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Asian Automakers to Dominate U.S. Market?

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April 23, 2009 by   Leave a Comment

While no one seems to know when the current economic recession will hit bottom and begin the slow bounce back, indications are that when it happens, it will be a vastly different landscape.

According to a report Wednesday (April 22) in Automotive News, Michael Robinet, vice president for global vehicle forecasts at CSM Worldwide, Detroit, Mich., said it will take three to four years for North American auto production to recover to pre-recession levels. And when it does, Detroit automakers will only be filling 45% of the total. As recently as 2000, the “Detroit 3″ – General Motors Corp., Ford and Chrysler – produced more than 75% of all vehicles built in North America. 

The “Asian 4,” Toyota, Honda, Nissan and Hyundai, are seen as likely beneficiaries of the change in production from traditional domestic OEMs. 

Robinet’s comments were voiced during a meeting of the Detroit Regional Economic Partnership.

The executive also noted that the industry will downsize its offerings in order to meet federal fuel-economy requirements, with the strongest product segments forecast to be subcompacts, compacts and mid-sized vehicles. 

“We are going to start driving more appropriately sized vehicles,” he said.

While much of Robinet’s statements were directed at the North American market, he also noted that the current recession is having a worldwide impact. According to Robinet, automakers built vehicles at an annualized rate of 74 million units in January 2008; in January 2009, that rate fell 42%, to 43 million units. The dramatic decline has led to an industry capacity utilization rate of approximately 60%, far below the 80% to 85% rate Robinet said was required for automakers to operate profitably.

Nearly one-quarter of the way through the 2009 year, North American production (U.S., Canada, Mexico) has fared even worse. Through April 18, North American car and truck production totaled 2,237,575 units; through April 19, 2008, that year-to-date figure was 4,345,178 vehicles. Total U.S. production is down by more than 54%, 1,401,424 versus 3,051,203 units.

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