Posted on 12/30/2005 2:33:29 PM PST by Flavius
AP Dec. to Cap Dismal Year for Automakers Friday December 30, 4:30 pm ET By Sarah Karush, Associated Press Writer Lackluster December Sales Expected to Cap Dismal Year for U.S. Automakers
DETROIT (AP) -- A lackluster December was expected to cap a dismal year for U.S. automakers, who saw Asian competitors eat away at their market share throughout 2005.
Analysts are forecasting a weaker month than December 2004, as the impact of traditional year-end deals was muted by deep discounts over the summer. However, the month's sales are likely to be vastly improved from the autumn slump that followed the end of the summer's promotions.
Automakers are scheduled to report December results on Wednesday.
Full-year sales were expected to be essentially flat, but with market share losses for the Big Three, whose best sellers -- gas-guzzling trucks -- fell out of favor.
General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group had a combined U.S. year-to-date market share of 57 percent at the end of November, down from 60 percent two years before.
Robert Barry, an analyst with Goldman Sachs, estimated their December market share at 54.5 percent, down from 58.1 percent last year.
Early numbers released mid-month indicated that sales got off to a slow start in December, traditionally a time of brisk sales thanks to year-end deals. U.S. sales were down 14 percent for the first 11 days of the month, according to the Power Information Network, a division of the marketing research and consulting firm, J.D. Power, and Associates.
Though the pace picked up later, analysts John Murphy of Merrill Lynch and David Healy of Burnham Securities, both predicted December sales would be 5 percent below year-ago levels.
GM, Ford and Chrysler saw sales soar to near-record levels this summer with discounts that let consumers pay the employee price. But sales plummeted as soon as the discounts expired in October.
"The programs were more about 'reallocating sales' than stimulating demand," Barry said in a research note.
The automakers returned to incentives at the end of the year, though, after the summer's deals, they had less effect than in previous years.
Analysts said the biggest change in 2005 was a shift toward cars and away from trucks.
"This shift has been especially prominent in (the) last four months as September's hurricanes and $3.00/gallon gasoline served as a turning point in consumer preference," Murphy noted, adding that if it continues, the trend could accelerate the market share loss of GM, Ford and Chrysler. The domestic Big Three rely on SUVs and other light trucks for the majority of their sales.
The Big Three are banking on new-vehicle introductions to stop the migration of customers to foreign competitors such as Toyota Motor Corp., Honda Motor Co. and Hyundai Motor Co. Healy said he expected GM, Ford and Chrysler to continue to lose market share in 2006, though at a far slower rate.
Higher short- and medium-term interest rates will make financing a car more expensive next year, but that's not likely to have a dramatic effect on vehicle sales given the strength of the economy, he said.
GM shares rose 34 cents to $19.35 in early-afternoon trading on the New York Stock Exchange. Ford shares were up 3 cents at $7.84, and DaimlerChrysler's U.S. shares were down 67 cents to $50.91.
DaimlerChrysler AG: http://www.daimlerchrysler.com
Ford Motor Co.: http://www.ford.com
General Motors Corp.: http://www.gm.com
We all know about the unions.
Ugly cars to no end.
Guess quality is still perceived as poor.
Now, chinese are not even in it yet. They may as well chalk another loss on that one,
I invision the world where you go to wallyworld, buy your ripsoon pants, and groceries and drive away in peoples car. Carl marx would be proud.
Actually think they look as bad as GM product but will cost much much less… a winning formula cheap trans for the worker bees.
Are these cars pictured the Chinese models? If so, what's so bad looking about the red one?
This article is unfair to Chrysler whos sales are up from a year ago and the company is doing goood, note how high the stock price is compared to GM and Ford.
The claim that "Big Three market share is declining" is technically accurate, but unfair. Only Ford and GM have lost share this year. The Chrysler Group U.S. market share grew a full half-point last month and is up for the year. Through November, our sales were up 5 percent for the year.
The difference in quality among automakers as measured by J.D. Power is down to fractions. This year, our quality was only two-tenths of a point per vehicle out of first place—and less than a tenth of a point per vehicle away from Honda. The big story and long-term trend on quality is that it's up across the industry. All automakers are building high-quality vehicles. The Chrysler Group improved its J.D. Power IQS score 14 years in a row.
Toyota recalled 2.2 million vehicles this year. We've recalled 750,000. GM has recalled 4 million. Ford has recalled 6 million.
Their problems are my gains...bought a great new 2005 Silverado for a song last April.
nothing is bad
except that to me it looks as an copy of new corvette maybe jaguar and who knows how many other cars...
which is all good and dandy but obviously since you like it many other people will like and chicoms will have no problem selling them
which just shows that they will cause another havoc onto US car manufacturing whats left of it
I can tell right off the bat that it's styling is derivative, but I still like its looks, and no, I wouldn't buy one. I just get frustrated by the constant ripping of American cars as ugly, followed by the lauding of strange-to-ugly European cars and utterly bland Japanese cars. It looks like the front end styling of that second vehicle pictured is closely related to the downright ugly grille styling of recent VW's and Audis. And what's with the Star Trek-like logo on the hoods? (lol)
To improve their market shares, IMHO, they need to give people the impression that they can make a good small car. Maybe they can already, but for so many years the American-made 4-cylinder engines and their mating transmissions were a joke compared to those from the Japanese.
The problem was that US automakes have been shortsighted for years. GM made its decsion in the mid 90s when it dedicated so much of its plant capacty to trucks and SUVs, while ignoreing any imporvment to its mid and full sized car lines(this is the segment that the big 3 were known for and what made them unique).
Now the platforms that GMs mid and full sized cars are based on are close to 18 years old, their designs look unispired, and while their drive trains have become better(The Impala SS has a V8 finally), it is far too late, at least 10 years too late.
For numerous years now, American auto manufacturers were offering 0% interest, "no money down, and then followed by "Employee Pricing".
What has happened over the last few years is that they have only accelerated the normal consumer's buying cycle. People that would have waited another year or two, before they traded in, took advantage of the low pricing and interest rates. In other words, they sold vehicles 1 - 2 years ahead of the normal ownership cycle. That is why there is a glut of used vehicles on the market. That is also why people are not buying new cars now.
Almost everyone who would have purchased a new vehicle over the next 2-3 years has already done so.
Aren't recall numbers misleading and more reflective of the number of cars sold? If that's the case, then the poorest selling maker will also have the fewest recalls.
But for about 1/4 the price.
Mine, too. Childlock might be defective. Also, it got a flat tire, and I am mightily discouraged at such lack of quality.
Yes this is exactly what happened with my wife and I. We traded in our 2000 car for a SUV. With the 0% financing, we went ahead and traded in our 2002 car the very next week. We won't be buying any cars anytime soon.
An airbag indicator light not coming on in some situations warrants a recall (Chevy Trailblazer). So does a retaining bolt failure leading to total loss of steering without warning (Chevy Silverado).
Counting recalls doesn't tell you anything.
the new Buicks sedans are quite nice. the Lucerne has far more styling appeal than an Avalon for example. Reliability is still an issue, but GMs cars are getting better.
"the new Buicks sedans are quite nice. the Lucerne has far more styling appeal than an Avalon for example. Reliability is still an issue, but GMs cars are getting better."
Yeah but that new Avalon drives like a Lexus and goes 0-60 in the low 6's.
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