Three Way Tie: Automotive Leadership in the U.S.

By John Zajac

The mantle of leadership in the U.S. auto market is very much up for grabs.  The sales results from March clearly demonstrate how much the situation is in flux.  The “Big Three” for March, at a corporate level, according to Automotive News were:

  • General Motors, with 188,011 sales
  • Toyota Motor Sales, with 186,863 sales
  • Ford Motor, with 183,425 sales

In a market that sold a whisker over 1,000,000 vehicles in March, these results show these companies within a bumper’s length in a race around the U.S. auto market track.  While these three vie for the lead, American Honda trailed at 108,262 sales, Nissan was at 95,468, Chrysler fell to 92,623 and up and coming Hyundai-Kai checked in with 77,524.

While Ford had a slight lead over GM in February sales, each month has its own character.  In this case, March is characterized by a 41% jump in Toyota sales, as that embattled company provided strong incentives to lure back its formerly loyal buyers into their showrooms.  GM has to be watched carefully, as their press releases trumpet an over 40% improvement in the sales of surviving brands of Chevy, Cadillac, Buick and GMC.  Overall, though, jettisoning both strong and weak brands yielded just a 21% overall GM corporate year over year improvement, a bit better than the 16% overall market improvement.  Ford, while fading from the lead from February, was still 40% better than March 2009.  I may not be a mathematics genius, but if GM keeps improving sales at a 20% clip, and if Ford improves by 40% every month, Ford may be seeing GM in its rear view mirror well before the year is out.

Analysts predict that Toyota will relax their incentives soon, as rebates and coupons largely cheapen the brand, reduce resale values, and reduce profits.  40% year over year improvements will probably not carry forward.  GM has been more aggressive in matching Toyota’s rebates, making their sales improvement a little disappointing.  Given that GM announced a post bankruptcy $4.3 billion loss, despite the benefits of debt restructuring, lowered labor costs, and the help of the Obama administrations best business minds, GM’s engine seems to have developed a bit of a miss.  Ford, on the other hand, has managed to eke out a small profit for 2009, and has seen strong sales gains despite that its new product blitz has not yet hit our shores.  Frankly, 40% gains every month may not be sustainable, given production constraints and the still fragile economy, but as new Fiestas and Focuses arrive, Ford may benefit from its business leadership tailwind more than GM or Toyota despite the new products expected (mainly Buicks and Chevy’s from GM).

The story not being pursued quite yet is the tale of how Steven Rattner and Ron Bloom pulled the plug on Chrysler’s developing alliance with Nissan-Renault and gave the operation of the company over to Sergio Marchionne.  The attentive reader might have already added up Chrysler’s 92,623 sales with Nissan’s 95,468 and realized the total was a healthy 188,091, enough to have “won” the March sales crown.  Instead of charging to the lead of the American market, we have Nissan-Renault trying to sort out a much more modest agreement with Daimler this past week, mainly centering on developing a four seat Smart product.

Read more on John’s blog

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