U.S. Market Slipping Away From Domestics

Automotive Industries,  March, 2001  by Ray Windecker

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The long-time trend of in-country consolidations and cross-border expansions has morphed into serious globalizations. Illustrating the point, Rambler becomes Nash-Hudson-AMC-Mack-Renault; Mack-Renault drops out and Chrysler absorbs AMC. Chrysler then becomes DiamlerChrysler, controlled by Stuttgart.

There are now only two domestic manufacturers remaining in the U.S., and we are rapidly approaching a 50/50 split between U.S. and overseas-based control of the U.S. market.

Of the two remaining domestic players, General Motors Corp. controls the sale of its traditional brands, Hummer and Saab. Ford Motor Co., apparently concluding that it's cheaper to buy existing networks than to start from scratch, has picked up 2.5 percent of market share by bringing Jaguar, Volvo, Mazda, Aston Martin and Land Rover under its control.

Of the overseas controllers, Renault quietly controlled Mack and AMC for years, and it now controls Nissan. Mercedes, kick-started in the U.S. through a 10-year alliance with Studebaker, was a visible but low-volume player. With one stroke of Eaton's pen, it became a significant force in the U.S. market.

Will the trend towards overseas control continue? A near-term takeover of Ford or GM is improbable. A slow whittling-away is likely, but not a given. The hard fact is that this country is down to two full-line domestics fighting off roughly 20 other groups of various talents and energies, many of them already operating in the U.S.

Rest assured, globalization will continue. Mitsubishi and the Koreans are already in play.

                 1980 1985 1990 1995 2000
GM               44.1 40.3 35.2 32.2 27.8
Ford             20.4 21.3 23.8 25.6 25.1
Chrysler         11.3 11.8 12.0 14.3   --
Other             0.9  0.8  0.9  0.9  1.0
U.S. Control     76.7 74.2 71.9 73.0 53.9
Japanese         17.7 19.2 23.7 22.6 19.3
Daimler           0.5  0.6  0.8  0.9 16.0
Renault           2.1  2.2  0.2  0.2  4.5
Other             3.0  3.8  3.4  3.8  6.3
Overseas Control 23.3 25.8 28.1 27.0 46.1

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