Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) had a drop off in sales in February, compared to the same month last year, according to forecasts by Kelley Blue Book. The two largest car companies selling vehicles in the United States are losing market share to smaller competitors, which means the turnaround of each, now almost five years old, has been dented. And the line-ups of new models each company has put into the market have not done much to improve either manufacturer’s prospects.
Kelley Blue Book predicts that GM’s sales will fall 4.2% to 215,000. Sales for the industry as a whole in February will be flat at 1.19 million. Ford’s sales are expected to drop 7.8% to 180,000. Manufacturers in the tier below GM, Ford and Toyota Motor Corp. (NYSE: TM) should post business that picks up considerably.
Nissan can hardly be described as a competitor to GM, Ford and Toyota. However, its sales are expected to rise 8.4% to 108,000. The other car company that is expected to post substantial gains is Chrysler, up a forecast 6.5% to 148,000. Its poor ratings in research released by JD Power and Consumer Reports have not harmed it, apparently, which says something about the effectiveness of their data to sway car buyers.
Chrysler and Nissan share one thing in common. Each has a modest line of cars and light trucks. Chrysler has only three basic models — the 200, the 300 and the Town & Country. It also has its Jeep and Dodge divisions. But none of these can match the breadth of the product lines of its larger rivals. Nissan’s product selection is somewhat larger than the one Chrysler and its divisions have. Nissan sells five basic car models, one sports car (which excludes is super car GT-R), six SUVs and two pickups. It also has the Infiniti line of luxury cars, which have always sold well below market leaders Mercedes, BMW and Lexus. Notably, Nissan has never been competitive in the pickup market, which is absolutely critical to overall sales success.
The efforts, and failures, of Ford and GM to increase their market shares show how fickle car buyers can be. Each has launched an improved version of its flagship pickups — the F-150 and Chevy Silverado. Each has a small army of cars, SUVs, hybrids and sports cars. Ford has upgraded visible models, particularly the Mustang. GM has released several new models, particularly under its Cadillac brand.
There is not a single easy explanation about why market leaders Ford and GM have struggled recently. It may be a failure of their product development. It may be that there are too many smaller competitors, which among them offer many model lines, and these have flanked Ford and GM and many of their most important products. Whichever of these causes is true, each of the companies has started to slide in sales, and neither can afford to. The American market is simply too important.
See also 24/7 Wall St.’s analysis of Jeep sales.
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