The Big Three US automakers lost control of their home field Wednesday as foreign automakers captured half of the US market for the first time.
General Motors, Ford and Chrysler, which have suffered from a steady loss of market share to Asian rivals, ended July with just 48.1 percent of the market.
Chrysler was surpassed by Honda for the first time in July and Ford continued to cede the number two spot to Toyota.
Asian carmakers captured 44.6 percent – with Toyota Motor accounting for 17.1 percent of the market – while European brands held 7.3 percent, according to Autodata.
The decline in share came as American carmakers cut back sharply on low-margin sales to rental companies in the midst of an industry-wide slump.
All but one of the top six manufacturers reported a decline in sales during July as higher gasoline prices and turmoil in the housing market helped trim overall sales by an estimated 12 percent.
But the Big Three were hit hardest at a time when they can ill afford it.
Since the end of 2005, GM and Ford have cut their payrolls by more than one-third and invested more than 14 billion dollars in massive restructuring programs aimed at making them more competitive.
Chrysler slashed another 6,000 jobs this year in its North American operations in effort to return to the profitability it enjoyed up until the second half of 2006.
However, the American carmakers are still heavily dependent on the sales of pickup trucks and sport utility vehicles designed for the relatively inexpensive gasoline prices that prevailed prior to the war in Iraq.
“Small SUVs and small cars have shown the strongest sales growth in 2007,” noted Dick Colliver, executive vice president of American Honda.
Ford sales analyst George Pipas said he did not believe the company's executives would pay much mind to the dip below 50 percent.
“It's been going on for 30 years,” Pipas said during a conference call with analysts.
“The reason is because there is relatively little fleet content in July, and obviously the Big Three do more fleet business than do the foreign manufacturers,” Pipas said.
Pickup truck sales are linked closely to the housing market and the housing slump has been deeper and taken a larger toll than expected, noted Ellen Hughes-Cromwick, Ford's corporate economist.
“Home prices are still falling across the country,” she noted. “New vehicle sales clearly remain challenging,” she said.
Ford reported a 19 percent drop in sales, GM reported its sales were down 18 percent and Chrysler's fell eight percent.
Both Toyota and Honda, the two largest Japanese brands, reported about a three percent drop in sales for July.
“The month of July proved to be a challenge for the whole industry,” said Bob Carter, the Toyota Motor Sales vice president in charge of the Toyota Division.
European manufacturers reported mixed results. BMW enjoyed a good month, posting a 21 percent increase, while Mercedes-Benz reported a 14 percent decline. Volkswagen and Audi reported sales that were essentially even with last July.
The slowing sales tempo has led to an escalation in incentives for buyers, particularly by Japanese carmakers, analysts said.
“We are seeing combined incentive spending for Japanese automakers reach record highs this month,” stated Jesse Toprak, director of industry analysis for Edmunds.com. “Even Toyota was aggressive — with its highest ever month — to help fuel sluggish sales.”
Toyota's Carter, however, said the third-party services that track incentive spending tend to overstate the size of the rebates handed customers.
