United States Autos Report Q1 2008

The collapse of the housing market and resulting credit restrictions have taken their toll on US new vehicle sales, prompting BMI to revise its sales estimate for 2007 downwards. In November 2007, overall sales fell by 1.6% for the month and 2.4% for the first 11 months of the year. Light trucks led the decline in November, falling by 7.4% while passenger car sales were up by 5.5%. For the year to November passenger cars fell by 2.6% and trucks by 2.3%. Imported brands outperformed the market, however, with sales for the month down by just 0.7% and up by 3.1% for the year-to-date.

BMI now expects sales for the year to have dipped to 16.175mn units and we expect sales to remain on a downward trajectory in 2008. With savings also likely to be hit by the economic scenario in the US, most forms of vehicle financing have been impacted and we would expect it to take until at least 2009 for marginal growth to be achieved. Total local sales are therefore forecast to register 15.7mn units in 2008 and recover to around 16.7mn units by 2012. Against a backdrop of continued gradual declines in production, imports are likely to continue taking up the slack.

The bleak outlook has not deterred carmakers from investing in the US though, particularly in the commercial vehicle segment. Nissan and Suzuki have built on an earlier production agreement, with the news that Nissan North America will build a pick-up truck for Suzuki from 2008. Based on Nissan's own Frontier mid-range truck, the model will be built at Nissan's plant in Smyrna, Tennessee and sold by Suzuki's North American division. Meanwhile, Japan's Hino Motors has scored a first for the truck segment, opening the first vehicle production facility to be based in West Virginia. The first truck rolled off the line at the Hino Motors Manufacturing USA plant after a US$6.8mn investment to renovate what was once a wire and cable management and distribution company.

Increased investment by overseas manufacturers in the US is reflected in the competitive landscape.

While all of the US Big Three registered a decline in sales for the year to November 2007, Japan's own major trio of Toyota, Honda and Nissan posted growth of 3.6%, 3.1% and 5.5% respectively. The performance kept Toyota in second place with a market share of 16.24%, ahead of Ford on 15.91%. For the moment, General Motors (GM) looks comfortable at the top with 23.73%, but after sales fell by 6% in the year to November, it will need its turnaround plans to be successful to stay there.