Chevy outsells Ford in 2005 but Foreign Competitution Increases

[Marc]

From Mercurynews.com:

Chevy outsells Ford in 2005
FOREIGN COMPETITION CONTINUES TO ERODE AMERICAN DOMINANCE
By Dee-Ann Durbin
Associated Press

DETROIT - Chevrolet was the bestselling brand in the U.S. market in 2005, outpacing Ford for the first time in 19 years, General Motors said Wednesday. But that was where the good news ended for GM and other U.S. automakers, which continued to lose ground to foreign rivals.

Japanese automakers Toyota Motor and Nissan Motor and South Korean automaker Hyundai Motor all reported sales increases of 9 percent or more for the year. Toyota, whose U.S. sales were up 10 percent over 2004, said its Camry sedan was the bestselling car in the United States for the fourth year in a row, while its Lexus nameplate was the bestselling luxury brand.

The Big Three U.S. automakers' sales were down 2 percent overall, while Asian brands' sales climbed 7 percent and European brands fell 3 percent. U.S. automakers' U.S. market share fell to an unprecedented low of 56.9 percent, from 61.7 percent just three years ago, according to Autodata. Asian brands' U.S. market share rose to 36.5 percent, up from 34.6 percent. The total number of vehicles sold in the United States was nearly 17 million, about the same as the year before.

Jim Press, president and chief operating officer of Toyota Motor Sales USA, said hybrid sales helped propel Toyota's growth. Sales of the hybrid Toyota Prius doubled in 2005.

"Heightened interest in fuel costs and the environment and dependence on foreign oil really stimulated that interest in hybrids,'' Press said.

GM's sales fell 4 percent for the year, led by a 7 percent decline in car sales and a 2 percent decline in sales of trucks and sport-utility vehicles. Although Chevrolet sales slipped slightly from last year to 2.6 million, they outpaced Ford by about 21,000 vehicles thanks to strong pickup sales and enthusiasm for GM's new HHR crossover.

Paul Ballew, GM's executive director of market and industry analysis, said the year-end totals were below the company's expectations. But he said the win for Chevrolet gives the world's largest automaker an important boost. GM lost nearly $4 billion in the first nine months of 2005 as it struggled with high costs and falling U.S. market share.

Ford Motor said its sales dropped 4 percent in 2005 as consumer demand for trucks and SUVs fell in the face of high gas prices. DaimlerChrysler's Chrysler Group, meanwhile, said its sales rose 5 percent for the year thanks to hot-selling models like the Chrysler 300 sedan and the Town & Country minivan, which both saw sales increase more than 25 percent for the year.

Honda Motor also reported an increase of 5 percent over 2004 sales. Honda's car sales were flat but the automaker's truck and SUV sales rose nearly 14 percent, largely on the strength of the Pilot small SUV and the new Ridgeline pickup.

It was a tumultuous year for U.S. automakers, which enjoyed near-record sales over the summer, thanks to fixed-price ``employee discounts,'' but watched large SUV sales plummet when gas prices spiked after Hurricane Katrina. George Pipas, Ford's U.S. sales analysis manager, predicted SUV sales will stabilize in the coming year as long as gas prices remain lower than $3 a gallon.

"This is still a big segment, this is still a popular segment that meets the needs of many consumers,'' he said. "The wild card is gas prices.''

Automakers expressed optimism about 2006.

"It's not the perfect backdrop because energy prices are higher than people anticipated, but the overall backdrop for this industry is not that poor,'' Ballew said.