The "Big Three" American manufacturers are DaimlerChrysler (NYSE: DCX), Ford Motor Co. (NYSE: F), and General Motors (NYSE: GM). While today's numbers really shouldn't surprise too many people, it should serve as a nice wake-up call to all the above companies which have been struggling to keep up with their foreign rivals.
General Motors posted strong earnings yesterday, but as we pointed out, the one big area of weakness remains its sales in North America, where it once again posted another loss last quarter.
The only bright side is that American manufacturers were not the only companies that suffered from poor sales last month. Even the red hot Toyota Motor Corp. (NYSE: TM) saw a year-over-year decline of 7.4%.
But the question remains... what can Ford and GM do to regain American market share? Most analysts and industry experts agree that both companies rely far too heavily on truck sales and need to start to diversify more out of this area. This segment of the auto market has been particularly hard-hit recently due to the weak housing market that has led to slower housing starts. As housing starts fall, so will the demand for heavy trucks and consequently F and GM auto sales.
Ford and GM currently have about 30 percent of their product line represented by trucks. Compare that to Toyota's low 5% and it doesn't take a genius to understand one major reason why Detroit is falling behind.
What do you think about these recent figures? I am curious to hear from our readers why they think Ford and GM are unable to take back lost market share. If you were in the market for a new vehicle today would you even consider visiting your local Ford of GM dealer? Or would you head straight to the Toyota or Honda lot, and why?
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.











Reader Comments (Page 1 of 2)
8-01-2007 @ 7:49PM
Joe said...
I bought a 2007 F-150 because of the $3,000 rebate. I was going to buy a Honda Civic, but the 2007 Ford Focus had a $2,500 rebate so I bought it.
8-01-2007 @ 8:45PM
Sky said...
This should not be a surprise to anyone that the American auto companies are loosing out on the US market. The lack of quality in the past and excessive prices have allowed them to dig their own grave. It is going to take a lot to regain that market.
8-01-2007 @ 9:23PM
toytruckman said...
I only go to GM dealerships. I have had many GM vehicles over the years and have only had one Oldsmobile Calais that was a problem vehicle. Yes, I have had to take all of them in for some type of issue but nothing major. I am sure that owners of these foreign manufactured vehicles also have to visit the dealership for issues or they would not need mechanics at the dealerships. My wife has a BMW and we have to make an appointment usually a week out while I can get to my GM dealership the next day usually. As to the quality issues, the last few years, GM and Ford have had the best plants for quality in North America according to J. D. Power.
8-02-2007 @ 10:50AM
Jim Engle said...
If you are wondering what is going on in our economy, look at what you drive. One percent of the U.S. market share is 20,000 jobs. I read that in 2000 there were 257 different vehicles that you could buy, today, there are over 350. We are struggling with budgets and autos come in with very little tariff but if you send a Taurus to Korea it will cost you $60,000. Trade?? Look at our trade deficit over the last 6 - 7 years, can this continue? The U.S market is the number one market for all Asian automakers. They are limited in Europe. By the way, Ford has just surpassed Toyota in quality according to J. D Powers and has anyone heard about the 4-5 million autos that the U.S. has told Toyota has to recall over engine problems. That one is still in court!
8-02-2007 @ 1:25AM
pissedatGM said...
Not only do some American cars have poor quality. I know several people who have had to replace transmissions on Honda's that are only three or four years old. I also know a few people who have had blown head gaskets on Honda four cylinder cars and a major repair bill as well. I have heard people who have the same make and model of car and one of them has a lemon, and the other one does not. Lemons come in all shapes and sizes. In the car world, lemons come in all makes and models. I have owned eight GM cars over the last twenty years and have had good cars that ran for 15 years with no major problems. However, the last GM car I bought has had steering shafts replaced three times in 20,000 miles. There is a problem with the model I purchased from GM that they know about and are not doing anything about to fix or recall the cars. Everyone who has this make and model has the same problem with the steering shafts. GM knows there is a problem but has largely ignored the customers who purchased these vehicles. I will be switching brands shortly, and will most likely go to a brand made by the Ford Motor Company. I am looking at Mercury, Lincoln, and Volkswagen. The new Lincoln MKZ looks like it will be my next choice. My sister owned a Toyota, and she traded it for a Volkswagen. My sister also said Toyota's service is no better or different than the service offered by Mr Goodwrench.
8-02-2007 @ 2:10AM
mark henk said...
The way to profitability for U.S. auto companies is very simple - be the leaders in developing and offering electric (or any other alternative powered) cars. The company that wins this race will have absolutely no problem selling cars. Americans ( I would be among the first in line) will flock to the auto company that offers them the opportunity to never buy another drop of gasoline.
8-02-2007 @ 2:11AM
Ben Prah said...
I will never buy another GM product.I bought a 2004 Tahoe for $40,000,it only has 21000 miles on it,and it is already falling apart,it seems conviently right after my 3 year warranty ran out.The hinges on my inner console broke,my driver side mirror fell off,and i also had to have a steering bar replaced twice and now its broke again.from now on i will buy foreign vehicles.
