U.S. automakers see sales drop in 2005 as Asian rivals advance

Thursday, January 5th 2006, 8:45 am
By: News On 6

DETROIT (AP) _ The auto industry finished 2005 in a familiar pattern, with U.S. market share continuing to slip from U.S. automakers to their Asian competitors. Japanese automakers reported the year's biggest sales gains.

Combined U.S. market share for General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group fell to an unprecedented low of 56.9 percent, down from 61.7 percent three years ago, according to Autodata Corp. Meanwhile, Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and other Asian brands saw their U.S. market share climb to 36.5 percent from 34.6 percent in 2002.

It was a tumultuous year for U.S. automakers, who enjoyed near-record sales thanks to employee-pricing discounts over the summer but watched large SUV sales plummet when gas prices spiked after Hurricane Katrina. The bankruptcy filing of Delphi Corp., the largest U.S. auto supplier, also shook the industry.

There were bright spots for some. Chevrolet was the best-selling brand in the U.S. market in 2005, outpacing Ford for the first time in 19 years, GM said Wednesday.

Paul Ballew, GM's executive director of market and industry analysis, said the win for Chevrolet gives the world's largest automaker a critical boost. GM lost nearly $4 billion in the first nine months of 2005 amid high costs and falling U.S. market share.

``It does confirm our ability to produce industry-leading vehicles,'' Ballew said.

Chrysler Group also saw its sales rise 5 percent for the year thanks to hot-selling models like the Chrysler 300 sedan and the Town & Country minivan, which both saw increases of more than 25 percent for the year.

But overall, the Big Three U.S. automakers' sales were down 2 percent, while Asian brands' sales climbed 7 percent and European brands fell 3 percent. The total number of vehicles sold in the United States was nearly 17 million, about equal to 2004's total.

U.S. automakers also reported disappointing results for December despite holiday discounts. GM's December sales were down 10 percent, Ford fell 8.7 percent and Chrysler was down 5 percent.

Asian automakers fared better in December, in part because they didn't offer employee discounts over the summer. Toyota's December sales were up 8 percent, while Hyundai's were up nearly 16 percent as customers snapped up the 2006 Sonata. Honda's sales were off 3 percent and Nissan's were off 1 percent.

Toyota, Nissan and South Korean automaker Hyundai Motor Co. all reported sales increases of 9 percent or more for the year. Toyota said its Camry sedan was the best-selling car in the United States for the fourth year in a row, while its Lexus nameplate was the best-selling luxury brand.

Jim Press, president and chief operating officer of Toyota Motor Sales USA Inc., said hybrid sales helped propel Toyota's growth. Sales of the hybrid Toyota Prius doubled in 2005.

Honda Motor Co. reported an increase of 5 percent over 2004 sales. Honda's car sales were flat but the automaker's truck and SUV sales rose nearly 14 percent, largely on the strength of the Honda Pilot small SUV and Honda's new Ridgeline pickup.

GM's sales fell 4 percent for the year, led by a 7 percent decline in car sales and a 2 percent decline in sales of trucks and sport utility vehicles. Although Chevrolet sales slipped slightly from last year to 2.6 million, they outpaced Ford by around 21,000 vehicles thanks to strong pickup sales and enthusiasm for GM's new HHR crossover.

Ford said its sales dropped 4 percent in 2005 as consumer demand for trucks and sport utility vehicles fell in the face of high gas prices. Ford's U.S. sales analysis manager George Pipas predicted SUV sales will stabilize in the coming year as long as gas prices remain lower than $3 a gallon.

``This is still a big segment, this is still a popular segment that meets the needs of many consumers,'' he said. ``The wild card is gas prices.''

But Pipas also said there is a definite consumer trend away from SUVs in favor of cars and crossovers, which are car-based SUVs. Ford, the nation's second biggest automaker after GM, said car sales rose 5 percent for its Ford, Lincoln and Mercury brands, but truck and SUV sales fell 8 percent. Pipas said it was the first year since 1981 that cars gained market share against trucks.

Ford also said sales of its crossover vehicles rose 28 percent. The company predicted crossover sales will continue to outpace all other categories through the end of the decade.

Automakers expressed optimism about 2006. Toyota's Press said cars are more affordable than ever. GM's Ballew also said the economy is expanding just as new vehicles are hitting the pipeline.

``It's not the perfect backdrop because energy prices are higher than people anticipated, but the overall backdrop for this industry is not that poor,'' Ballew said.