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US Autos Losing Market Share to Foreign Rivals

The more things change, the more they stay the same.

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Gm Building

Despite rolling out much more competitive cars, and their continued dominance of trucks, the big three (Ford, Chrysler, General Motors) continue to lose market share to their foreign rivals.

In fact, new data from Polk shows the domestic brands lost share over the last three years in 9 of the 10 biggest states for auto sales.

“This data shows that while the domestic automakers have improved in so many areas including quality, styling and safety, this is an extremely competitive market,” said Tom Libby, Senior Automotive Analyst with Polk. “The reality is the domestic brands need to do more if they want to change this and gain market share.”

Tracking vehicle registrations from 2008 and 2011, Polk found European brands picked up share in the 10 biggest states for auto sales, while Asian brands gained ground in 7 of the 10 largest states.

Here is how the Big 3 did vs. their foreign rivals in the top five states:

Vehicle Registration Data 2008-2011

California
Texas
Florida
New York
Pennsylvania
Asian -0.4% -0.9% 3.5% 0.3% 1.6%
Big 3 -2.9% -1.0% -5.8% -1.8% -3.1%
European 3.3% 1.9% 2.2% .5% 1.6%
Source: Polk

Libby says the data sends a clear signal to the auto leaders in Detroit, “Frankly, to reverse this share loss, they are going to have to move forward at a faster and more aggressive pace.”

So why are the domestic brands struggling to reverse the loss of market share?

You can blame it on the Big Three being squeezed from above and below. On the lower end, brands likeHyundaiand Kia have seen explosive growth over the last three years due to improved styling and marketing.


On the higher end, luxury automakers are picking up sales with luxury SUVs and entry level models like the BMW 3 series and Mercedes C class. “BMW and Mercedes stand at the top of luxury mountain,” says Libby. “They also do better in more urban markets and the top ten states for auto sales tend to have more urban markets.”

No place exemplifies the woes of domestic automakers greater than California, the largest auto market in the country. For years GM , Ford and Chrysler have made grand pronouncements about improving their sales in the Golden State.

While the Ford and Chevy brands have picked up market share in that state, eliminating the Pontiac, Saturn and Mercury brands left an opening for other brands including Hyundai and Volkswagen. Meanwhile, luxury kings BMW and Mercedes have strengthened their position in California while Cadillac and Lincoln have struggled.

Libby points out the auto market was in a major upheaval between 2008 and 2011. That said, the latest data shows domestic automakers still have work to do to reverse their loss in market share. “The challenge is changing the perception to match reality,” says Libby. “There is no doubt the U.S. brands make much better cars and trucks, but it takes years for the perception to catch up to reality.”

For the entire country, Polk finds the Asian automakers lost 0.2 percent market share between 2008 and 2011. The domestic automakers lost 1.4 percent while European brands gained 1.6 percent.

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