GM, Ford and Chrysler all lost market share in July.
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The three big US carmakers witnessed a significant fall in domestic sales in July, with Ford and General Motors suffering particularly. While this in itself is a concern, the fact that Japanese and European rivals increased their sales makes the big three’s position look even worse.
America’s largest car makers, General Motors, Ford and Chrysler, continued the trend of declining sales with an accelerating fall in July. Compared to the same month a year ago, GM sales fell 11%, Ford posted an 11.5% decline, and Chrysler saw a 7% decrease. Sales of GM trucks and sport utility vehicles (SUVs) – generally the most profitable models – fell only 1%.
These losses came despite continuing price reductions and incentive schemes. GM spent nearly $US4,000 per vehicle in an effort to increase sales and reduce its inventories. The double blow of falling prices and volumes has seen Ford report a Q2 decline in profits of 27%, whilst DaimlerChrysler lost $1.1 billion over the same period.
Equally worrying for the big three will be the news that many rival firms increased sales over the month, with Japanese and luxury marques performing particularly well. Nissan sales increased 5.9%, buoyed by the new Murano SUV, while Subaru sales were up 8.8%. Toyota is expected to post a similar result – making it no wonder that the credit rating agency Standard and Poors has just upgraded the company’s rating to the highest AAA score. Toyota is the only Japanese company currently enjoying this status.
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By GlobalDataBoth BMW and Mercedes Benz posted a 10% increase in sales, while Ford’s Premier Automotive Group (PAG) consisting of Jaguar, Land Rover, Aston Martin and Volvo also performed strongly.
The Japanese manufacturers are performing well despite the maintenance of their pricing structures, as they have resisted the temptation to follow the big three with incentives and discounts. Surveys such as JD Power’s satisfaction report only add to the credibility and desirability of Japanese products, which consistently top the polls for reliability.
