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May 2008: Asian Carmakers Reach Primacy In U.S. Market

HONG KONG June 4, 2008; Shu-Ching Jean Chen writing for Forbes.Comreported that in May 2008, U.S. carmakers have relinquished primacy ofposition on their own home turf to Asian rivals for the first time. In aseismic shift in the automotive industry, consumers are voting with theirwallets for the smaller, more fuel-efficient vehicles that Asianmanufacturers have excelled at producing.

The combined U.S. market share of Detroit"s Big Three--General Motors,Ford Motor and Chrysler--slumped to a record low of 44.4%, compared with47.8% for Asian automakers collectively. Japanese automobile producers bythemselves seized a record share of the U.S. market, 42.5%, according todata for the month of May from Autodata Corp.

The eye-opening development took place amid a seventh straight month ofdecline in the U.S. automobile market, with overall sales losing 10.7% year onyear, to 1,396,965 vehicles. The U.S. carmakers" combined market share hasbeen below the 50% mark for three consecutive months.

Longtime industry leader General Motors for the first time found itsmarket share shrinking to less than 20%, at 19.1%. Its sales plummeted by27.6%, to 266,744; its lead over Toyota Motor has narrowed to less than10,000 vehicles. GM"s pain was shared by its two smaller American rivals:Ford"s May sales dropped 15.6%, to 205,270 units, and Chrysler suffered a25.4% fall, to 148,747 units.

Although the leading Asian automaker in the United States, Toyota, alsoreported a drop in its May sales, attributable to slowing sales of pickuptrucks, it was a far gentler dip of 4.3%, to 257,404 units, enabling it tonarrow the gap with General Motors. Toyota currently has a market share of18.4%. The combined Asian share in the world’s largest market wasbolstered by the impressive increases in May sales other Asian carmakersachieved, led by Honda (up 15.6%), Subaru, Kia (9.0%), Nissan(8.4%) andHyundai (5.8).

The growth for Honda Motor was most astounding. It not only pushed itsmarket share to 12%, the fourth-largest, by selling 167,997 units in May, amonthly record; its Civic also displaced the long reign--since 1991--of theFord F-Series pickup truck as the best-selling vehicle in the nation.

Not just the Civic but three other Asian-made models, Toyota"s Camry andCorolla and the Honda Accord, outsold the Ford F-Series pickup truck inMay. Passenger cars accounted for 57% of all vehicle sales in May, asagainst slightly less than 50% a year ago.

In order to stem the slide in its sales, particularly of the oversizedcars that Americans had long loved to drive, until gasoline pricesapproached $4 a gallon, General Motors accelerated its push towardfuel-thrifty smaller cars. On Tuesday, it announced the shutdown of fourtruck and SUV plants in North America.