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Detroit 3 Gains Market Share on Higher Margins

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January 3, 2014 by   Leave a Comment

Charlee Smith said he sees Toyota Motor Corp.’s Camry and Honda Motor Co.’s Accord all over California and their styling makes him think “appliance.” To stand out, he picked a gas-electric hybrid with a grille that evokes British sports cars, buying a Ford Motor Co. Fusion.

“I know it’s an ego or a vanity thing, but I’ll admit: I like it when people turn their head,” said Smith, 63, who works for an adhesive manufacturer between Los Angeles and San Jose. The Fusion “has proven to be everything I wanted in a car.”

Bloomberg reported that Americans are snapping up U.S. cars spanning from Chrysler Group LLC’s Dodge value brand to General Motors Co.’s Cadillac luxury line, highlighting the newfound breadth of offerings in the automakers’ showrooms.

Each of the Detroit automakers entered December on track to gain U.S. market share for the year. They’ve all increased sales faster than the total industry for a calendar year only once in the last two and a half decades — when Japan’s 2011 tsunami wiped out months of Toyota and Honda output — according to the Automotive News Data Center.

Fielding attractive cars such as the Fusion has freed the Detroit Three from the longtime bind of choosing between volume or charging enough for their cars to earn profits on them. Each of the automakers boosted the average selling prices of their vehicles in 2013 as they outpaced a U.S. auto market now poised for a fifth consecutive year of expansion in 2014.

“Prior to 2009, for Detroit it was ‘pick one,’” Bloomberg analyst Kevin Tynan said in a telephone interview. “If you were doing volume, you weren’t doing any kind of pricing or profitability. And if you were doing any kind of pricing, you weren’t getting any volume. It’s all come together now to where they can have it both ways. That’s significant.”

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