Big Three Give Up More Market Share

For the first time in the history of the Canadian automotive industry, all three leaders have dropped below 50% sales in the month of October. They did not do much better in the month of September with just over 51% of total sales.

 Ford, General Motors, and DaimlerChrysler have all faced difficult times over the last few years, but for the first time dropped to fill only 49.96% of the market last month. Each one of them has dropped in shares this year.

 The sale of cars and light trucks dropped by more than 4,500 from October of last year, while Ford, GM, and DaimlerChrysler sold under 58,000 vehicles in that month.

 Part of the drop can be related to the end of a clearance program and the increasing cost of fuel, especially since the majority of vehicles featured by these industry leaders are pickup trucks and SUVs, whereas the imports tend to focus more on cars, many sold as fuel efficient models such as Hondas and Toyotas.

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 Does this trend look as though it might continue?

 “We may see them going below 50 on a monthly basis a little more frequently next year, but whether the Big Three will do so annually is a tougher call,” Dennis DeRosiers, president of the DesRosiers Automotive Consultants, said. “Indeed, it was only a few years ago that we were all shocked when Toyota outsold one of the traditional Detroit-based companies for the first time in a particular month. Now Toyota and Honda regularly rank in the top three spots.”

 Back in 1996, the “big three” companies held 77% of the share and just over 55% for the few three-quarters of this month.

 It is anticipated that while the companies might report losses over the next two month, they won’t report an overall loss for the year.

 Sales in the U.S. are following the same trend, as the big three’s market share has declined there for 28 consecutive months. If you recall my commentary a couple of weeks ago, Ford’s Chief Executive, Bill Ford Jr., has given the go-ahead to his new management team to do whatever it takes to “turn around North American automotive operations.”

 This team is really going to have to up the ante if North American automakers want to regain some of their lost ground, especially as it seems to be slipping away further from month to month.