Friday, August 19, 2005

Big 3 lose ground to the imports

Detroit automakers' market share may fall in August as they run low on cars after discounts.

By Christine Tierney / The Detroit News

Comment on this story Send this story to a friend Get Home Delivery

Sales of import brands rose sharply in the first half of August as Detroit automakers ran out of new car and truck supplies after extending generous employee-style discounts to all buyers.

General Motors Corp., which initiated the employee discount plan in June, saw its share of the U.S. market drop from 29 percent in July to below 25 percent in the first two weeks of August, according to online auto research site Edmunds.com.

Ford Motor Co. and Chrysler Corp., which matched GM's plan in July, fared slightly better in the first half of August while Japanese automakers Toyota Motor Corp. and Honda Motor Co. captured a record share of the U.S. light vehicle market, according to Edmunds.com data.

Overall, U.S. light-vehicle sales in August are tracking above year-earlier levels, according to investment firm Deutsche Bank. It estimates sales are running at a seasonally-adjusted, annualized rate of 17.6 million vehicles in August, a robust level, but below July's torrid pace of 20.6 million units.

"Big Three auto sales appear to be moderating," it said in a research note. "A common theme among dealers we spoke with is that low inventories are constraining sales." Deutsche Bank predicted sales at Detroit automakers would deteriorate in the second half of the month as supplies grew tighter.

"August business is fairly decent but nowhere near what it was last month," said Alan Helfman, vice president of River Oaks Chrysler Jeep in Houston. "We don't have the inventory."

Detroit's automakers extended employee discounts to all consumers to clear out 2005 model inventories, which were high despite production cuts at GM and Ford in the first half of the year.

"GM's success earlier this summer has really taken its toll on inventory levels for several models," said Jesse Toprak of Edmunds.

Deutsche Bank estimates GM's mid-month sales rose 6 percent for a market share of 28 percent. It estimates Ford sales increased 7 percent and sales of DaimlerChrysler AG's Chrysler Group were up 1 percent.

You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.