Seven Car Companies Pulling Ahead Despite Recession 22 comments
Rick Newman
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America might be in a recession, but the auto industry is in a depression.
Car sales so far this year are down 35 percent compared with 2008, and that was a bad year, too, on account of $4 gas and the start of the Great Recession. Auto sales in the United States peaked at nearly 17 million in 2006, and automakers used to consider 14 million in annual sales a bad year. In 2009, automakers will be lucky to sell 10 million vehicles.
Some of the victims, like recovering bankrupts General Motors (GMGMQ.PK) and Chrysler, are well known. But stalwart Toyota (TM) is struggling, too, along with its youth-oriented Scion division. Niche brands like Saab and Volvo have lost traction. Nissan's (NSANY) Infiniti luxury division is down.
Other brands, however, have gained ground at the expense of their tire-spinning rivals. With the market so depressed, no major automaker has registered a year-over-year sales increase. But several automakers have gained market share, usually thanks to thrifty cars with good quality that buyers consider a great value during tough times.
To measure who's pulling ahead, we analyzed data from J.D. Power & Associates to determine which automakers have gained the most market share so far in 2009. Companies gaining share during a downturn often become consumer favorites and position themselves to thrive when the economy returns. So automakers inching up the food chain now could become market leaders in a better economy. Here are the brands that have gained the most market share so far this year, compared with 2008:
Hyundai (HYMLF.PK) (4.3 percent market share, up 1.1 points). The South Korean automaker has been aggressively expanding its presence in North America, with a strategy that seems tailored to a sharp recession: Offer lots of features at lower prices than the competition, while boosting quality. The Genesis sedan, named North American Car of the Year, gave Hyundai its first entry in the luxury market last year. Other vehicles like the Santa Fe and Veracruz crossovers, the Sonata and Accent sedans, and the Entourage minivan have all picked up market share at a time when customers are stingy with a buck. The test will be whether buyers stick with Hyundai once the economy recovers, and they're feeling a bit more flush.
Kia (3.1 percent market share, up 0.9 points). This South Korean nameplate employs the same value formula as its sister division, Hyundai, with more of an emphasis on funky cars for 20-somethings. The new Soul, for instance, is a boxy hatchback with a sporty ride and flashy options like pulsing lights that match the cadence from the speakers. The new Forte is a cheaper alternative to compacts like the Toyota Corolla and Honda Civic (HMC). Other models like the Sorento and Borrego crossovers are borrowed from the Hyundai lineup.
Subaru (1.9 percent market share, up 0.7 points). This Japanese automaker offers just four basic models, but its streamlined approach and focus on pragmatic, all-wheel-drive vehicles have worked well among consumers fed up with marketing hype. The new Forester crossover has earned high marks for comfort, practicality, and value and earned twice the market share of a year ago. And since it has no huge SUVs, Subaru hasn't been forced to do damage control as buyers shift to smaller vehicles.
Ford (F) (13.6 percent market share, up 0.5 points). This domestic automaker has been losing billions of dollars and urgently restructuring, but unlike GM and Chrysler, it has avoided bankruptcy and a federal bailout. That makes Ford a chief beneficiary of its rivals' woes. Buyers who want to back the home team but are turned off by the bailouts have been flocking to Ford, boosting share for high-volume vehicles like the Escape SUV and the Fusion sedan. Forecasting firm CSM Worldwide predicts that the parent company, including Lincoln and Mercury, could be the top-selling automaker in the United States within a couple of years.
Volkswagen (2 percent market share, up 0.5 points). The big German automaker has dabbled in SUVs and minivans, but its core vehicles—fun compact cars—have been its strength. Sales of the Jetta sedan are up this year, and new models like the Tiguan crossover and CC sedan command premium prices even though they're on the small side for their class.
Honda (10 percent market share, up 0.3 points). Critics once blasted Honda for failing to build a big pickup or SUV, or offering a V-8 engine. Turns out to have been a smart strategy. The worst-performing vehicle in Honda's lineup is the Ridgeline, a low-volume, medium-sized pickup. Five other vehicles have gained market share, including the Fit compact, the CR-V crossover, and the new Insight hybrid.
Nissan (6.4 percent market share, up 0.2 points). There's no dragon slayer in Nissan's lineup, but the Rogue crossover and Versa hatchback have notched decent market share gains, while the edgy new Cube is drawing young buyers looking to make a statement. Oversize vehicles like the Titan pickup and Pathfinder SUV are losing share, but feisty performance cars like the 370Z and superfast GT-R have helped pick up some slack. Big may be out, but speed, apparently, is timeless.
Disclosure: no positions
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This article has 22 comments:
odd
why is that so many hate the UAW but will by union made products from other countries? if you bought some thing from Germany, Japan, or Korea, and it wasn't made in the US. guess what? union labor made that vehicle
Because social equality will not pay down the California debt, what is demanded much without producing nothing else for the money not only bankrupt. Handing out promissory notes is an economic blackout and demanding more than what could be taxed is a brown out. You got deficit spending. California is heading for a shut down but have no fear. The Obama-mobile car have come. There will be green sprout.
Happened right after Clinton made it all right to buy Chinese made parts.
Then Congress and President Bush, wanting to fund a war we can't afford, through open the doors on free credit and housing. Which 100% hid the destruction taking place in our economy.
Meanwhile, MILLIONS of Americans, former menial/unskilled labor, who used to be able to afford a home, 2 cars and 1.2 kids, were going in debt to continue the lifestyle of their previous jobs.
While working for a small percentage of their former income, or more likely, being shoved into a no benefit contractor job (still happening), they took on massive debt believing the propaganda of "new economy" and "high tech" jobs.
Spent billions on training to find out that the jobs were going to 22 year old new graduates from India.
So, amazingly, once they figured out they were broke, they no longer could afford to buy cars-especially American made cars.
If they even wanted to. About the time by tenth customer went bankrupt from "competition" with Asia, I decided that day that the car companies, especially the UAW, could kiss my red American butt.
Of COURSE cheaply made (as in cost in USD, not necessarily quality-though I question Kia's and the like, I've driven their crap) cars, put together in countries with minimal (no) OSHA, EPA, minimum wage, minimum work hours and child labor laws, would sell more cars.
Cheap is the only thing the bulk of us can afford!
Soon, even cheap foreign junk will be priced out of the reach of the BULK of our citizens, because the car companies and the government are busy firing MILLIONS of small business suppliers and dealers across the country.
Which brings us back to where we started.
How many cars do you think the former auto dealer's employees are going to qualify to buy with their new minimum wage WalMart job?
Korea? Not so much. If the union was truly a "for the worker" union, care to explain why so many American companies are sending so much work there?
Might have to do with the fact that they don't have to pay crap, or retirements, or benefits.
Keep believing the hype that unions are "good" for us. Come to Michigan, look arund to see what the unionization of our state has brought.
Virtually, the only jobs left are union and since they continue to fire their best customers, their numbers are dropping like flies (finally).
On Jul 08 06:34 PM dw57 wrote:
> so far the only company that is surviving really is Subaru. all of
> the others are down on their luck
>
> odd
> why is that so many hate the UAW but will by union made products
> from other countries? if you bought some thing from Germany, Japan,
> or Korea, and it wasn't made in the US. guess what? union labor made
> that vehicle
Thank you Obama.
I grew up in a Chevy town where labor/management feuds were ongoing for decades. The old saying "united we stand, divided we fall" has been the working motto of the US automakers for generations, pushing them toward the cliff.. All it took was for organized, well run companies to start competeing.
US automakers have for decades claimed they couldn't make a competitive small car and kept making motorized livingrooms and motorized family rooms and gigantosaurus trucks. And it worked great while gas was less than $2 a gallon. GM is touting it's new hybrid Caddy Escalade that gets, drum roll please, 20 MILES TO A GALLON !!!! What an accomplishment, right ??? My buddy has a Class A MOTORHOME
The real irony is that all 3 US automakers make competitive small cars in other countries. When you figure it out, let me know. caise I'm clueless why they just don't do it here. Their business plans are just plain bass ackwards.
"My buddy has a Class A MOTORHOME.... that gets close to 20 mpg. So an SUV hybid that gets 20mpg is a JOKE !!!
In 15 years working in the Middle East, I've watched Japanese, German, and Korean brands push American brands to the sidelines (fuel efficiency has absolutely nothing to do with it in these parts, where gas is still less than a dollar per gallon). For the last 3 years, Tata has been gaining traction, but is still far beneath the radar in the States.
For the record, Kia is a Hyundai subsidiary.
they don't have to pay for benefits (probably because they are supported by the state)
and they have a much lower standard of living.
my observation wasn't they are 'good' for us or 'bad'. just that
we beat the American version all the while buying those from over seas.
while we might not see it today.
but if the unions hadn't settled for benefits long ago.
they wouldn't exist today
On Jul 09 10:56 AM TeresaE wrote:
> Germany and Japan, yes. Their citizens enjoy similar standard of
> living to ours (at least our old one).
>
> Korea? Not so much. If the union was truly a "for the worker" union,
> care to explain why so many American companies are sending so much
> work there?
>
> Might have to do with the fact that they don't have to pay crap,
> or retirements, or benefits.
>
> Keep believing the hype that unions are "good" for us. Come to Michigan,
> look arund to see what the unionization of our state has brought.
>
>
> Virtually, the only jobs left are union and since they continue to
> fire their best customers, their numbers are dropping like flies
> (finally).
they bet the company with loans.
and they told every one that would listen that if we don't hit 10 million in sales, they will be in the same boat as the other 2.
guess what?
I doubt we will get there
On Jul 09 11:36 AM jackooo wrote:
> Ford is not a good stock bet. Why? Because as GM and Chrysler emerge
> they will lower prices as they have no debt and Ford, with debt,
> will also have to lower prices.
> Thank you Obama.
their own people will do it for you
On Jul 09 02:20 PM Marky61 wrote:
> Hyundai is a spectacular case study in world domination. Remember
> that crack about Hyundai in Glengarry Glen Ross? Nobody's laughing
> anymore. Another reason for its success, missed by the author, is
> its endorsement of Walkaway Protection, a Canadian company that provides
> innovative "gap insurance" when a customer has to return a vehicle
> due to layoff, illness or other legitimate reason. Hyundai's protection
> plan for buyers was an inspired moment. Fifteen years from now, Hyundai
> will be the world's largest automaker, not Ford or Toyota.
which is difficult to find in small cars, let alone a big truck
bigger problem is that its on the most version of those trucks
would have worked wonderfully well in a much cheaper version though
On Jul 09 11:38 AM axelrod608 wrote:
> >> "The auto industry's depression started..." " Happened right
> after Clinton ..." Sorry, Theresa, it started generations before
> your frame of reference. My father quit working at Fisher Body (
> the old timers will remember GM's 'coach' division) in the 1930's
> because of inhuman working conditions and labor/management violence.
>
>
> I grew up in a Chevy town where labor/management feuds were ongoing
> for decades. The old saying "united we stand, divided we fall" has
> been the working motto of the US automakers for generations, pushing
> them toward the cliff.. All it took was for organized, well run
> companies to start competeing.
>
> US automakers have for decades claimed they couldn't make a competitive
> small car and kept making motorized livingrooms and motorized family
> rooms and gigantosaurus trucks. And it worked great while gas was
> less than $2 a gallon. GM is touting it's new hybrid Caddy Escalade
> that gets, drum roll please, 20 MILES TO A GALLON !!!! What an accomplishment,
> right ??? My buddy has a Class A MOTORHOME
>
> The real irony is that all 3 US automakers make competitive small
> cars in other countries. When you figure it out, let me know. caise
> I'm clueless why they just don't do it here. Their business plans
> are just plain bass ackwards.
cause if you look at the wonder car, you will noticed things you expect as standard are extra.
or not present at all
On Jul 09 02:02 PM donzelion wrote:
> Leaving out Tata is a mistake. While they may be years away from
> putting vehicles into circulation in N. America, if you buy the emerging
> markets thesis, they'll be among the greatest beneficiaries.
>
> In 15 years working in the Middle East, I've watched Japanese, German,
> and Korean brands push American brands to the sidelines (fuel efficiency
> has absolutely nothing to do with it in these parts, where gas is
> still less than a dollar per gallon). For the last 3 years, Tata
> has been gaining traction, but is still far beneath the radar in
> the States.
> thats 20 MPG in town, not just on the highway.
> which is difficult to find in small cars, let alone a big truck<br/>bigger
> problem is that its on the most version of those trucks
> would have worked wonderfully well in a much cheaper version though
My Dodge one-ton dually diesel truck gets 23 mpg in town and 23 mpg on the highway. This probably has to do with the way I drive. Of course, when I'm pulling my 7 1/2 ton trailer, it only gets 14 mpg.
My first car, a 1960 Rambler American Stationwagon, got 25 mpg in town and over 30 mpg on the highway (it had overdrive and freewheeling). It would now be called an SUV. In 1970, I hit a Ford Torino when it turned left in front of me. Hit it almost headon. The Ford had to be towed. It cost me $0.05 to fix my car.
What does this mean? It's all perception. Most Americans under 50 buy foreign cars. Those above 50 buy American. American automakers sell cars overseas that don't sell well here. Europeans buy American Jeeps that get 47 mpg. As to how I drive my truck? 95% of Americans could drastically improve (at no cost) the mpg of the vehicle they now own, but choose not to.
"of course it helps if you have such easy ways to keep others out of your market. they don't even really have to have laws.
their own people will do it for you"
The Nano is built like a "disposable razor" - perfectly appropriate for places where a mechanic can swap out an engine for $20 + cost of the parts, and where millions are upgrading from scooters/mopeds to automobiles.
Big question is whether they've bitten off more than they can chew with Jaguar + Land Rover (same applies to Fiat with Chrysler), and whether the company is truly an automotive player (or merely a variety of family trading companies with some impressive gimmickry). High risk, and potentially high reward (at least, more so than for the established players).
On Jul 09 02:49 PM dw57 wrote:
> doubtful that any one here will buy them (unless that giant sucking
> sound pulls our standard of living down really soon)
They are booming as others die, and making money, too.
FIAT now holds a 30% share in Italy (where the economy contracted 5%), and is fast approaching 10% in the EU market- while doing extremely well in France and Germany, who are quite loyal to their own myriad brands.