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

HONG KONG June 4, 2008; Shu-Ching Jean Chen writing for Forbes.Com reported that in May 2008, U.S. carmakers have relinquished primacy of position on their own home turf to Asian rivals for the first time. In a seismic shift in the automotive industry, consumers are voting with their wallets for the smaller, more fuel-efficient vehicles that Asian manufacturers 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 with 47.8% for Asian automakers collectively. Japanese car producers by themselves seized a record share of the U.S. market, 42.5%, according to data for the month of May from Autodata Corp.

The eye-opening development took place amid a seventh straight month of decline in the U.S. car market, with overall sales losing 10.7% year on year, to 1,396,965 vehicles. The U.S. carmakers' combined market share has been below the 50% mark for three consecutive months.

Longtime industry leader General Motors for the first time found its market share shrinking to less than 20%, at 19.1%. Its sales plummeted by 27.6%, to 266,744; its lead over Toyota Motor has narrowed to less than 10,000 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 a 25.4% fall, to 148,747 units.

Although the leading Asian automaker in the United States, Toyota, also reported a drop in its May sales, attributable to slowing sales of pickup trucks, it was a far gentler dip of 4.3%, to 257,404 units, enabling it to narrow the gap with General Motors. Toyota currently has a market share of 18.4%. The combined Asian share in the world’s largest market was bolstered by the impressive increases in May sales other Asian carmakers achieved, led by Honda (up 15.6%), Subaru, Kia (9.0%), Nissan(8.4%) and Hyundai (5.8).

The growth for Honda Motor was most astounding. It not only pushed its market share to 12%, the fourth-largest, by selling 167,997 units in May, a monthly record; its Civic also displaced the long reign--since 1991--of the Ford 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 and Corolla and the Honda Accord, outsold the Ford F-Series pickup truck in May. Passenger cars accounted for 57% of all vehicle sales in May, as against slightly less than 50% a year ago.

In order to stem the slide in its sales, particularly of the oversized cars that Americans had long loved to drive, until gasoline prices approached $4 a gallon, General Motors accelerated its push toward fuel-thrifty smaller cars. On Tuesday, it announced the shutdown of four truck and SUV plants in North America.