US autos: Japanese reel in market share

by SR on August 2, 2012

US auto market share by OEM

Toyota and Honda pulling back share

Yes, it was another solid month for the US auto market, with the SAAR staying above 14 million at 14.1 million vehicles in July 2012. As I argued earlier this week, ideally you want plenty of exposure to the US and little exposure to Europe and the Japanese in general (Mazda being an exception) and Toyota in particular has that kind of profile. From January to July 2012, sales have risen 13.9% to 8.4 milliion units. That’s a robust

Moreover, Toyota and Honda continued to pull back market share, as shown in the graphic above (click on the chart for a larger image) with Honda edging over 10% and Toyota pushing back over 14% and closing in on Ford. Toyota’s sales in the US have risen by 28.3% year-on-year so far in 2012 and Honda is up 18.9%. It’s interesting that Ford has managed only a 5.2% increase and GM is at +2.7% (and of course the latter seems to have a truck inventory problem). Although outperforming Ford and GM, Hyundai is growing at less than the rate of the market as a whole, at 9.5%. They’ll lose share this year. Sister company KIA, conversely, is doing well with a 15.9% gain.

As the graphic below shows, sales in 2012 (the red line) are behind the green line. But that green line isn’t 2011, but 2008 – 2012 sales are almost back to pre-global financial crisis levels. Note how far ahead of 2011 sales (the blue line) the red line has risen. While there is still plenty of concern about the economy and the volatility in Europe, cars are still selling. Toyota’s auto parts suppliers (Denso, Aisin Seiki) have the exposure.

US light vehicle sales, year-to-date (thousand units)

With its troubles behind it, Toyota gathers speed

Toyota's troubles vs Toyota US sales

“Hey, Selective Rationality, you keep talking about Toyota’s difficulties, but most auto companies have had a tough time over the past few years. The Detroit Three has been struggling too. What makes you think there’s something special about Toyota?”

“Well, there was the recall of early 2010 for a start.”

“Okay, so Toyota had a global recall of 9 million cars that resulted in widespread negative publicity, soaked up management time, and included having the CEO testify in front of a congressional committee. But apart from that?”

“Um, how about the Northern Japan earthquake?”

“Okay, so Toyota had the global recall, then their production facilities got hit by one of the five largest earthquakes ever recorded, plus the tsunami, and they were also affected the worst nuclear accident after Chernobyl. But apart from that?”

“Then you had the floods in Thailand.”

“Okay, so Toyota had the global recall, then the earthquake and the tsunami and the nuclear reactor thing, then Thailand – the major Asian production hub for Japanese autos and auto parts – has its worst ever floods, which inundated multiple industrial estates and brought factories to a standstill. But apart from that?”

“Apart from that? Nothing much.”

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