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The 2008 U.S. Auto Market Share Predictions: What Will Be the Pace of the U.S. Consumer Race to Quality?
AutoOnInfo.net January 2008
The 2008 U.S. Auto Market Share Predictions: What Will Be the Pace of the U.S. Consumer Race to Quality?
By James B. Bleeker
We begin with the last two year's predictions. The following table provides these, together with 2007, 2006 and 2005 U.S. market shares.
Table I: The 2007 U.S. Auto Market Shares, Auto on Info's 2007 U.S. Auto Market Share Predictions, the 2006 U.S. Auto Market Shares, Auto on Info's 2007 U.S. Auto Market Share Predictions, and the 2005 U.S. Auto Market Shares Manufacturer 2007 U.S. Market Share 2007 Predictions 2006 U.S. Market Share 2006 Predictions 2005 U.S. Market Share Toyota Motor Corporation .16 .17 .15 .14 .13 Ford Motor Company .15 .15 .16 .16 .17 Chrysler Group of DaimlerChrysler AG .13 .13 .13 .13 .14 General Motor Corporation .23 .22 .24 .24 .26 Next, site manager offers these observations and assessments:
1. In December 2007, while 17 of General Motors' models that are among the Worst of 2008 had sales declines of 10% or more, 8 of General Motors' models that are among the Worst of 2008 had sales increases of 10% or more. This suggests 3 points:
a. Steve Harris, the former vice-president of GM who was resuscitated to quash the constant drumbeat of negative news, per Detroit Free Press, appears to be doing a good job of curtailing access to auto quality information. Site manager notes that (1) on January 12, 2005, AutoOnInfo.net was the 2nd entry in Google's search results for the phrase auto quality news, the 5th entry in Google's search results for the phrase auto news, and the 10th entry in Google's search results for the word auto and (2) today AutoOnInfo.net is not findable, within any reasonable number of pages, for any of these search phrases.
b. While reliability, durability and other quality data suggest that GM's engineering, manufacturing and executive personnel are rather uniquely unburdened with talent, GM's marketing folk appear very talented in manufacturing news and "information." These fellows likely could successfully market mercury as a vitamin supplement and plutonium as a decongestant.
c. The bulk of GM's remaining customer base may be from the bottom rungs of humanity - folks with few-to-no information acquisition skills and unmentionable-to-nearly-no higher cognitive function.
These should nearly ensure that there will be one or more respites, or bumps, in GM's declining market share.
2. The rapid U.S. consumer shift to quality in recent years appears to have strained Toyota's resources enough to dent its quality assurance, as the following chart helps depict.
3. In the second half of 2007, the U.S. consumer race to quality and out of Big Three products slowed to the leisurely pace of the mid-1990s.
Consequently, site manager predicts no change in 2008 in the U.S. market shares of the Reliable Two (Toyota and Honda), Nissan and Hyundai, and the Big Three (GM, Chrysler and Ford), save that Ford's share will drop a notch. The table below provides the past U.S. market shares, the 2008 market share predictions and the natural market share estimates of these seven manufacturers.
Table II: Fractional Shares of the U.S. New Passenger Vehicle Market for the Reliable Two, Nissan, Hyundai, and the Big Three for Years 1993, 1995, 1997, 1999, 2001, 2003, 2005, and 2007, the 2008 U.S. Market Share Predictions, Estimates of Natural Market Shares after Repetitive Buying Responses and Defensive Reactions Fade
Manu- facturer 1993
1995 1997 1999 2001 2003 2005 2007 The Predicted 2008 U.S. Market Shares Estimate of Natural Market Share* Toyota .07 .07 .08 .09 .10 .11 .13 .16 .16 .23 Honda .05 .05 .06 .06 .07 .08 .09 .10 .10 .14 Nissan N/A N/A N/A N/A .04 .05 .06 .07 .07 .16 Hyundai N/A N/A N/A N/A .02 .02 .03 .03 .03 .05 GM .34 .33 .31 .29 .28 .28 .26 .23 .23 .04 Ford .26 .26 .25 .24 .23 .19 .17 .15 .14 .07 Chrysler .15 .15 .15 .16 .16 .13 .14 .13 .13 .00 *The Estimate of Natural Market Share for each manufacturer, save Hyundai, is the fractional share of new registrations of passenger vehicles in New Zealand in 1996. New Zealand was chosen in order to remove from the decision-making process, or at least reduce the influence of, such factors as old name recognition, repetitive buying patterns, and normatively motivated attitudes. The intent was to obtain an estimate as to what share each manufacturer would be able to attain in an environment of rational decision-making, as best each individual is able. The year 1996 was chosen as it is the most recent year in American Automobile Manufacturers Association's 1998 edition of World Motor Vehicle Facts. Hyundai's Natural Market Share Estimate is based on (1) its 1996-2000 Reliability Percentrank average relative to GM's and (2) its product prices relative to those of GM. A different method of estimating the Natural Market Share of Hyundai is used as its reliability has notably improved since the late 1980s, but still does not significantly differ from GM's.
GM's market share is that without the sales by its Saab division, Ford's market share is that without the sales by its Jaguar, Land Rover, and Volvo divisions, and Hyundai's market share is that without the sales by its Kia division.
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