US auto slump moves beyond the Big Three
With sales down 1.3 percent so far, the Japanese boost rebates. But a few US models shine.
By Mark Trumbull | Staff writer of The Christian Science Monitorfrom the June 5, 2007 edition
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Fierce competition is shaking up the automotive marketplace in ways that go beyond a simple divide between Detroit and foreign brand names.
It may come as no surprise, for example, that Toyota posted the biggest sales gain in May, but consider the other major company that surged forward: General Motors.
Fuel-efficient cars helped both companies – that's right, GM too – rack up sales that together captured 41 percent of the US market.
Not faring as well in recent weeks: Ford Motor Co. and Japan's second biggest automaker, Honda.
Ford's vaunted F-Series pickup, long the chart-topper among US cars and trucks, is now eating dust from GM's newly revamped Chevrolet Silverado. The Chevy trucks sales have surged, thanks to a package of power and fuel efficiency that beats many rivals.
Honda's road is less bumpy than Ford's, but sales of its Accord sedan are down 14 percent in the past year. Honda's overall volume is up a bit, but in today's hotly contested car market, such gains are hard won.
"Of the big six, the manufacturer that increased incentive spending the most over the last year and last month was Honda," says industry analyst Alex Rosten of Edmunds.com, a major car-shopping website, based in Santa Monica, Calif. "It kind of goes to show that incentives are necessary in today's automotive climate."
That climate has grown more difficult over the past year, for several reasons.
Rising mortgage rates, and a slump in the housing market, is squeezing some consumers' purchasing power when they shop for cars, analysts say.
Gas prices have hit new highs above $3 per gallon in recent weeks, and have been elevated long enough for car shoppers to wonder whether they'll ever hit $2 again. That, too, is affecting the choices consumers make at the dealership.
People aren't just looking for good fuel economy. They're often looking for a car that will fit a tightened household budget.
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