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Discussion Starter · #1 ·
Detroit share lags despite new models
July 3, 2004

New cars and trucks would abound. The economy would improve. And some foreign rivals would seriously struggle.

At the start of the year, Detroit automakers hoped this trio of trends would give them a real chance at increasing their collective share of the U.S. car and truck market. If it happened, it would be the first time since 1994.

Alas, after the first six months of 2004, Detroit's three automakers are unable to increase their share of the U.S. market. New products are coming out, but DaimlerChrysler's are the only ones creating a real buzz in the market. The forecasts for struggles by foreign rivals have been true, but mostly at Volkswagen and Mitsubishi, not bigger rival Toyota. The economy is recovering, but much more slowly than expected.

Detroit automakers' collective share of the market for new cars and trucks is down to 61.8 percent, compared with 63.4 percent for the first six months of 2003. These numbers include the foreign brands tied to the former Big Three, like Saab, Volvo and Mercedes-Benz.

DaimlerChrysler has done the best, holding steady at 14.7 percent of the U.S. market, exactly where it was for the first six months of 2003.

The Chrysler Group, the old Chrysler Corp. before its acquisition by Daimler-Benz, has been aided by a number of brand-new cars that have been popular with consumers, such as the Chrysler 300 and 300C. Chrysler also has remodeled its all-important SUV, the Dodge Durango.

General Motors Corp. and Ford Motor Co., however, are both down from a year ago.

"We, as a group, are trying to get this turned around, but it doesn't happen overnight. We are dealing with 30 years of history here," said George Pipas, Ford sales analysis manager. "The erosion of Big Three market share in cars goes back to the oil crisis of the early 1970s when the foreign automakers got a toehold into small cars. But, this could still be a turnaround year. Don't write it off yet."

General Motors, which many analysts thought had the best chance to improve share, is down to 27 percent this year, compared with 27.5 percent a year ago.

"Our sales have been a bit softer than expected. We were hoping for a bit more so far this year," said Paul Ballew, GM's executive director of industry and market analysis. "The car market is eroding faster than we thought. The whole midsized sedan market is declining much more rapidly than we expected."

In the first six months of 2004, Detroit automakers' sales slipped 0.5 percent while the rest of the industry was up 7 percent.

Back in January, amid the hoopla and optimism of the North American International Auto Show, many Detroit auto executives and auto analysts were bullish on the possibility that one or more of Detroit's automakers could increase share. All three would have a slew of new products like the Dodge Magnum, major redesigns of classics like the Ford Mustang or Chevrolet Corvette, or full years of recently redesigned products like the Ford F-150 and Chevy Malibu.

"Let me put it this way, if we don't gain market share this year, I will feel personally hurt," Bob Lutz, GM vice chairman, said at the show in an optimistic tone that was echoed in other quarters.

GM is awaiting its Chevy Cobalt, which replaces the Cavalier in the GM lineup. Also coming is the Pontiac G6, taking over for the Pontiac Grand Am.

The question is whether any of those new offerings will entice consumers. New products like the Malibu and Ford Freestar minivan have not hit anywhere near as well as those automakers had hoped.

"I think, for the Big Three, the second half will be a lot like the first half with no dramatic improvements," said Jessie Toprak, director of pricing and market analysis for, a vehicle-pricing Web site.

Another problem: They are trying to get away from the profit-eating incentives they have used since 9/11 to lure customers back into dealerships.

Full Article Here


· Premium Member
12,770 Posts
Discussion Starter · #23 ·
Quite honestly, though, managing GM's enormous product portfolio is truly a daunting task that I don't think anyone here could do better than the people in charge at GM, despite people's claimed clairvoyance.
Very well said. One way to fix this would be to merge more brands into single dealerships, and cut down individual brand models.

There should be no crossover between Buick, GMC, and Pontiac, which all band together generally around here. Buick doesn't really NEED its own version of the Envoy, for instance.

Buick-only dealerships should be phased out. The only stand alone dealerships now should be Chevy, HUMMER, and Saturn (which should be dumped if it doesn't improve). Pair Cadillac with Saab.

GM's "portfolio problems" could be drastically improved if it doesn't have upteen gagillion models in every brand that tries to cover every possible segment. If Saturn dealerships were forced to pair with HUMMER, for instance, we wouldn't need the eventual Saturn full size SUV's, and HUMMER could stay upmarket without offering the H 0.5, a rebadged Chevy Aveo with a HUMMER grlle. ;)

You can keep all of the brands, just cut the models and force them to play off of each other's strong points, with Chevy as the only brand that covers it all.

Toyota may have just added Scion, but I think they will wisely keep the brand tied to Toyota dealerships in the long run, and not start offering Scion minivans and full size SUVs. Toyota, with a heavy dose of marketing, is also offering cars it offers in its home market of Japan.

GM has plenty of product in Europe it could bring here, instead of recreating the wheel at Saturn, Chevy, etc. with their own versions of small cars.
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