Showroom sales buoy GM, DCX
In the last three months of 2006, GM and DaimlerChrysler gained 0.9 point and 0.3 point of market share, respectively, in sales to individual customers compared with the same quarter in 2005. Ford dropped 1.2 points in the fourth quarter.
For the full year, Detroit automakers lost market share to Toyota Motor Corp. and other Asian competitors in sales from dealer showrooms.
GM's market share fell 1.8 percentage points in 2006 to 22.3% of all U.S. retail sales. Ford lost 1.5 points of retail market share to fall to 15.4%. DaimlerChrysler dropped a half point to 13%.
Retail sales are significant because they provide a snapshot of customer demand for the companies' cars and trucks. The automakers report overall sales monthly, but these reports also include fleet sales to rental car companies, corporate customers and government agencies. Fleet sales can prop up volumes but often cut profits.
The fourth-quarter results show that Detroit automakers are trying to become less reliant on fleet sales, said Tom Libby, senior director of industry analysis for the Power Information Network.
"There is some sign of life in Detroit in retail," Libby said. "The fact that two out of the three increased retail sales is a positive sign, but they are not out of the woods. If you look at these numbers overall, the upward trend is with the Asians."
The share figures from the Power Information Network are estimates based on sales data collected directly from dealers, representing a quarter of all new-vehicle transactions in the United States.
GM and DaimlerChrysler confirmed that the Power Information Network retail figures match trends shown by their internal data. Ford declined to comment directly on the Power figures.
It's important to note that the fourth-quarter increases for GM and DaimlerChrysler are being compared with what was an unusually weak period of sales for those companies in 2005. Coming off a summer of brisk sales driven by widespread incentive programs, sales dropped in the final quarter of
2005, making it easier to show improvement in the fourth quarter of 2006.GM executives were vocal last year about their efforts to cut unprofitable fleet sales and focus on retail sales. "We've clearly stabilized retail share, and we're trying to show an improvement in it," GM spokesman John McDonald said.
But even as GM and DaimlerChrysler showed modest progress, Toyota posted the biggest gains in the U.S. retail market. It grabbed 2.5 points to end the year at 17.5% of U.S. retail sales, passing Ford for the first time for the No. 2 spot, behind GM. Honda Motor Co. increased its U.S. retail market share by a half-point to 10.9%.
In overall U.S. sales, retail and fleet, Toyota passed DaimlerChrysler for the No. 3 spot, behind GM and Ford.
The long-standing focus by Toyota and especially Honda on retail sales while avoiding heavy reliance on fleet sales has helped strengthen their brands, Libby said. The image and resale value of their vehicles are kept high because the market is not flooded with fleet models, he said.
"It all works together to help the model," Libby said. "Then you develop the position that the Camry and Accord have."
GM, Ford and DaimlerChrysler say they are working to decrease their dependence on fleet sales, particularly those to rental car companies.
Last year, GM cut sales to rental car companies by 75,000 vehicles and hopes to match or exceed that number of cuts in rental car sales in 2007, McDonald said.
At the same time, GM has new and redesigned vehicles to improve retail sales, he said. GM last year launched redesigned versions of the Tahoe, Yukon, Sierra and Silverado.
The all-new GMC Acadia and Saturn Outlook also were released late last year. A redesigned Chevy Malibu and Cadillac CTS are due this year.
"I think we've seen some good success along those lines in terms of retail market share," McDonald said. "As we introduce new products, hopefully we'll build on that."
New vehicles also helped the Chrysler Group late last year and should help in 2007, spokesman Markus Mainka said. A redesigned Chrysler Sebring, Jeep Wrangler and all-new Dodge Nitro were introduced last year.
"We've seen some momentum from those new products," Mainka said.
While declining to talk directly about the Power numbers, Ford spokesman George Pipas said Ford also concentrates on stopping the losses in retail sales.
Such new vehicles as the Ford Edge and Lincoln MKX should help in the retail arena, Pipas said. "We recognize that we have experienced declines in the retail market," he said. "Our goal going forward is to stabilize that position with new products."
Detroit automakers have shown they can be more competitive in the retail market, Libby said.
The challenge is to keep the retail sales going up for more than just a quarter or two, he said. To do that, automakers must keep a steady flow of redesigned and all-new vehicles that appeal to customers, he said.
"They've shown they can do it," Libby said. "But they cannot let models languish."
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