It''s now official: Americans prefer non-American cars

06 August 2007

For the first time ever, Detroit lost its leadership of the American automobile market in July 2007. Import nameplates successfully outsold the Big Three American companies, in a month that was dismal for auto sales.

GM, Ford, and the Chrysler Group held 48.1 percent of the market in July, according to a preliminary estimate by Woodcliff Lake, N.J. based Autodata Inc., an industry statistics firm, which basically means that foreign auto companies held 51.9 per cent of the market. That is a long way off from 1984, when the Detroit automakers' share hit 77.4 per cent. Autodata Corp. has tracked sales since 1980.

Even if the companies' foreign brands were added to the tally, for e.g. Ford's Volvo and Mazda, the Detroit Three still held only 49.7 percent of the market last month, according to Edmunds.com, a Web site offering buying advice to consumers.

The change in control has been developing for years and has accelerated as gasoline prices soared and consumers turned to smaller cars while the Big Three focused on guzzling sport utility vehicles and trucks. For most of the decade, foreign nameplates have led Detroit in sales of cars. It was Detroit's wide lead in light trucks, pickups, sport utility vehicles and minivans that managed to keep the Americans ahead in the overall market. However, the popularity of SUV's began to go south once gasoline prices spiked in the wake of Hurricane Katrina. This year, with gasoline reigning above $3 a gallon in many parts of the US, sales of big pickup trucks by Detroit companies have started to dwindle, helping foreign companies sneak ahead in total sales.

What is noteworthy is that the foreign brands' dominance of the American market finally came about during a month which saw sales declines for even the major Japanese companies, Toyota and Honda. The decline for the Detroit companies was even steeper, which is what caused a shift in the ranking of the auto companies.

General Motors sales fell 23 per cent in July compared with 2006, while Ford Motor Company has its sales fall 19.1 per cent. The Chrysler Group, in the midst of a comeback this year, saw its sales fall 9 per cent.