Ford and GM are now solidly profitable and Ford's credit rating has moved out of the junk category, but the U.S. market shares for both companies declined significantly in 2012. Whether share is calculated by looking at the first two months of this year versus the same time period a year ago or versus all of last year, the results are the same. While these trends are discouraging in and of themselves, they are particularly concerning right now because the European operations of both companies are suffering through the worst economic recession on the continent since the nineties, putting more pressure on the companies' North American operations.
The GM share decline is attributable in part to a lack of new product caused by program delays stemming from the 2009 restructuring. While Ford did not go through a formal restructuring, the company did have several aging products last year that were only replaced part way through the year. Also, 2012 saw replenished U.S. inventories for both Toyota and Honda after severe shortages in 2011 caused by the Japanese earthquake and tsunami, and these companies' 2012 registrations jumped considerably and most likely impacted the domestics' 2012 results.
Early 2013 registration data for the two domestics are encouraging. Ford and GM are both showing share gains, whether one compares the two months of 2013 with the same time period in 2012 or with all of 2012. Using the former methodology, Ford has picked up seventh tenths of a point and is now at its highest February CYTD level since 2010, while GM’s share has inched up one tenth.
Ford's gains have come from its recently redesigned core Ford Division products including the Explorer, Fusion, and Escape, as well as incremental volume from the all-new C-Max. Surprisingly, the F-Series is enjoying a 17% year-over-year gain despite nearing the end of its life cycle. Ford's corporate share gain has come despite a decline at Lincoln where new registrations are down more than a quarter through the first two months of the year.
At GM, a slew of new products at Cadillac and Buick have helped those two makes enjoy double digit year-over-year gains. These include the Buick Encore and Verano as well as the Cadillac ATS and XTS. The two new Cadillac sedans have garnered over 10,000 registrations February CYTD, about 37% of all Cadillac registrations.
GM has a lot more product coming this year, including the redesigned Impala, Silverado, Sierra and Corvette, as well as a diesel version of the Cruze. One gets the feeling that if GM is ever going to halt its long-running share decline in the U.S., 2013 will be – and has to be – the year.
Posted by Tom Libby, Lead Analyst, North American Forecasting, Polk (04.22.2013)