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NINETY EIGHT REGENCY

Big 3's auto sales reign nears end

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Big 3's auto sales reign nears end

By Sharon Silke Carty, USA TODAY

DETROIT — In the coming months, the Big 3 automakers' share of the U.S. market will fall below half for the first time.

That may seem like ominous news, but it reflects a sea change in how the troubled automakers are selling cars and trucks in the USA. Instead of inflating their market shares by offering non-stop fire-sale prices and pumping massive numbers of vehicles into unprofitable rental fleets, the domestic automakers are scaling back and focusing on making a profit.

That strategy produced a domestic market share of 50.2% in June, down from a high of 81% in April 1984 and 56.1% last June, according to research firm Autodata. Industry analysts predict it will only get worse, settling somewhere in the mid-40% range, perhaps within months.

"From a historical perspective, the psychological impact of the domestics losing dominance in their own land is pretty significant," says Jesse Toprak, director of pricing and market analysis for website Edmunds.com. But it shows a "renewed emphasis on profitability. They are not blindly going after market share."

General Motors (GM), Ford (F) and Chrysler (DCX) have used varying strategies to increase sales and market split. After the Sept. 11 terrorist attacks, steep rebates topping $5,000 per vehicle were common. Consumers caught on, timing their vehicle purchases to coincide with the best rebates. Auto sales charts looked like rollercoaster tracks, the dips marking the times when the domestic carmakers tried backing off from discounting.

Pumping up rental fleets has also been common. Toprak says Ford and Chrysler still sell more than 30% of their overall volume into fleets, despite cutting back on those sales, and GM is down to about 25%. That compares with Toyota ™ and Honda (HMC), which sell less than 10% of their vehicles into rental fleets. Sales to rental fleets are usually heavily discounted and hurt resale values when those worn-out rental cars get dumped into the used car market.

The automakers have realized that "market share is nice, but profits are absolutely essential," says David Cole, chairman of the Center for Automotive Research.

He predicts the automakers will eventually control about 40% of the market. "Until they get their costs in line with the competition, you will continue to see their market share shrink."

Controlling a dwindling piece of the pie will make it harder to turn these companies around, says Kevin Tynan, an analyst at Argus Research. So far, the automakers have been successful at trimming manufacturing costs.

"It makes it much more difficult to pull off a restructuring when your revenue line continues to retract," Tynan says.

source:

http://www.usatoday.com/money/autos/2007-0...ets-share_N.htm

Edited by NINETY EIGHT REGENCY
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This kind of stuff just makes my heart drop. It saddens me to think that SO many Americans care less about our great heritage, and more importantly, these same Americans seem forget about the people that have and still do bring us THE BEST cars and trucks made anywhere.

Add to that the increase in our national deficit and one wonders if the new motto of America should be, "It's all about me".

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...one wonders if the new motto of America should be, "It's all about me".

Too late.

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Nice try. Although many media outlets are ready to pop the champagne corks, they are conveniently leaving out one tiny fact: in 1984, 10.4 million cars were sold, of which Detroit held 76%, right?

Weren't sales last year over 17 million? What is half of that? Oh, right - ABOUT THE SAME FRIGGIN AMOUNT OF CARS!!!

No doubt these kinds of stories sell newspapers, but for GAWD's sake, when Mr. & Mrs. Idunnoadamnthingaboutcars read these kinds of articles, what would you suppose they are going to think? Certainly not that GM and Ford are selling about the same number of vehicles that they did 25 years ago. TThey couldn't know that because nobody wants to report that!

Legacy costs, Japanese trade practices and the fact that every manufacturer on Earth has decided North America is the Garden of Eden - those are the issues that matter, but those issues are not sexy, are they?

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Nice try. Although many media outlets are ready to pop the champagne corks, they are conveniently leaving out one tiny fact: in 1984, 10.4 million cars were sold, of which Detroit held 76%, right?

Weren't sales last year over 17 million? What is half of that? Oh, right - ABOUT THE SAME FRIGGIN AMOUNT OF CARS!!!

No doubt these kinds of stories sell newspapers, but for GAWD's sake, when Mr. & Mrs. Idunnoadamnthingaboutcars read these kinds of articles, what would you suppose they are going to think? Certainly not that GM and Ford are selling about the same number of vehicles that they did 25 years ago. TThey couldn't know that because nobody wants to report that!

Legacy costs, Japanese trade practices and the fact that every manufacturer on Earth has decided North America is the Garden of Eden - those are the issues that matter, but those issues are not sexy, are they?

Worse yet, they think, better not buy an American car, from all the reports I've read, they may be going out of business soon!

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This kind of stuff just makes my heart drop. It saddens me to think that SO many Americans care less about our great heritage, and more importantly, these same Americans seem forget about the people that have and still do bring us THE BEST cars and trucks made anywhere.

Add to that the increase in our national deficit and one wonders if the new motto of America should be, "It's all about me".

Define "THE BEST".
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Define "THE BEST".

Seriously.

While I hate to say it, I find even my 8 year old BMW, while it may be expensive to maintain, is a better all around vehicle than any car available from GM today. I wouldn't say it is bias at all. I love GM, and I only wish the best for them. I hope to some day get the f@#k out of my German POS (no matter how much I love it) and move into a GM car (I would move into a nice truck or vette...hell, even GTO at any time, btw.) but I just don't find many of them appealing or even close to the standards of my car (other than from a maintenance standpoint of course...) Sure, they have many great cars out right now, and many more which are about to come out, but I just feel they could do much better. GM has so much potential that it sickens me when I don't see it put to good use.

As far as sales number goes...Screw that. I know what I want. Sales numbers wouldn't change that for me. (I'd never buy a brand new car anyway.) I'd never buy a Toyota, and the only JDM make I'd consider would be some certain models from Nissan/Infiniti, and Subaru. Otherwise, I'm all for GM, and until BMW starts making good looking cars again, the same goes for them.

I apologize for the rant right now...I'm a bit drunk to say the least... :P

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Worse yet, they think, better not buy an American car, from all the reports I've read, they may be going out of business soon!

Exactly. Self-fulfilling prophecy. Chrysler faced that dilemma in 1980 when they teetered on the edge of bankrupcty. I remember my parents were shopping for a new van at the time and my step-father (who was a died in the wool Ford man anyway) being shy about considering the Dodge van because of the bankruptcy rumours. I worked for an Auto Parts dealer at the time and (at my mother's bequest), I asked around about who made the best, most reliable van. The general consensus was the Dodge van. Chrysler really kind of rule the shag-carpeting-CB-radio era of vans. My parents bought a Ford anyway.

"BEST" is such a fluid, dynamic term. It means many things to different people. For me, Best is a good looking vehicle, reliable, navigates our $h!ty streets well (road isolation), good gas mileage, amazing stereo. Speed, power, performance, WOW factor mean nothing to me. I am 46. I have done the Wow. Right now, the Impala or the Dodge Magnum are probably the two best vehicles for my tastes.

As anyone who has haunted these pages knows, I would NEVER buy any "foreign" vehicle. NEVER. Not even used. Sure, I have seen some cool looking ones, but to me they are a major cop-out, betrayal to our future. I still care about our future.

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Nice try. Although many media outlets are ready to pop the champagne corks, they are conveniently leaving out one tiny fact: in 1984, 10.4 million cars were sold, of which Detroit held 76%, right?

Weren't sales last year over 17 million? What is half of that? Oh, right - ABOUT THE SAME FRIGGIN AMOUNT OF CARS!!!

Ding! Ding! Ding! We have a winner! :banghead::hissyfit:

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Add to that the increase in our national deficit and one wonders if the new motto of America should be, "It's all about me".

That's been my motto for twenty years.. got to look out for #1.

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Seriously.

While I hate to say it, I find even my 8 year old BMW, while it may be expensive to maintain, is a better all around vehicle than any car available from GM today.

Speaking of E39s, a friend of mine at my old job had his ('03) totalled last week...some woman (on a cell phone, of course) went left of center on a busy 4-lane street in an Avalon, hit his bimmer head-on. The insurance company is trying to low ball him on the value (the car was mint, 530, sport package, black on black w/ manual, low mileage).

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Speaking of E39s, a friend of mine at my old job had his ('03) totalled last week...some woman (on a cell phone, of course) went left of center on a busy 4-lane street in an Avalon, hit his bimmer head-on. The insurance company is trying to low ball him on the value (the car was mint, 530, sport package, black on black w/ manual, low mileage).

Ouch, that sucks...I hope your buddy is ok...Shame about his car. Sounded like a nice one too. 530 5-speeds aren't that easy to come by, and with black on black, low miles (and the sport pack which came on all manual e39's standard I believe), it would've been a very desirable ride. How much is insurance giving him?
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Ding! Ding! Ding! We have a winner! :banghead::hissyfit:

Sure, the absolute units haven't changed. However the domestics have a much smaller portion of the pie. If they had maintained their market share they would be selling ~13 million of the 17 million vehicles. Apparently they only sold 8.5 million. Yes, that is as many vehicles as they sold 1/4 of a century ago. But at the same time the market has grown 65%. That is hardly a glowing talking point.

In this case, talking about absolute numbers is just putting lipstick on a pig.

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Sure, the absolute units haven't changed. However the domestics have a much smaller portion of the pie. If they had maintained their market share they would be selling ~13 million of the 17 million vehicles. Apparently they only sold 8.5 million. Yes, that is as many vehicles as they sold 1/4 of a century ago. But at the same time the market has grown 65%. That is hardly a glowing talking point.

In this case, talking about absolute numbers is just putting lipstick on a pig.

You can put a negative spin on anything, can't you? The near monopoly that GM had on the market 40 years ago could not be maintained. It was just an alignment of the moon and stars that put GM in the right place at the right time after WWII. After a while, natural intertia had to take over. IMO, it was inevitable. Just as it is inevitable that Toyota, too, will fall. I had an interesting discussion with a couple of the service advisors at our dealer today and some of the comments they had about the "fires" over at our sister Toyota store were very telling.

Frankly, being #1 does not necessarily guarantee being the best. Just look at the pop charts! Arguably, Chrysler has produced more interesting vehicles in the past 35 years or so, as it has lurched from crisis to crisis just to stay in the game. Perhaps GM became more concerned in defending its #1 position than actually keeping its eyes on the ball.

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