 -5.6 193,311 187,678 Domestic Trk 2,906 4,731 -38.6 42,633 51,344 Import Trk 2,602 1,671 55.7 22,395 24,860 Total Trk 5,508 6,402 -14.0 65,028 76,204 Mitsubishi 9,673 11,151 -13.3 123,995 161,609 Domestic Car 4,527 4,855 -6.8 58,463 62,852 Import Car 1,636 2,566 -36.2 28,009 46,085 Total Car 6,163 7,421 -17.0 86,472 108,937 Domestic Trk 2,720 1,781 52.7 22,139 22,433 Import Trk 790 1,949 -59.5 15,384 30,239 Total Trk 3,510 3,730 -5.9 37,523 52,672 Subaru 19,919 19,324 3.1 196,002 187,402 Domestic Car 8,377 9,415 -11.0 87,788 89,454 Import Car 3,165 2,749 15.1 33,637 32,209 Total Car 11,542 12,164 -5.1 121,425 121,663 Domestic Trk 3,171 592 435.6 21,036 7,316 Import Trk 5,206 6,568 -20.7 53,541 58,423 Total Trk 8,377 7,160 17.0 74,577 65,739 Hyundai-b 43,021 37,148 15.8 455,012 418,615 Import Car 34,349 23,963 43.3 325,958 300,094 Domestic Car ... ... ... ... ... Total Car 34,349 23,963 43.3 325,958 300,094 Import Trk 8,672 13,185 -34.2 129,054 118,521 Kia-b 18,767 20,108 -6.7 275,851 270,055 Import Car 9,255 11,949 -22.5 146,395 155,908 Import Trk 9,512 8,159 16.6 129,456 114,147 Isuzu 839 1,680 -50.1 12,177 27,188 Domestic Trk 839 1,678 -50.0 12,173 27,170 Import Trk ... 2 -100.0 4 18 Suzuki 6,662 5,221 27.6 82,101 73,946 Import Car 3,796 3,355 13.1 57,772 47,109 Total Car 3,796 3,355 13.1 57,772 47,109 Domestic Trk 1 186 -99.5 233 3,476 Import Trk 2,865 1,680 70.5 24,096 23,361 Total Trk 2,866 1,866 53.6 24,329 26,837 Porsche-b 2,861 2,695 6.2 31,933 31,471 Import Car 1,436 922 55.7 18,326 13,355 Import Trk 1,425 1,773 -19.6 13,607 18,116 BMW 28,900 29,292 -1.3 307,020 296,111 Domestic Car 414 537 -22.9 10,045 13,654 Import Car 22,532 22,035 2.3 228,608 212,628 Domestic Trk 3,598 4,597 -21.7 37,598 35,225 Import Trk 2,356 2,123 11.0 30,769 34,604 Mini-b 2,436 3,810 -36.1 40,820 36,032 Total Cars 619,205 651,615 -5.0 7,652,295 7,495,290 Domestic Car 416,491 455,919 -8.6 5,408,693 5,364,844 Import Car 202,714 195,696 3.6 2,243,602 2,130,446 Total Trucks 864,145 890,082 -2.9 9,334,212 9,412,206 Domestic Trk 747,958 770,206 -2.9 8,140,843 8,186,433 Import Trk 116,187 119,876 -3.1 1,193,369 1,225,773 Total Vehicle 1,484,160 1,542,686 -3.8 16,993,886 16,912,748
DSR - Daily Selling Rate. Percent change calculation based on numeric comparison, not adjusted for selling days in period. For the most recent period, there were 27 selling days and in the year earlier period 27 selling days. a - Domestic vehicles are those built in the U.S., Canada and Mexico for sale in the U. S. b - Imported cars only. c - Imported trucks only. d-Estimated Source: Autodata Corp., Woodcliff Lake, N.J.
Percentage of Total U.S. Car Market-a
YTD YTD Make DEC 2005 DEC 2004 2005 2004 General Motors 25.9 27.8 26.2 27.5 Ford 17.9 19.0 18.6 19.6 DaimlerChrysler 14.9 14.6 14.9 14.4 Toyota 13.7 12.2 13.3 12.2 Honda 8.9 8.9 8.6 8.2 Nissan 6.1 6.0 6.3 5.8 Mazda 1.3 1.4 1.5 1.6 Mitsubishi 0.7 0.7 0.7 1.0 Subaru 1.3 1.3 1.2 1.1 Hyundai 2.9 2.4 2.7 2.5 Suzuki 0.4 0.3 0.5 0.4 Big Three 55.2 58.1 56.9 58.7 Total Jpn. Nameplate 32.6 30.8 32.2 30.5 Total Kor. Nameplate 4.2 3.7 4.3 4.1 Total Eur. Nameplate 8.0 7.3 6.5 6.8
a - Domestic vehicles are those built in the U.S., Canada and Mexico for sale in the U. S.
Source: Autodata Corp., Woodcliff Lake, N.J.
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