The Detroit Three gained U.S. share in August for the sixth-straight month, benefiting from fresh lineups and Japanese automakers’ inventory woes. But Japanese competitors are preparing to fight back.
August sales were up 7.5% year-over-year. But sales increased a stronger 11.1% at Ford, 18% at General Motors and 30.6% at Chrysler, helping the Detroit Three end the month with 49% of U.S. auto sales, a 4.5-percentage-point gain.
Nissan has also gained at the expense of its in-country rivals. It posted a 19.2% gain last month and its market share has improved 0.2 points through August, compared with a combined four-point share loss from Toyota and Honda, which registered sales declines of 12.7% and 24.3%, respectively, in August.
Toyota expects to start growing dealer stocks this month, and Honda is kicking off months of overtime. Nissan already has its inventory back to normal levels.
The increased production at Toyota and Honda will take weeks to make a noticeable dent at dealership lots, so the Detroit Three share will likely stay strong until the start of 2012, said Jesse Toprak, an analyst with vehicle pricing site TrueCar.com.
Still, he said, Chrysler, GM and Ford have used the months since March’s production-disrupting Japanese earthquake and tsunami to convert longtime Asian buyers. For instance, GM insists the momentum it’s gained with the Chevrolet Cruze, August’s fifth-best-selling vehicle in the U.S., will put it on Japanese buyers’ shopping lists this fall.
“Part of what might be perceived as marketing spin from the domestics has some truth to it this time around,” Toprak said. “Their product is the best it’s ever been.”
While August sales were up, economic worries kept the pace of sales from recovering to levels from earlier in the year. Sales finished last month at a 12.1-million seasonally adjusted annual rate, according to Autodata. That’s less than the 12.5–million pace from January through July.
Still, after more than three years of sales below previously normal rates around 16 million, auto executives said they believed consumers would continue to trickle back into the market this year. They maintained their predictions for sales in the 12.5-million-to-12.8-million range this year, up from 11.6 million in 2010.
“The economy is expanding at a slower pace,” Ford economist Jenny Lin said. She pointed to President Barack Obama’s jobs-related speech next week as a source of hope for the auto industry. “If the government tries and shows some leadership … as long as it is stimulating the overall economy, I think that will be helpful for overall auto sales.”
In August, Chrysler’s sales gain led the Detroit Three, after it took longer than GM and Ford to recover from its restructuring and recession-era sales woes. The company’s 30.6% gain helped Chrysler outsell Toyota for the third month this year and register its best August since 2007.
Ford’s sales increased 11.1%, riding the recent momentum of its long-struggling Lincoln brand, which improved 24.5% from August 2010.
GM grew 18%, for its seventh gain in U.S. market share in eight months. The Cruze was a top performer, helping GM post an unrivaled 155% gain in small car sales.
The Korean automakers Hyundai and Kia have also benefited from Japan’s woes. For instance, combining the two partner companies places Hyundai-Kia fifth in August sales, ahead of both Nissan and Honda for the fourth-straight month.
Detroit and Korea’s gains could be short-lived if consumers return to Japanese cars as inventories improve.
Honda is back to full production for all its North American-built vehicles except the Civic, spokesman Ed Miller said. The company will run overtime at every plant — typically two shifts working two Saturdays a month — through the end of the year.
At Toyota, all North American plants return to full production this month. The automaker will build 15% more vehicles in the fourth quarter than its original plan, said Randy Pflughaupt, Toyota’s U.S. sales head, with planned overtime at every factory. Toyota also pulled ahead the launch of its 2012 Camry by about two weeks, promising the new vehicle will arrive in dealerships in mid-September.
By Chrissie Thompson, The Detroit Free Press