Toyota Motor Corp., Volkswagen AG and other overseas-based automakers snared 51.9% of the market, besting the Detroit-based manufacturers, which suffered their worst share loss since 2001, according to DesRosiers Automotive Consultants. The situation was similar in the United States where non-American manufacturers claimed a 51.3% stake, Edmunds.com data showed.
General Motors Corp., Ford Motor Co. and Chrysler LLC have collectively lost ground to their rivals every year since 1996. But with less than half of dealership sales in their home market, analysts argue the industry has reached a tipping point in shifting consumer loyalties.
"My feeling is there’s been a change," said Richard Cooper, vice president of J.D. Power and Associates’ Canadian operations. "Not so much ‘Why should I go back to GM?’ for example. But I think a little bit more ‘Why shouldn’t I consider Toyota, Honda, Mazda, Volkswagen?’ In Canada we’re a little bit further down that curve" than the U.S.
The challenge of winning customers may grow deeper for GM in particular, which is set to lose one of its main competitive advantages against a key rival. Toyota is set to announce its own onboard navigation and telematics service to jockey with GM’s OnStar, which has more than 5 million subscribers in the U.S. and Canada.
The Japanese automaker’s Safety Connect and Lexus Enform systems will be available on select models beginning in the summer, according to information from non-Toyota sources. Like GM, Toyota will offer the service standard for one year on many new vehicles after which buyers will have to take out a subscription.
The perception that Detroit offers fewer fuel-sipping cars than its international rivals has played a role in the mindset change among buyers, Cooper said. So has simple confidence in the companies, he said.
GM and Chrysler won emergency aid from the U.S. and Canadian governments last month to avoid bankruptcy. Ford is in a better financial position, having tapped credit markets before they froze. The maker of F-Series pickup trucks estimates its U.S. market share at 14.6% in December, increasing it for the third straight month.
"It was more of an attitude that the Big Three were invincible," Cooper said. "Now I think some consumers see they’re not invincible. And I think that’s a different kind of world for a lot of American consumers."
Scotiabank Group forecasts auto sales in the U.S. will drop to 12 million units in 2009 after an average of 16.8 million units between 2003 and 2006. It predicts companies will sell 1.475 million vehicles in Canada this year.
"I don’t care how much money the governments in North America provide to Detroit. Until they can turn their market share losses around they will continue to be in trouble," industry analyst Dennis DesRosiers said in a note to clients. "[To] be losing market share in a declining market is a disaster scenario." (Tire Review/Akron)
