Big 3 Sales Plunge in March

By: Anthony Fontanelle

The performance says it all - foreign automakers are rising so fast in the auto competition while the Detroit automakers get pretty ill. As a fact, Japanese automaker Toyota Motor Corp. has posted its best month ever as it dominated the hybrid market in March. On the other hand, Detroit's Big Three reported declining sales.

Foreign automakers are strengthening their grip on the American auto market while domestic carmakers sales are dropping from four to nine percent in March. While Toyota is buoyed by the demand for passenger cars and hybrids, the Big Three is sunk by the sales of trucks and SUVs. If such a trend continues, since there is no way that could do the trick, it would not take long before foreign automakers become more profitable than Detroit manufacturers.

The conventional domestic brands of General Motors Corp., the Ford Motor Co. and DaimlerChrysler AG's Chrysler Group reported 51.6 percent of the American market in March. The figure is down from 55.2 percent for the same month last year. "It's a continuation of the trend we've seen over the last couple of years," said Alex Rosten, an auto analyst with Edmunds.com which is a research Web site for car buyers. "Honda, Nissan and Toyota all up. GM, Ford and Chrysler all down."

When the fast-rising Japanese automaker entered the passenger car competition, its sales were boosted by the Toyota Prius hybrid and the Toyota Camry sedan. Only Mazda, with approximately 50 percent gain in March, topped Toyota's gains in the car segment. Toyota sales climbed 11.7 percent, the Honda Motor Co. rose by 11.3 percent and the Nissan Motor Co. sales increased by 7.8 percent.

Among the Detroit automakers, Ford was the worst player. It has posted a nine percent decline in the previous month. Next to Ford is Chrysler with a 4.6 percent decline. GM continues to struggle the greatest with a four percent loss.

"When the economy gets a little tighter, there is a consumer attitude that says, 'We ought to take a look at Toyota,'" said Don Esmond, Toyota's senior vice-president. "We're very excited about what the next few months might hold."

Toyota benefited last month from increased supply of its hybrids and a recently approved federal tax credit for hybrid buyers, Rosten said. But the automaker has erred in pricing the Tundra too high, he said. "They're not going to hit their sales goal unless they incentivize the Tundra up the wazoo," he said.

"The situation with housing and oil prices may start to affect our outlook," GM senior analyst Paul Ballew said. "The risks have increased here. We're trying to balance our goals of trying to grow the business and grow it profitably."

One of Ford's hot selling trucks, the Expedition SUV, lost one-quarter of its sales compared to its sales in 2006. A greater part of it is anchored on enthusiasts' shifting to the new Edge crossover sport utility vehicle. Pipas added, "Some people refer to it as cannibalization of the Edge stealing Expedition buyers. I refer to it as keeping your owners. If we didn't have this new product in our portfolio, I think we would have a score card that's worse than what you're seeing."

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