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American cars continue to lose ground to imports

Sales of vehicles from Detroit's Big Three have been weak and getting weaker lately. But the bad news is even worse when you look at just basic passenger cars. According to a piece in BusinessWeek (appropriately titled "Car Sick"), American products accounted for less than a third of all car sales in July, a new low for the industry.

In July, imports grabbed 68% of passenger car sales in the U.S., leaving General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler with only 32%. And some of that meager number include fleet sales to rental agencies, which produce very slim profits. Factoring those out, BusinessWeek estimates that Detroit's share of the American passenger car market is about 25%.

One stunning illustration of just how bad things are: in July, GM's entire Buick division sold just 6,000 cars. Compare that to just one Toyota model, the Camry, which sold over 42,000 units in the same period. And there are roughly 2,700 Buick dealers, about twice the Toyota figure, which means that on average each Buick dealer sold 2.2 cars during the month. You have to wonder how they manage to stay open.

It's no secret how this situation came about. The Big Three bet their collective house on trucks and SUVs in the 1990s, not cars, and now they are paying the price of that unwise gamble. Despite the arrival of decent (though hardly stellar) cars like the Chevy Malibu and the Ford Focus, American passenger cars have a long way to go before they can once again sustain the American auto industry.
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Last updated: November 22, 2009: 03:57 AM

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