• News
  • Guides
  • Reviews
  • Media
  • About
  • News
  • Guides
  • Reviews
  • Media
  • About
Sign up Now (For Free)

Sign up for our newsletter and receive the latest automotive news in your inbox!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.
Thanks for subscribing!
News
Read Now
  • All News
  • Automakers
  • Automobiles
  • Auto Shows
  • Business
  • EVs & Environment
  • Guides
  • Lawsuits/Legal
  • Regulatory
  • Ride-Sharing
  • Safety & Recalls
  • Technology
Recent
  • VinFast Focuses on Europe to Beat Chinese Rivals to Market
  • Honda Establishes Global Motorsports Organization
  • Bugatti Rimac Signs U.S. Distribution Pact with VW
  • Tentative Settlement Ends Ford Strike Threat in Canada
  • NHTSA Revives Ford Focus Recall Investigation
  • Unifor, Ford Agree to Contract Extension
  • Volkswagen Reveals Third-Generation Tiguan
  • Minivans Aren’t as Safe as You Think, Study Claims
  • Everyone Wants to Talk to Elon
  • EV Growth to Accelerate as Price Parity Approaches
Editor’s Choice
    Reviews
    Read Now
    • All Reviews
      • Feeder
    • Classic Cars
    • Concept Cars
    • Convertibles
    • Coupes
    • Crossovers/CUVs
    • Diesel
    • Hot hatches
    • Hybrids
    • Luxury Vehicles
    • Minivans
    • Muscle Cars
    • Pickups
    • Sedans
    • Sports Cars
    • Super Cars
    • SUVs
    Recent Reviews
    • A Week With: 2024 Mercedes-AMG EQE SUV
    • A Week With: The 2024 BMW i7 xDrive60
    • A Week With: 2024 Alfa Romeo Tonale Veloce AWD
    • A Week With: 2023 Toyota Camry XSE Hybrid
    • A Week With: 2024 Subaru Impreza RS
    • A Week With: 2023 Chevrolet Colorado ZR2 Desert Boss
    • First Drive: 2024 Polestar 2
    • A Week With: 2024 Mercedes-Benz GLE 450 4Matic
    • A Week With: 2023 Mazda CX-50 Turbo
    • A Week With: 2023 Toyota Prius Prime
    Editor’s Choice
      Guides
      Car Warranty
      • Endurance Warranty Reviews
      • BMW Extended Warranty
      • Extended Warranty For Cars Over 100k Miles
      • Extended Car Warranty Cost
      • Subaru Extended Warranty
      • CarShield Reviews
      • CarShield Cost
      • Aftermarket Car Warranty
      • CARCHEX Warranty Reviews
      • Reputable Extended Car Warranty Companies
      • Used Car Warranty Companies
      • Best Car Warranty
      • Is CarShield A Scam?
      • Mercedes Extended Warranty
      • CarShield Plans
      Insurance
      • How To Identify A Car Insurance Company
      • Geico Mechanical Breakdown Insurance
      • How Far Back Does A Car Insurance Company Look
      • Mechanical Breakdown Insurance For Used Cars
      • State Farm Mechanical Breakdown Insurance
      • Mechanical Breakdown Insurance From Progressive
      • Dollar A Day Insurance
      • Auto Insurance For SSI Recipients
      • Car Insurance Rates After A Suspended License
      • Auto Insurance For Salvage Vehicles
      • Average Cost of Dodge Ram 1500 Car Insurance
      • Car Insurance Florida
      • Full Coverage Auto Insurance
      • GrubHub Insurance
      • Amazon Delivery Auto Insurance
      Shipping
      • Car Shipping Companies
      • uShip Reviews
      • Auto Shipping From California To Hawaii
      • Montway Auto Transport Reviews
      • Cheap Car Shipping
      • Easy Auto Ship Reviews
      • Auto Shipping Miami
      • Auto Shipping To Alaska
      • Car Shipping Cost
      • Auto Shipping Hawaii
      • Auto Shipping Puerto Rico
      • Sherpa Auto Transport Reviews
      • Auto Shipping Atlanta
      • Auto Shipping Boston
      • Auto Shipping. Chicago
      About
      • About Us
      • Contact Us
      • Terms of Use
      • Privacy Policy
      • Affiliate Disclosure
      • Sitemap
      TheDetroitBureau.com

      More than just “another” place to find news, reviews, spy shots, commentary, features, and guides about the auto industry. TheDetroitBureau doesn’t stop with the press releases or confuse a few lines of opinion with insightful, in-depth reporting.

      Contact Us

      Like what you see? Have some ideas for making The Detroit Bureau.com even better? Let us know, we’d love to hear your voice.

        Media
        Listen Now
        • Headlight News: All Episodes
        More from TheDetroitBureau
        • Guides
        • Latest News
        • Auto Reviews
        • Podcasts
        Headlight News

        TheDetroitBureau.com’s Headlight News offers a look at the past week’s top automotive news stories, as well as what’s coming up in the week ahead. Check out the week’s top story and our latest review…along with a dive into the past with this week in automotive history.

        home > news > Automobiles > U.S. Car Sales Likely to Fall Short of Prior Peaks

        U.S. Car Sales Likely to Fall Short of Prior Peaks

        But that’s the good news, many believe.

        Paul A. Eisenstein
        Paul A. Eisenstein , Publisher & Editor-in-Chief
        Jan. 21, 2013
        Chrysler will add shifts - but avoid investing in new plants - as the US market continues to recover.

