Abstract
The US automotive industry has undergone some of the most radical change in
its history during the year
so far. Two of the three major domestic
carmakers, General Motors (GM) and Chrysler, have filed for
bankruptcy,
with the latter emerging from its Chapter 11 status to be taken over by
Italy' s Fiat. GM,
meanwhile, will be majority owned by the US government,
which has injected a further US$30bn into the
company, taking GM' s total
government funding to date to US$60bn. Meanwhile, GM' s Hummer brand,
symbolic of the oversized gas-guzzlers that contributed to the company' s
downfall, has been sold to a
Chinese heavy industry firm Tengzhong Heavy
Industrial Machinery, underlining the growing
significance of the emerging
markets in the sector.
In sales terms, the market shows no sign of a
complete return to health any time soon, with BMI retaining
its forecast
for a 21% decline to 10.4mn units in 2009. However, monthly sales for May were
up by 6%
compared with April, according to seasonally adjusted data, which
showed the annualised rate for sales
climbing from 9.32mn to 9.91mn units.
There is also good news on the production side, as Ford Motor
and Toyota
Motor have both announced increases in US output after working through excess
inventories.
Investment in the development of electric vehicles (EVs) has
also been boosted by tax breaks offered by
the state of Michigan for
automotive battery plants.
Although the US still ranks highly in BMI' s
Business Environment Ratings, this is largely due to its high
scores for
Country Structure and Country Risk as one of the more stable markets. Where
the market falls
down in relation to developing economies is its lack of
growth potential. Vehicle ownership is much
higher and the market more
saturated as a result. The production side of the industry, meanwhile,
comes
under threat as carmakers find it cheaper to produce overseas. GM
has already proposed importing
foreign-built cars to the US as part of its
restructuring strategy.
Despite its problems, GM was still the country' s
leading carmaker in unit sales terms for 5M09, although
they were down by
41.8% year-on-year (y-o-y), giving it a market share of 19.6%. Toyota Motor,
which
also suffered a 39% drop in sales for the period, remains a threat
in second with 16.2%, while Ford
Motor, which has survived without
government funding, takes third with 15.7%. Chrysler has fallen out
of the
top three as a 46% decline in sales took the company down to fifth below Honda
Motor. A
performance worth noting is that of Hyundai and affiliate Kia
Motors. If their market shares are
combined, the group overtakes Nissan
for sixth place with 7.6%. Kia' s sales have been boosted by a
10.6%
increase in light truck sales over the period, suggesting that the segment is
not entirely dead.
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