Power Information Network Reports: Domestic Automakers Continue to Yield Market Share to Asian Automakers

Incentive Offerings Were Down When Compared to the Same Time Period a Year Ago

WESTLAKE VILLAGE, Calif., Jan. 20 -- New-vehicle retail sales were down 11 percent through the first 15 days of January when compared to the same time period a year ago, according to the Power Information Network (PIN), the industry's premier source for real-time automotive retail sales information. The Power Information Network tracks retail sales and market share because they are the most accurate reflection of consumer demand in the marketplace.

GM and Ford retail sales declined when compared to early January 2005 with GM down 28 percent and Ford down 25 percent in the first 15 days of January. DaimlerChrysler was also down 13 percent when compared to the same period in 2005. Among the nine multi-franchise new-vehicle manufacturers, Hyundai and Toyota have had the best retail performance thus far in January. Retail sales for Hyundai were up 19 percent and Toyota Motor retail sales were up 9 percent compared to the first half of January 2005.

In addition to the retail sales increase, Toyota had the highest retail share in the industry for the first 15 days of the month -- up 3.4 points versus a year ago to 18.8 percent. The domestic manufacturers follow Toyota with GM at 17.5 percent (down 4.2 points versus a year ago) and Ford Motor Company at 14.7 percent (down 2.8 points). DaimlerChrysler also saw a decline in the first 15 days of January to 12.8 percent (down 0.3 points). In contrast, American Honda, Nissan and Hyundai have all increased market share versus a year ago, with American Honda at 12.3 percent (up 1.4 points), Nissan at 8.6 percent (up 0.7 point) and Hyundai at 5.7 percent (up 1.4 points).

"The trends haven't changed very much -- the domestics continue to slip while the Asians gain ground," said Tom Libby, senior director of industry analysis at PIN. "To combat this trend, GM, for one, is counting on its aggressive price reductions, which just went into effect on the 11th."

One reason for the overall retail sales decline in the new-vehicle market is that the manufacturers have reduced their incentive offerings. Through the first 15 days of January, the average incentive expenditure per unit was $2,089 -- down 16 percent versus a year ago. Incentives were down 20 percent at General Motors, 12 percent at DaimlerChrysler and 2 percent at Ford Motor Company. Incentives through the first 15 days of January were also lower at the segment level versus a year ago. For example, incentives for sporty, full-size, midsize and compact car categories were all down 40 percent or more versus a year ago, while only SUV incentives were up.

"While retail sales are off to a weak start, fleet sales are expected to pick up the pace and keep January's selling rate for the month roughly in line with last year's 16.3 million unit pace for combined retail and fleet sales," said Bob Schnorbus, chief economist of global forecasting at J.D. Power and Associates. "The slow start to the new year is consistent with what has been happening in the past few years, and thus should not be too surprising. However, it will keep the pressure on automakers to continue returning to aggressive incentive programs in order to pull sales up as the year progresses."

Despite the reduction in incentives, dealer inventories remain reasonable. On average, new vehicles that were sold in the first 15 days of January had been sitting on dealer lots for 59 days-down eight days versus vehicles sold in the same time period a year ago. The average days to turn in the range of 50 to 60 days is considered normal.

About Power Information Network (PIN)

PIN's automotive solutions are based on the collection and analysis of daily new- and used-vehicle retail transaction information from more than 10,000 automotive dealership franchises in North America. PIN's industry-leading automotive solutions incorporate consumer demand and sales information to improve business for automotive dealers, manufacturers, lenders, and other companies in the industry. Additional information is available at www.powerinfonet.com

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 290 offices in 38 countries. Sales in 2004 were $5.3 billion. Additional information is available at http://www.mcgraw-hill.com/.