Americans turning away from Big-3

For the first time, more American car buyers are choosing foreign-based automobile brands over the traditional domestic brands of Big-3 automakers Ford, DaimlerChrysler and General Motors, new research shows. From January to May of this year, 52.9% of new vehicles registered by buyers with US state licensing authorities were import brands, auto consultancy R.L. Polk & Co. found in research released yesterday. During the same period last year, it was 49%. One leading automotive journal said the research would deliver "a psychological blow" to the Detroit-based Big-3 automakers. But others say it simply confirms a trend that has been building for years. In Canada, foreign brands overtook Big-3 domestic brands in retail sales three years ago, according to DesRosiers Automotive Consultants.

Lonnie Miller, Polk's director of industry analysis, cautioned the domestic brands could still hold more than 50% of US retail market share by the time 2006 ends. But it's clear the gains made by foreign brands are showing up. "An American would prefer to buy an American-branded product," said George Peterson, president of AutoPacific, a market research firm in Tustin, CA. "But many of them feel like they've been burned so badly in the past by poor quality or poor service that they would not even consider an American car any more." Rising gas prices have also played a part as consumers dump bigger SUVs and trucks for more fuel-efficient vehicles. Ford, which depends heavily on profits from its SUVs and F-Series trucks, reported an unexpected second-quarter loss last week of US$123-million. The company said it failed to predict the extent of the shift in consumer buying. Despite the drop in truck sales, Ford is sticking with its target of selling 900,000 F-Series large pickups in the US market this year. "It's still our goal," Ford sales analyst George Pipas said yesterday. "We have our eyes wide open in regard to demand for full-size pickup trucks in the US." F-Series US sales fell 1.9% to 400,177 in this year's first half, including a decline of 8.2% in the second quarter. Consumers shifted to cars from light trucks such as pickups and sport-utility vehicles as US average retail gasoline prices rose as high as US$2.95 a gallon in the period. F-Series sales are "more heavily weighted in the second half of the year," which is why the annual target can still be met, Pipas said.
(National Post, Globe and Mail 060725)