U.S. Automakers Intro Vehicles To Deny Offshore Competition

DETROIT January 6, 2004; John Porretto writing for the AP reported that the big question after Detroit automakers rolled out their latest cars and trucks at the North American International Auto Show is whether they'll improve sales enough to stem a sliding U.S. market share that fell to a collective all-time low in 2003.

Among several analysts, the early answer is probably not, though they expect General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group to at least slow the rate of decline over the next year.

"At the end of the day, it's going to be really tough to gain market share," Mike Wall, an analyst for the forecasting firm CSM Worldwide, said after touring the show Tuesday. "GM might be able to eek out a gain, but for Ford and Chrysler, it's more a matter of slowing the decline. That's probably going to be the measure of the year."

GM, Ford and Chrysler will add dozens of new cars and trucks to their lineups in 2004 -- the most in recent memory -- giving them the best posture in years to take on overseas rivals at home.

Hurt by increasing foreign competition, Big Three market share fell to 60.2 percent in the United States last year, down from 61.7 percent in 2002 and 70-plus percent 10 years ago.

The thrust of the Detroit exhibition, at least among the Big Three, was the revival of the passenger car, which they've neglected in recent years to focus on higher-profit pickups and SUVs. Ford has gone so far as to call 2004 "The Year of the Car."

Toyota Motor Corp. on Monday established itself as the best-selling car brand in the United States last year, surpassing Ford and Chevrolet for the first time.

But as the Big Three enhance their car portfolios, foreign automakers such as Toyota, Honda Motor Co. and Nissan Motor Co. are beefing up their lineups with new pickups and SUVs, the primary source of profits in Detroit.

Toyota and Honda, coming off record years for U.S. sales, both unveiled concept versions of new pickups in Detroit. Among the top six automakers in the United States, Honda is the only one without a pickup. Analysts expect Honda to begin selling one next year.

Nissan, which last month began building its first full-size pickup, the Titan, continued to assert itself in the truck market this week, unveiling its new Frontier pickup and Pathfinder sport utility vehicle. The Frontier is a smaller version of the 2004 Titan.

Nissan chief executive Carlos Ghosn said Tuesday he expects the automaker's U.S. sales to rise at least 10 percent this year after climbing 7.4 percent in 2003.

Nissan was one of nine foreign automakers that boosted U.S. market share in 2003. At the top, Toyota went from 10.4 percent in 2002 to 11.2 percent last year, Honda from 7.4 percent to 8.1 percent and Nissan from 4.4 percent to 4.8 percent.

Meanwhile, GM, Ford and Chrysler all lost ground. GM, the world's largest automaker, now has 28 percent of the U.S. market, followed by Ford at 19.5 percent and Chrysler at 12.8 percent.

In a recent research note, Fitch Ratings said the success of the collective focus on cars at GM, Ford and Chrysler "is an open question."

"Clearly, the Big Three have made strides in product quality and efficiency over the past several years, and whether this, combined with any attractive styling, benefits the car portfolio remains to be seen," analysts Mark Oline and Christopher Struve said in the report. "Failure to halt the slide in cars could lead to revamped strategies and further downsizings."

Wall said each of the Big Three has at least one new car that could provide a surge in volume. He's particularly bullish on Chrysler's new 300C sedan, the brand's flagship car; Pontiac's new G6 sedan, the Grand Am replacement; and the newest version of the Ford Mustang.

"GM has the more robust product pipeline so they probably have more wiggle room to have some misses with their hits," he said.

After a visit to the show, Prudential Equity Group analyst Michael Bruynesteyn said his favorite models were Honda's pickup concept, the Pontiac G6, the Ford 500 sedan and Chrysler's revamped minivans.

"The pipeline of product is thickening for GM as it moves into 2004 and 2005, which we think will help keep incentives under control and stabilize market share," he said.

Bruynesteyn said he also liked some of the new offerings from Ford and Chrysler, but he doesn't expect either to reverse their market share declines this year.