For Immediate Release
Chicago, IL – February 12, 2013 – Today, Zacks Equity Research discusses the U.S. Automobiles, including General Motors Company (GM), Ford Motor Co. (F), Toyota Motors Corp. (TM), Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at
The auto industry is highly concentrated. The top 10 global automakers account for roughly 80% of the worldwide production and nearly 90% of total vehicles sold in the U.S.
In January 2013, General Motors Company (GM) led with an 18.7% market share in the U.S., followed by Ford Motor Co. (F) with a 15.9% market share, Toyota Motors Corp. (TM) with a 15.1% market share, Chrysler-Fiat with a 11.3% market share, and Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY) at the last spots with 9.0% and 7.8% market shares, respectively.
Toyota recaptured the sales crown from General Motors by selling 9.75 million vehicles globally in 2012, which exceeded GM’s sales of 9.29 million vehicles. Toyota’s victory can be attributed to its impressive product lineups and marketing initiatives.
Toyota lost its No.1 position to GM in 2011 after gaining the title from GM in 2008. The loss of crown was driven by declining reputation due to a series of safety recalls as well as negative impact from natural disasters in Japan and Thailand in 2011. However, the automaker had vowed to regain the top position by increasing its dependence on the non-U.S. markets, especially the high growth emerging markets.
To remain competitive, the automakers will need to design vehicles that will cater to consumers in both mature and emerging markets while manufacturing them at low-cost using the most advanced technology.
For example, Ford has undertaken “One Manufacturing” strategy, which aims at producing multiple models from plants across the world in order to save production costs and fast adaptation to changes in consumer tastes. The automaker anticipates producing 4.5 models at each of its plants by 2015, up from 3.6 models currently.
Further, the automakers are concentrating on offering more optional features (which will save money on gas) even on the small and less gas-guzzler vehicles in order to attract buyers. The sale of optional features is helping them offset lower profit margins for small cars relative to large trucks.
The automakers continue to shift their production facilities from high-cost regions such as North America and the European Union to lower-cost regions such as China, India and South America. According to a study by CSM Worldwide, China and South America together are projected to represent more than 50% of growth in global light vehicle production in the auto industry from 2008 to 2015.
The role of governments is highly significant. Governments in all major countries have become active auto industry players. Their energy and environmental policies will be strongly responsible in molding the auto industry in the coming years.
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