Sales Race Revs Up

Chattanooga Times/Free Press, Tenn.
7/27/2007

Dave Flessner

Jul. 27--This year, for the first time, more vehicles sold in the first six months in Hamilton County were not manufactured by America's Big 3 automakers.

But while foreign-made brands barely edged out their Detroit-based competitors, Ford and General Motors maintained their top-selling spots overall in an increasingly crowded field of car and truck brands.

"Ten years ago, four or five major manufacturers dominated the market, but today there are a lot more manufacturers from around the world offering many more name brands and types of vehicles," said Todd Dyer, general manager for Marshal Mize Ford in Chattanooga. "Fortunately for us, Ford remains No. 1, and especially our truck buyers remain very loyal."

Detroit's Big 3 captured only 36 percent of the car sales in Hamilton County during the first six months of the year, according to vehicle registrations compiled by the Hamilton County clerk's office. But the domestic manufacturers still sold more than 62 percent of the even larger market in Chattanooga for trucks, vans and sport utility vehicles.

SHIFTING SHARES

Nationwide, GM, Ford and Chrysler collectively held a slim majority of 50.2 percent of the vehicles sold in June, according to the research firm of Autodata. But the domestic carmakers' collective share was down from 56.1 percent a year ago and well below their record high of 81 percent in April 1984.

George Peterson, president of the market research firm AutoPacific, said American roads have become more populated with foreign-brand vehicles as Japanese, European and Korean carmakers have increased their sales promotions, dealer networks and manufacturing operations here. Collectively, foreign-headquartered car companies have invested more than $30 billion in U.S. production facilities since Nissan built its first U.S. plant in Smyrna, Tenn., more than two decades ago, and they now directly employ more than 100,000 American workers, according to the Association of International Automobile Manufacturers.

Mr. Peterson said the number of Americans wanting to buy Detroit-brand cars or trucks declined during the 1970s and '80s when many perceived import brands offered more value or reliability.

"I think the domestic brands have come back, but it takes only a short time to hurt your image and a lot of time to improve it," he said.

Ashley Nunley, a 22-year-old Whitwell, Tenn., car buyer, purchased a Nissan Altima this year to replace her Chevrolet Malibu and says she now is "a huge Nissan fan."

David Hickman, general manager at Cleveland Village Honda, says his biggest problem these days is getting enough cars to meet the growing market demand for top-selling Accords, Civics and other Honda brands.

But dealers of domestic brands insist that Detroit car quality has improved dramatically, while Ford, Chevy and Dodge trucks remain popular among truck buyers.

Clay Watson, chief operating officer for Mountain View Ford, conceded that "it's been tough for domestic dealers" in recent years with increased competition from a growing number of imports.

"But we are confident that the domestics are responding to the market and still have a strong future," he said.

Mr. Watson said Ford has remained the top-selling truck in Chattanooga for the past 30 years and continues to draw repeat business.

Lindsey May, a Ford Focus owner from Ringgold, Ga., is among die-hard Ford buyers.

"Ever since I was 15 years old, that's all I have driven," she said while she considered buying a Ford Explorer on Thursday afternoon at Mountain View Ford.

Such sales are critical for the U.S. economy, according to supporters of Detroit-based manufacturers.

Jim Doyle, president of Level Field Institute, a grass-roots organization founded by retirees of Ford, GM and Chrysler, insists that more American jobs and wealth are created by U.S. nameplate cars than from foreign brands.

"A lot of people think that all cars are the same, but they are not," he said.

PRODUCTION OUTLOOK

Even with only about half of U.S. sales, the Big 3 automakers based in Detroit still employ three-fourths of all U.S. automotive production workers and account for nearly 80 percent of the automotive supply business. With 110,000 employees, GM alone has more production workers than all of the 14 foreign carmakers combined.

"We benefit enormously because these companies are based here and not overseas," Mr. Doyle said.

To improve their competitiveness, the Big 3 are expected to ask for contract concessions from the United Auto Workers union in talks that began this week. UAW President Ron Gettelfinger has sought to minimize such efforts, but in a speech on America's manufacturing future last month he said the industry faces a rough future.

"We are faced with the troubling question of whether the United States is going to continue to have a vibrant auto industry, or instead see it go the way of textiles and electronics," he said.

But Paul Ryan, director of governmental relations for the Association of International Automobile Manufacturers Inc., dismisses such talk. More than half of the vehicles sold under foreign nameplates were assembled in the United States last year at one of the 47 assembly and component parts plants built in the United States by foreign-based car companies, he said.

"We certainly don't want more trouble for Detroit," Mr. Ryan said. "But the automotive industry is a very competitive global business, and it's very hard to call one company a domestic and another a foreign manufacturer at this point."

E-mail Dave Flessner at dflessner@timesfreepress.com

AUTO PRODUCTION GM, Ford and Chrysler expect to sell less than half of all new vehicles in the United States this year, but the Big 3 still employ 75 percent of America's automotive production workers and account for nearly 80 percent of the automotive parts business in the United States.

-- General Motors' 110,000 auto workers is greater than the number of assembly workers employed by all 14 major foreign car companies in the United States.

-- Foreign-based carmakers have invested more than $33 billion in U.S. production facilities and directly employ about 100,000 workers at 47 assembly, component parts and research and development facilities in the United States.

Sources: Level Field Institute, the Association of International Automobile Manufacturers Inc.

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