US car makers now control less than half the domestic market. Tim Pollard isn’t surprised
While Britain was deluged with the wettest July on record, the American car industry was inundated with problems of its own. For the first time in its 102-year history, the US car industry no longer controlled its home market. The Big Three – General Motors, Ford and Chrysler – grabbed 48 percent of new car sales last month, down from 52 percent last year. In days gone by, the US stranglehold was absolute.
Of course, this long-term corrosion of US fortunes will surprise few familiar with the global car industry. We all know that Detroit has been losing ground to foreign importers with newer product ranges more atuned to the modern consumer. But July 2007 will remain a significant date – a symbolic reversal of fortunes that confirms the new world order.
The US car market remains hugely important (it’ll be worth somewhere north of 16 million sales this year) and also one of the most baffling. Incentives to shift excess stock are rife and, surprise surprise, it’s the Big Three who lead the sweetener league table. Chrysler averaged discounts of $4082 per vehicle, Ford $2984 and GM $3130. Distress selling at its worst: they cut prices, but still suffered huge sales falls.
Here in Britain we ceased being patriotic with our car purchases long ago. That’s why MG Rover collapsed and why Jag and Land Rover are now up for sale. Subsidising the cost of cars and shifting metal through sweeteners isn’t sustainable in the long term. The only real answer is for another casualty of war, but who will it be? My money would be on one of the Big Three, or one of their subsidiaries. Who do you think will be the next car company to go to the automotive graveyard in the sky?