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Market trends: Larger manufacturers are weathering the storm

With so much concentration on month-to-month sales falls (inevitable given the current economic turmoil), it is easy to lose sight of the bigger picture. Hence, instead of looking at what has happened in the last month or the last year, it is worth comparing where car manufacturers are now to where they were five years ago (see table below).

Looking at the best-performing manufacturers, there is a strong Korean flavour. Kia is one of only two manufacturers to have actually increased sales, while Chevrolet (formerly Daewoo) and Hyundai are also in the top four. 

However, arguably the best performance comes from Audi, given that it is not exactly a new brand. Indeed, this table shows why Volkswagen is currently the world’s most bullish car company, with its four mainstream brands comfortably outperforming the market as a whole. 

Among the other successful manufacturers are Mazda, thanks to its revitalised model range, and Ford, which has grown its market share by over two percentage points.

Below the line, as it were, are some surprising names. Fiat, recognised as a worldwide recovery story, has fallen faster than the market over the last five years.

The 500 has been a great success, but the Punto has lost more sales than the 500 has gained, while the Bravo has had very little impact. It is no wonder Fiat was so keen on getting hold of the new Astra and Insignia platforms.

It is also interesting that the downturn has affected the smaller players more than the larger ones. 

With the exception of Alfa Romeo, which was in a terrible state in 2004, and Smart, which is a unique niche player, almost every manufacturer that sold less than 10,000 units to this point in 2004 has fallen more than the market average. 

Daihatsu, Proton, Mitsubishi, Subaru – it does not seem to matter which part of the market they operate in. As the big boys have been fighting for every sale with increasing ferocity, the small players have been squeezed like oranges.

The scrappage incentive may encourage a few more mature buyers to trade in their old models for a new Daihatsu or Proton, but that is hardly a sustainable basis to run a car importer.

Even Lexus, once seen as the advanc-ing luxury brand, has only just out-performed the market, despite a raft of new models. Lexus is rightly seen as a strong company, but even it is being squeezed by the big prestige players. 

No wonder there is so much talk of mergers and consolidation – big really does seem to be beautiful right now.

Changing Manufacturer Fortunes June 2009

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