By Craig Trudell, Automotive News - General Motors Co. Vice Chairman Stephen Girsky said last week the automaker wasn't panicking over its U.S. market share slide. Ohio dealer Robert Morris III sees why."There's a little bit of new-product lag involved and you kind of have to wait it out," said Morris, who sells Cadillac, Buick and GMC brand vehicles in North Olmsted, about 25 minutes southwest of Cleveland. "I don't perceive them as taking a wait-and-see attitude or just taking it on the chin."
At 17.5 percent, GM's U.S. market share through March "may have surprised some people," Girsky told analysts April 4. I'ts below the 19 percent level that was the average full-year estimate of five analysts Bloomberg surveyes in January. GM finished 2011 with 19.6 percent of the U.S. market, according to researcher Autodata Corp. The last time it ended a year with 17.5 percent market share or less was 1922.
The drop for GM, which retook the title of the world's top-selling automaker in 2011, is among the biggest surprises this year in U.S. market share moves. Increased demand is spurring analysts and automakers to boost 2012 sales estimates.
Chrysler Group LLC added 2.1 percentage points of market share, showing up the five analysts that Bloomberg surveyed in January. They estimated Chrysler, GM and Ford Motor Co. would cede share to the rebounding Toyota Motor Corp., which lost the 2011 world's sales crown to GM, and Honda Motor Co.
'Stale' product
"GM's product is getting stale," John Wolkonowicz, an independent analyst in Boston and former Ford product planner, said Monday in a phone interview. "Chrysler is having some of the 'Little Engine That Could' phenomenon right now. They were the real underdog that's pulled themselves up by their bootstraps and they're hot stuff all of a sudden."
GM pulled back on incentive spending per vehicle by $405, or 11 percent, this year in the first three months to an average of $3,161 for every car and light truck it sold, according to Autodata. The automaker's sales still grew 2.7 percent through March, and its total light-vehicle deliveries led Ford, No. 2 in the U.S., by 70,498 and Toyota by 121,036.
In the first quarter, GM had five of the top 20 selling vehicles in the U.S., including the Silverado pickup and Malibu sedan. The company last week unveiled a redesigned Impala sedan at the New York auto show.
Morris, the Ohio dealer, is just ramping up sales of GM's new Buick Verano compact and will have the Cadillac ATS sports sedan and XTS large sedan to sell by the end of the third quarter. Those are among the new models that GM has said it's introducing in 2012 for segments representing 60 percent of U.S. retail deliveries.
Chrysler surprises
"We're going to be competing in segments where we haven't been before," Morris said in a telephone interview. "The fuel economy is much better for something like ATS or Verano. We didn't have small entries like that, so we didn't have a car to compete."
Chrysler deliveries climbed 39 percent through March to 398,051, boosting its share to 11.5 percent. Analysts estimated that the automaker controlled by Fiat SpA would end this year with 10.5 percent share, down from 10.7 percent in 2011.
"We never really saw Chrysler increasing their share as much as they have," Alec Gutierrez, an analyst at Kelley Blue Book in Irvine, Calif., said in a telephone interview. "Consumers are getting the sense that Chrysler is once again producing higher quality products. The last couple years, people shied away from Chrysler because there was still uncertainty about their viability."
Vanity versus sanity
New or redesigned models such as they Chrysler 200 and 300 sedans and Jeep Grand Cherokee sport-utility vehicle led the automaker's sales to outperform Kelley Blue Book's estimates, he said. Bloomberg also gathered estimates from analysts at AutoPacific, LMC Automotive, Edmunds.com and TrueCar.com for the January survey.
Chrysler is adding third shifts at plants in Illinois and Ohio this year to meet demand, said Reid Bigland, Chrysler's head of U.S. sales. That should give the automaker enough capacity to maintain market share gains if demand in the U.S. keeps accelerating, he said.
"But remember the old saying 'market share is vanity and profitability is sanity," Bigland wrote in an e-mail. "We are going to continue to run a disciplined game plan first with our market share numbers being secondary."
Ford sees its share of the U.S. market falling this year, Mark Fields, the automaker's president of the Americas, told analysts last week at an industry conference in New York. The automaker previously forecast share to be about equal with 2011's 16.8 percent.
Ford's share
"Market share is important, but we also want to do that profitably," Fields told reporters last week at the New York auto show. "We won't engage in marginal business" through deliveries to fleets or bigger discounts.
Ford light-vehicle deliveries rose 8.5 percent through March. The automaker claimed 15.5 percent market share, down from 16.2 percent a year earlier, according to Autodata. The average estimate among five analysts Bloomberg sureveyed in January was for Ford to end the year with 16.3 percent share.
GM, Chrysler and Ford will be tested this year by Toyota and Honda, which have rebuilt inventories after last year's tsunami in Japan and floods in Thailand. Those natural disasters disrupted the supply of parts and finished cars, leading to vehicle shortages.
Toyota increased sales 12 percent, trailing the industry's 13 percent gain, according to Autodata. That leaves Toyota with 14.1 percent market share, down from 14.2 percent a year earlier. Toyota is beating the 13.8 percent average of five analysts' estimates for full-year 2012 share.
Nissan passes Honda
Honda sales rose 4 percent through March, giving it a 9.2 percent share of the U.S. market, down from 10.1 percent in 2011's first quarter. Honda may end the year with 9.5 percent of industry sales, according to the five analysts' average estimate.
Nissan Motor Co. passed Honda in U.S. sales through March to rank No. 5 among automakers in the market after increasing sales by 13 percent. The automaker had a 9.3 percent market share, unchanged from a year earlier and ahead of analysts' estimates for 8 percent for 2012.
Ford and Toyota last week raised their forecasts for 2012 industrywide U.S. auto sales. Ford estimates deliveries of 14.5 million to 15 million, including medium- and heavy-duty trucks, up from a previous range of 13.5 million to 14.5 million. Toyota boosted its forecast for light vehicles only to the low- to mid- 14 million unit range from 13.6 million.
GM has left its estimate for 2012 sales unchanged at 13.5 million to 14 million. GM's Girsky said at the April 4 conference that the automaker won't chase share with big incentives and cited refreshed products such as the Chevrolet Malibu sedan as reason for optimism.
"No one's panicking," he said. "No one's rushing, 'Gee, we got to throw a pile of money at the market.' That's not the way we run the business these days."
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