8-02-2007 @ 6:41AM
anthony tremari said...
The new.s media allway's beat's on american auto
company's and the work force and all the money we
make because we have health care. My tax's pay for
people's health care take away theirs and you can have mine. And as for the great retirement pay after
30 years you get 1500 a month. Can't even live in
mexico on that.
8-02-2007 @ 6:51AM
Ron said...
The reason people purchse foreign cars, they hold their value and have a higher resale or trade in price.
8-02-2007 @ 7:45AM
Colin said...
I've wanted to buy a GM car because I have over $1500 for that purpose in GM points. However, I can't find one I like! I had hopes for the Malibu Maxx, but I found the low steering wheel bruised my legs getting in and out. I like station wagons, and the Germans seem to have the best products -- in looks, in comfort, and in performance.
For green reasons, I'm also considering diesel. VW seems the only real choice there.
8-02-2007 @ 12:01PM
Larry Rupp said...
When you buy that UAW made car almost $2,000 of the purchase price goes to union health care. No wonder they can't compete.
8-02-2007 @ 10:50AM
jpdr1100 said...
"For green reasons, I'm also considering diesel. VW seems the only real choice there."
There are no 2007 VW diesels being sold in the US because they can't meet emissions standards.
8-02-2007 @ 2:03PM
jpdr1100 said...
If you try to import a truck, the US will slap a 25% tariff on it. Any wonder why Detroit gave up on cars and fled to trucks in the 1990s?
BTW, Ford did NOT surpass Toyota in vehicle quality in the most recent JD Power survey. The Detroit-friendly reported it that way, but overall Fords had more defects than Toyotas.
No one in their right mind would try importing a Taurus into Korea, it wouldn't fit. The second largest auto exported from Korea is GM. They are more interested in exporting from Asia than they are importing into it.
BTW, did you hear about the 6 million Fords recalled last year for cruise control fires?
8-02-2007 @ 2:35PM
Harry said...
The next time anyone is in an accident in their economic gas saver with a safe American made real vehicle and suffers serious injuries, just remember to comfort yourself by knowing that you were saving a few dollars on every tank of gas you put in shit box which is made in some foreign country making some foreign company profit.
GM, Ford & Chrysler have paid millions of Americans wages over the past several decades and continue to pay millions of Americans wages. That is the back bone of American auto industry not toyota or honda who make cheap unsafe cars and make the large part of their profit selling here in the U.S. thanks to our corrupt misguided media.
I own several GM cars and SUV's and love them.
8-02-2007 @ 2:51PM
Gumby said...
UAW miscalculated because steel, copper, plastic, health costs, energy costs, and others soared after last UAW contract talks in 2003. Management feed data in computers and get everything so fixed so to make miniimum earnings after giving all UAW wanted and nothing for shareholders. Boom! GM sank like USS Arizona!! Now UAW is back to the tables with management all shook up but still hard headed about not giving an inch to shareholders. Management does nothing but sitting on hands. Management is a patsy of UAW!!!
8-03-2007 @ 2:37AM
Gumby said...
UAW is not paying any attention to the onslaught of imports. UAW is so concentrated on what GM has to give and as long as nothing is given to shareholders, all is well.... This is classical UAW thinking. It is much more complicated than you think. UAW is really smarter than we think and UAW does everything for themselves and not one red dime for shareholders. One by one car buyers walks away from GM dealerships everyday... It is happening so slowly that it will still take decades before GM finally go belly up!! Ford already mortgaged its future for last supernova!!
8-03-2007 @ 2:23AM
Gumby said...
UAW is playing cards with management during contract talks right now. They are already made up their minds.. that is SCREW GM SHAREHOLDERS AT ALL COSTS NOT ONE RED DIME !!!
Ok, I guess I got your attention or your ignorance as usual...
8-02-2007 @ 3:13PM
Michael Manicone said...
I don't understand how American Workers can assemble Honda cars in The US and do a commendable job. American workers also assemble Ford, GM, and Chrysler cars and trucks, but these cars are perceived to be inferior in quality. Something is wrong somewhere. American workers are the equal of any in the world, so the designs and materials used have to be responsible for the differences in the finished product.
8-03-2007 @ 10:18AM
jeff said...
Gm and and Ford build quality products. Why is everyone rooting against them.
When Toyata passes GM for a month it is news, when they are ahead for 6 months it gets headlines. If GM wins the sales race it recieves now headlines. For many years Toyota had inferior safety results...noone seemed to care. Consider American - give it a fair test and you might be surprised.
8-03-2007 @ 4:32PM
A D said...
All GM and Ford need to do is do the same as the Japanese have done.
Go to Washington and buy off any Senator or Congressman.
Of course the US has no reciprocating trade policy for Japan, they send us crap, we send them money.
They buy all our debt, we make sure we don't complain when they won't allow any of our goods into their country at real market value.
Trade with Japan is a joke. The punchline being the middle class. The middle class is getting punched into the unemployement line.
It's time to tariff the stink out of anything they send us. They lie about the value of money to hurt any business here and lie about letting any of our goods in there.