After many months of losing market share, domestic automakers rallied for a brisk start in 2013.
January 2013 will go down as the best start to a year since 2008. The US market was up 14.3%, lead by Detroit’s 18% gain over last January.
Here comes the caveat: January percentage gains and losses are magnified by a small base of volume, since the month is typically a low point in sales for the year. That said, the SAAR (seasonally adjusted annual sales rate) topped 15M for the third straight month, a sign that pacing is still strong.
Here are some keys for your local retail market:
1. A Detroit Rally?All three domestics were up double digits versus January 2012.
Though Toyota continues to set the pace for the US market (+26.6%), Detroit’s performance in January marked the first time in about a year that all three domestic automakers outpaced the market. A year ago, Asia-Pacific brands held a 15,000-vehicle advantage over their domestic competition. This January, the Big 3 recaptured the edge by a narrow 7,800 vehicles. Ford set the pace at home with a 21.6% gain.
The strong performances of the Big 3, Toyota, and Subaru (+21.3%) offset smaller gains by Honda, Hyundai-Kia, and VW.
2. Cars & TrucksThis trend might be worth watching in 2013.
Japanese brands dominated the Top 10 list for passenger vehicles, owning five of the top six positions (Camry, Accord, Corolla, Civic, Altima). Conversely, domestics continued to drive light-truck sales, holding seven of the top eight positions (F Series, Silverado, Ram Pickup, Escape, Equinox, Explorer, Sierra).
This could play a role in 2013 momentum, depending on which way the car-versus-truck pendulum will swing for the car shopper. Gas prices can certainly play a role here. We’ll keep an eye on this trending.
3. The Race for 7th PlaceYes, 7th place. That’s not a typo.
Consider this: There are really two sets of “Big 3s” (GM-Ford-Chrysler in the US; and Toyota-Honda-Nissan in Japan) that have distanced themselves from the pack by a wide margin. Korean automakers Hyundai and Kia continue to establish themselves in the 7-spot, in a range of volume approaching the Big 6. But the Korean auto sales growth rate has slowed in the US Market recently.
And that’s were a group of highly competitive, middle-volume automakers continue to duke it out. Will VW, BMW, Daimler, or Subaru (all coming off strong years) accumulate enough share to provide a consistent volume challenge to the Big 6? If so, it’ll probably be VW or Subaru, both of which are showing strong pacing recently, and have active dealers who can play the volume game. VW also has the advantage of a large scale global auto operation. Keep an eye on this in your local market.
Will domestic brands continue to recapture the share they lost in 2012? Will they do so on the strength of light-truck sales, or will the consumer look for more efficient vehicles in 2013? And will the overall growth rate / SAAR slow down as we head deeper into the year?
Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.