The U.S. isn't the only market where car sales have stumbled, tripped and hit their head on the coffee table. Japan Times reports that new vehicle sales in The Land of the Rising Sun sank to a 35-year low in 2007. The Japan Auto Dealer's Association recorded slightly fewer than 3.5m new vehicle sales. Automobiles with engines larger than 660cc were down 7.6 percent from 2006, while sales of minicars (engines smaller than 660cc) fell 5.1 percent. Toyota took a huge hit on their home turf, dropping 6.2 percent for the year. Honda, Nissan and Mazda managed to lose less. Analysts blame rising fuel prices, a shrinking population and a decline in wages. Just like GM and Ford (and to a lesser extent, Chrysler), foreign sales are buoying the car companies' bottom lines. Even they're doing relatively well, the current U.S. sales slowdown will take their toll on the Japanese corporate motherships.
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The same thing is happening in Germany
This isn’t REALLY sales figures Japanese style. I mean, where’s all the cutesy anime girls and tentacled demons?!*
I’m noticing a curious trend here. In the United States, Japan and, as Mr Juniper points out, Germany, all the domestic manufacturers are losing market share and YET, seem to be posting record sales in foreign markets. The same thing is happening to France. Renault are bleeding market share, hence, why they took a stake in Autovaz to attack the Russian market and ease their dependence on the French market.
Could fashion be a reason as to why domestic manufacturers are failing in their own markets? Foreign marques always look better than domestic brands. That’s why Lexus can’t get a foot in the Japanese market, because anyone with that purchasing power would rather buy a BMW or Mercedes-Benz.
Just a thought…..
* = For the record, I love Japanese anime! Project A-ko is one of my top 5 favourite films.
KatiePuckrik,
They’re not losing market share; the market itself is contracting in those countries.
I think they are different circumstances Katie. The domestic Japan and German makers both utterly dominate their local markets (especially Japan) so there is no room for further penetration, but the local markets have peaked and are aging and shrinking. There can be no growth at all for them — unless it is in foreign markets, and many foreign markets are growing well.
For the U.S., Detroit nowadays has PLENTY of room for further penetration if they could figure out how to appeal to the finicky locals. Also, the U.S. market decline is purely cyclical, and it is inevitable that the U.S. market will commence growing again (I predict soon, since everyone has forgotten that).
As for foreign brands — I’d say they appeal to many Americans; but only to small niches among Japanese and Germans. Doesn’t go both ways. I’d guess it’s only a matter of time before the almost-new Lexus brand blows past Mercedes in Japan.
Mr Niedermeyer,
It doesn’t make sense. If the United States’ market is contracting, then how can Japanese makers post record sales? There has to be some loss of market for a maker to post a gain, surely?
In the end, whether it’s a loss of market share or the contracting of a market, it all amounts to the same thing: They’re not selling like they want to.
“In the end, whether it’s a loss of market share or the contracting of a market, it all amounts to the same thing: They’re not selling like they want to.”
…..or like they need to. Quas…the beancounters calculate p and l by amortizing fixed costs over projected units sold. A shrinking sales base means fewer units to ABSORB fixed costs, and hence smaller margins and big red ink blots on the profit charts.
Shrinking margins means unhappy shareholders and bankers – just ask anybody from Ford….
Katie: If the United States’ market is contracting, then how can Japanese makers post record sales? There has to be some loss of market for a maker to post a gain, surely?
He was pointing out that the Japan/German suppliers are not losing share in *their own countries*. Of course they are gaining share in the US away from Detroit.
Wow Katie, you like cars and anime. I think I’m in love ;)
As for the story, It seems to me that whatever country you are from, national brands matter less (ask Fiat, Renaul and PSA and they’ll confirm that)
Andy