Author`s name Alex Naumov

American automakers lose their leadership on US auto market

Detroit auto companies’ grip on the American automobile market ended in July, when dismal auto sales gave foreign nameplates the lead for the first time ever, sales reports showed Wednesday.

The traditional American brands owned by General Motors, the Ford Motor Company and the Chrysler Group held 48.1 percent of the market in July, according to the Autodata Corporation, an industry statistics company in Woodcliff Lake, N.J.

That meant foreign auto companies held 51.9 percent of the market. Their previous high was in June, when they held 49.8 percent of automobile sales.

In July a year ago, Detroit companies held 52 percent of the American market, according to Autodata.

“The world is changing,” said Ron Pinelli, the president of Autodata.

“We were all brought up with the greatness of General Motors, and that these companies were infallible. Times are different today.”

Foreign nameplates have led Detroit in sales of cars since November 2000. But Detroit’s wide lead in sales of light trucks, like pickups, sport utility vehicles and minivans, kept the American companies ahead in the overall market.

The popularity of S.U.V.’s began to plummet in 2005, however, after gasoline prices spiked in the wake of Hurricane Katrina.

This year, with gasoline above $3 a gallon in many parts of the country, Detroit’s big pickup sales have fallen as well, helping the foreign companies squeak ahead in total sales.

John Casesa, an industry analyst with the Casesa Shapiro Group, said: “It adds urgency to what is already an extremely fragile situation in Detroit.”

Foreign brands’ control came in a month when even the major Japanese companies, the Toyota Motor Company and the Honda Motor Company, reported small declines in sales.

But the declines by Detroit companies were even deeper. As a result, the ranking of the companies was G.M, Toyota, Ford, Honda and Chrysler, the New York Times reports.

The results mark a shift 50 years in the making for the U.S.-based automakers, since Japan's Toyota began exporting vehicles to the U.S., according to Bloomberg data. GM alone had more than 50 percent of the U.S. market in 1962. In July, GM, Ford and Chrysler held only 48.2 percent.

“It's historic,” said Rebecca Lindland, an analyst with Global Insight Inc. in Lexington, Massachusetts. “It's painful to see them go below 50 percent.”

The previous low for the traditional U.S.-based automakers was 50.3 percent, in June. The total excludes sales of European brands owned by Detroit-based GM and Ford, of Dearborn, Michigan.

Industrywide sales in July fell 12 percent to 1.31 million vehicles. For the first seven months, sales were down 3.2 percent to 9.55 million, according to Autodata Corp. of Woodcliff Lake, New Jersey.

"No one was immune to the weaknesses in the marketplace in July,” said Jesse Toprak, an auto analyst at Santa Monica, California-based "The demand for new cars is not unlimited." The slowing U.S. housing market, he said, ``has an impact on the psychology of the consumer.''

Mortgage applications in the U.S. fell last week to the lowest since mid-February, pulled down by a decline in filings to buy homes, the Mortgage Bankers Association said today. It was the third straight weekly drop in the index. Falling home prices leave homeowners with less equity to tap for extra cash, squeezing consumer spending.

Gasoline near $3 a gallon also is sapping demand for the light trucks that account for more than 65 percent of vehicle sales at U.S.-based automakers. Their Asian rivals are more focused on cars, which are more fuel efficient than trucks.

Monthly sales for all five of the largest automakers -- GM, Ford, Toyota, Chrysler parent DaimlerChrysler AG and Honda -- dropped for the first time since May 2005, Bloomberg reports.

Source: agencies

Prepared by Alexander Timoshik

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