"Big 3" Lose Ground to Asian firms

[bigpoppanils]

Big Three Auto Makers Lose Ground to Foreign Firms

Source: The Atlanta Journal and Constitution

Publication date: 2003-09-04

Arrival time: 2003-09-03

Sep. 4--The incentives game continues to play out in auto showrooms, but the lure appears to be weakening -- at least for America's Big Three.

August sales figures released Wednesday show all three domestic auto giants -- Ford Motor Co., General Motors Corp. and the Chrysler Group arm of DaimlerChrysler AG -- lost ground compared with the same month last year.

Even so, auto analysts expect the deals to keep on coming.

"The Japanese products are selling themselves, and the domestics are playing more and more games trying to attract buyers," said Jeannine Fallon, a spokeswoman at Edmunds.com, an online automotive research firm. "Incentives are here to stay."

Dearborn, Mich.-based Ford, which operates a huge plant in Hapeville, experienced the biggest decline, its sales falling 15 percent to 311,084 vehicles from 365,406 in the same period last year.

Chrysler Group's sales fell 6 percent, while GM's slipped half a percent.

Their Japanese and Korean rivals, however, posted healthy-to-record increases.

"It's not as good (for domestics) as a year ago," said Sophia Koropeckyj, a senior economist at Economy.com. "But a year ago, they had extraordinarily good incentives."

Indeed, Ford's sales in August 2002 were a record for that month, and Chrysler's sales of 210,855 represented the second-best August sales month in the automaker's history.

So, the automakers say, it would be difficult to sustain those record demand levels. "When new buyers walk into a showroom, they're looking for a deal," said David Elshoff, a spokesman for Auburn Hills, Mich.-based Chrysler.

Though the company reported a loss of $1.1 billion in the second quarter in part because of incentives, it's still offering rebates on some of its 2003 models.

The deals will continue into the 2004 model year.

On Wednesday, Detroit-based GM joined Chrysler in offering zero-percent and low-interest financing or cash-back deals on some 2004 models until the end of the month. The world's largest automaker, which fueled the incentives craze following the 9/11 terrorist attacks, also said it will offer deals on some 2003 vehicles until Jan. 2.

Ford also is offering deals on some 2003 and 2004 models.

"I don't think it's permanent fixture, but it's a short-term fixture," said Chrysler's Elshoff.

Analysts don't see it that way, however.

"None of the Big Three is going to take the risk of stopping incentives," Economy.com's Koropeckyj said, noting that the domestic automakers' U.S. market share has fallen to 61 percent from 75 percent in the late 1990s.

"They can't afford to stop. If they do, they'll be killed by the (imports)."

America's appetite for "made in Japan" -- or, at least, made in America under Japanese leadership -- could explain why Toyota Motor Corp. reported its best U.S. sales in 46 years. The automaker sold 200,482 vehicles in August, an increase of 11.4 percent compared with the same period last year. Honda Motor Co. said it set an all-time record for sales in any month, selling 147,253 cars and trucks in August, breaking the record set last August by about 10,000. Its luxury Acura brand also broke sales records for the month.

"What's most important is that we've broken our sales records with practically no incentive spending," said Dick Colliver, executive vice president of Honda's U.S. operations. "This clearly demonstrates that our focus on the brand, the products and the customer -- not the deal -- is resonating with consumers."

© 2003, The Atlanta Journal-Constitution. Distributed by Knight Ridder/Tribune Business News.

there was an article an Bloomberg last night that said that Toyota actually outsold chrysler for the first time. i cant seem to find that article anywhere now...

[cintron]

hooray for low federal interest rates.

hooray for japanese quality and meticulous attention to detail.

maybe when Ford, GM and Chrysler stop making cheap rental cars and build something with soul and excitement [and sound engineering], then perhaps they'll do better.

till then hmmm. Lemme see. Chrysler 300M or Infiniti G35.

yeah that's a toughie

[joeg]

Originally posted by cintron

hooray for low federal interest rates.

hooray for japanese quality and meticulous attention to detail.

maybe when Ford, GM and Chrysler stop making cheap rental cars and build something with soul and excitement [and sound engineering], then perhaps they'll do better.

till then hmmm. Lemme see. Chrysler 300M or Infiniti G35.

yeah that's a toughie

:laugh: yeah seriously...

even at ground level, i'd much rather have a civic than a 'pontiac sunfire' or an accord over a ford taurus... shits a fucking joke...