        It could be a big year for the U.S. auto industry. After an unexpectedly strong close to 2012, most analysts anticipate the market will grow by as much as another million units this year – even more if Washington lawmakers can come up with a long-term solution to the nation’s debt and taxes debate.

        Yet, while 15.5 million vehicles would mark the strongest sales the industry has experienced since the start of the long recession, the bad news is that this would still be well short of the more than 17 million peak the industry experienced during the middle of the last decade.

        Be in the Know!

        Or maybe that’s the good news, a number of automotive leaders suggest.  Ironically, some argue, it was chasing the previous market record that got the industry into so much trouble, adding too much capacity and then being forced to rely on profit-gobbling incentives to keep all those plants working.

        The 17.5 million sales peak set in 2005 was an “an artificial high,” contends Tom Libby, of data tracking service R.L. Polk.

        Sergio Marchionne, the outspoken Chrysler CEO, agrees.  “The illness” that sent two of the Detroit Big Three automakers into bankruptcy and nearly wrecked the third “was horrible and brought on by ourselves,” he contends.

        Nowhere was that more apparent than at General Motors, which was already losing billions even as the market hit its all-time peak.  It had built up so much excess capacity it could only keep those plants rolling with hefty incentives.

        “I hope we learned a lot” coming out of the company’s 2009 bankruptcy, says Mark Reuss, president of GM’s core North American operations.

        The maker used the Chapter 11 process to shed scores of underutilized assembly plants and other facilities, to shed debt and to win critical concessions from its unions.  GM’s labor costs declined by nearly a third, to just $50 an hour today, low enough to allow it to bring back some work from abroad – notably production of the Chevrolet Sonic small car being assembled at the Lake Orion assembly plant north of Detroit.

        The maker still offers some of the largest incentives in the U.S. market but has been trimming those back, along with the rest of the industry.

        The real question is whether GM can maintain its discipline.  The maker’s sales rose a little more than 2% last year, but that was well behind the pace of the overall U.S. market, resulting in a 1.5-point decline in market share – to just 16.9%.

        With Wall Street demanding better results and a sharp upturn in the maker’s stock price, it is “tempting,” admits Reuss, to do “some bad things.”  But he quickly adds that it would be “dangerous” to go back to the old tricks hoping to prop up GM’s sales and share.  The only way that will happen profitably, he concludes, is by offering better products – at a reasonable price that still boasts margins strong enough to boost profits.

        Ford saw its North American margins surge to 11% during the first three quarters of 2012, and “We’re sticking with the plan,” contends CEO Alan Mulally, who gets much of the credit for restructuring the maker during the deep industry downturn – a challenge that was all the more difficult for Ford since it did not use the bankruptcy process to shed debt and close plants.

        If anything, Ford may be taking an overly cautious approach, acknowledges new Chief Operating Officer Mark Fields, who warns that the maker’s “biggest problem” could be a lack of capacity to keep up with the competition if the U.S. market climbs to 16 million annual sales or higher.

        Even foreign-owned makers are treading cautiously.  Toyota, which has built a network of new assembly plants across the U.S. and Canada, has announced it will put a hold on new factory construction to focus instead on making better use of its existing facilities.  Hyundai, which is struggling to meet demand as it bumps against capacity constraints at its own U.S. plant, is looking for ways to break bottlenecks rather than adding another American assembly line.

        “We’ve gone from being a company obsessed with volume to one that focuses on brand value,” says Nissan Executive Vice President Andy Palmer.  The approach may result in short-term sales shortfalls but, in the long-run means a better brand image and higher margins, Nissan’s goal calling for an increase from the current 5% to 8% global margins by 2016.

        It’s not easy to shift direction and accept the idea that it’s okay to see your sales and share lag the market, Palmer concedes. “To go cold turkey is bad,” he says, “for any executive who has spent 30 years pushing sheet metal out of the factory.”

        But the last recession proved that the only way to succeed is to respond to natural market requirements rather than trying to create artificial demand.

        While industry leaders appear to have learned that lesson in the U.S., it’s far less obvious in Europe, where sales last year fell to their lowest level in two decades. Desperate to keep plants going in a region where government regulations and union contracts limit manufacturers’ flexibility, the industry is repeating many of the same mistakes that nearly destroyed Detroit’s Big Three.

        European industry losses are rising to record levels, prompting Fiat/Chrysler CEO Marchionne to warn of an impending “tornado” that could sweep through the industry with unforeseen results.

        Whether makers will be able to maintain discipline there is uncertain but in the U.S., the slow but steady revival of the market seems to be giving them the willpower to follow the right path.

        How to Care for Your Car

        Cheap Car Warranty

        Editor's Choice

        Best Extended Car Warranty

        Editor's Choice
        Recently Published

        VinFast Focuses on Europe to Beat Chinese Rivals to Market

        Yesterday

        Honda Establishes Global Motorsports Organization

        Yesterday

        Bugatti Rimac Signs U.S. Distribution Pact with VW

        Sept. 20, 2023

        Leave a Reply Cancel reply

        Your email address will not be published. Required fields are marked *

        Share this article:
        © The Detroit Bureau 2023
        • Guides
        • Privacy Policy
        • Terms of Use
        • Affiliate Disclosure
        • Contact Us
        • Sitemap
        Follow Us: