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Ford, Honda likely to lead future rise in market share

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Ford, Honda likely to lead future rise in market share

Industry report says GM to stay same, Chrysler to decline



Ford and Honda are expected to lead the industry in market-share gains over the next four years while General Motors will hold its ground and Chrysler will slip, according to a closely watched report.

Honda and Ford will each gain 2 points of market share by 2013 because both manufacturers are expected to introduce new or redesigned cars and trucks faster than the industry, according to estimates from the Bank of America Merrill Lynch annual "Car Wars" report.

"Ford's recent gains should continue, with share reaching the 17% to 18% range, supported by a solid product cadence," automotive analyst John Murphy said in the report.

GM will hang onto its current market share of 18% to 19%, Murphy said.

Murphy argues that automakers that introduce new and redesigned cars and trucks faster than competitors can boost sales, keep their factories busier and post bigger profits. But staying ahead is getting harder.

On average, the industry replaced about 13% of its volume each year between 1992 and 2010, Murphy said. But over the next four years, that replacement rate is expected to reach 27%.

While Chrysler is expected to improve its replacement rate from 14% to 24%,the company still lags behind the industry. Chrysler's share is expected to drop 2 points to 6.9%.

"Chrysler products are likely to have a tough time in a competitive market,," Murphy said.

In the past, the replacement rates of all domestic automakers lagged Asian rivals.

"We have moved from the worst in average age in the 'Car Wars' study to among the best over the past three years," Derrick Kuzak, Ford's group vice president, global product development said in an internal Ford publication .

Murphy also expects the recent rapid market-share gains by Hyundai and Kia to slow down. The report predicts no market share change between 2009 and 2013 for Korean automakers. "This is largely due to a replacement rate of 27%, which is in line with the industry average," Murphy said.



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