Lower vehicle sales predicted

Lower vehicle sales predicted http://www.freep.com/apps/pbcs.dll/article?AID=/20061214/BUSINESS01/612140303/1014
General Motors Corp. and Ford Motor Co. likely will lose U.S. market share
again next year while DaimlerChrysler AG and Toyota Motor Corp. are expected to post gains, according to forecasts released Wednesday by CSM Worldwide.
CSM, a Northville-based research firm, expects a tough year in the U.S. auto market. It projects 2007 sales of 16.2 million autos, which would be a nine-year low and less than the expected 16.4 million this year.
Vehicles are lasting longer, said Joseph Barker, CSM senior manager for global sales forecasts. Following several years of low financing rates and substantial rebates, many consumers also bought cars and trucks when they could get a good deal, he said.
"The pent-up demand has, in part, been depleted by the incentives we have seen over the last three or four years," Barker said.
With a shrinking market, CSM expects Ford's U.S. market share to slip the most, 1.3 points to 18.2% in 2007. GM's U.S. market share is expected to fall 1.2 points to 23.5%.
The loss in market share, though, is not all bad news, Barker said. GM and Ford are taking steps that focus on profitability instead of just sales, he said.
With the Taurus discontinued earlier this year, Ford will take a hit in fleet sales, which pump up volumes but often hurt resale values and profits.
The loss of the Taurus alone could cost Ford one point in U.S. market share, said George Pipas, Ford's sales analysis manager. Ford is willing to lose these sales as it rebuilds its U.S. business, he said.
"We can begin to talk about growth when we get our business profitable," Pipas said.
GM's losses will come as it backs off incentives, which have cut into profits, Barker said. GM also is introducing a set of promising new vehicles, such as the GMC Acadia, Saturn Outlook and Buick Enclave.
"General Motors is making decisions today that will have a positive impact on their business in the future," Barker said. "But in the short term, these decisions are going to have a negative impact on market share."
GM does not comment on market share projections, but the company is focused on reducing low-profit sales, said GM spokesman John McDonald.
CSM expects DaimlerChrysler to increase its U.S. market share half a point to 14.7% in 2007 as new models reach the market.
The Chrysler Group has introduced several new products in the second half of this year, including a redesigned Chrysler Sebring. The Jeep Patriot, a new vehicle, is being released this month.
The Chrysler Group also does not comment on market share projections. "What we're trying to do more than anything is have a good cadence of fresh products in the marketplace," said Chrysler Group spokesman Kevin McCormick.
CSM expects Toyota to gain the most of any automaker, improving U.S. market share one point to 16.3% in 2007.
Toyota will benefit from a full year of sales for a redesigned Camry and RAV4, both introduced earlier this year, Barker said. They also have more redesigned vehicles, such as the Tundra and two new Scions, coming next year. "We think the momentum Toyota has will carry over into next year and into 2008," Barker said.
2007 auto share projections
a.. CSM Worldwide, a metro Detroit research firm, released Wednesday its projections for U.S. market share in 2007.
U.S. market: 16.2 million light vehicles in 2007, down from 16.4 million in 2006.
GM: Down 1.2 points to 23.5%.
Ford: Down 1.3 points to 18.2%.
Toyota: Up 1 point to 16.3%.
DaimlerChrysler: Up 0.5 point to 14.7%.
Honda: Up 0.2 point to 9.3%.
Nissan: Up 0.1 point to 6.4%.
Hyundai: Up 0.7 point to 5.3%.
Source: CSM Worldwide
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