Buying American is becoming a trend

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Updated: February 10, 2012 1:27PM

The American auto industry continued a slow but substantial recovery in 2011. Sales of light vehicles, which include cars, pickups, SUVs, crossovers and vans, rose 10 percent last year to nearly 12.8 million units.

The domestic manufacturers – General Motors, Ford Motor Co. and Chrysler Group – all gained market share for the first time since 1998. The losers were the Japanese manufacturers Honda and Toyota, both of which were hit hard by two natural disasters. An earthquake and subsequent tsunami in Japan in March halted production, and flooding in Thailand that started in July shut down suppliers. Toyota lost 1.4 points of market share to fall to 12.6 percent and Honda dropped 1.6 points to 8.8 percent.

Here is a look at how domestic automakers fared in 2011 and what their opportunities are for 2012.

Chrysler Group

Chrysler was the biggest domestic winner in 2011, mostly because it fell the furthest in the wake of its 2009 bankruptcy. In fact, Chrysler was the fastest-growing automaker in the country, gaining more market share than any company.

As a whole, Chrysler Group picked up 1.3 points of market share and 1.7 points of retail share. The latter figure excludes fleet sales to rental agencies and government and commercial fleets. Chrysler finished the year with 10.7 percent of the market.

Chrysler Group sales were up 26 percent, and the company has enjoyed 21 consecutive months of year-over-year sales growth. The Chrysler brand improved 12 percent, Jeep gained a healthy 44 percent, Dodge was up 18 percent and Ram improved by 21 percent.

President and CEO of Dodge and head of U.S. sales for Chrysler Group Reid Bigland said the main reason for the success in 2011 was improved products.

“This business is all about product. It’s about building products that consumers want to buy,” said Bigland, noting that Chrysler’s two biggest stars were the refreshed Jeep Compass, which was up 200 percent, and the redesigned Grand Cherokee, which gained 51 percent.

While all Jeeps sold well, other big winners were the Chrysler 200, up 126 percent over the Sebring it replaced; the Dodge Avenger, up 26 percent; and the Dodge Durango with some 51,000 sales after skipping the 2010 model year.

Bigland noted that Chrysler enjoyed its sales growth without a competitive compact car. The Dodge Caliber has been panned by automotive critics since its release, but it’s about to be replaced by a Dodge Dart that raises the bar for quality.

“The compact car represents about 15 percent of the U.S. market. When you look at our growth in 2011 in many respects we achieved it by only competing in about 85 percent of the market,” Bigland said.

As for 2012, Bigland thinks the industry will continue to grow: “The industry has been, in my view, a Goldilocks industry. Not too hot. Not too cold. Growing at about 10 percent is a nice clip. I think in 2012 we’ll grow 7 to 12 percent, from an industry perspective. At Chrysler we’ll keep pace with the growth, if not outperform it.”

Ford Motor Co.

Due to the wind down of Mercury, Ford didn’t gain as much market share as its domestic rivals, but it did increase share for the third year in a row. Ford was up only 0.1 percent, but it lost almost 100,000 Mercury sales, or about 0.7 percent of the market. Total company share was 16.5 percent, with Ford gaining 0.8 percent and Lincoln staying flat at its 0.8 percent share.

Sales for the Ford brand were up 17 percent, while Lincoln lost 0.2 percent. Ford’s U.S. sales analyst Erich Merkle noted several cars that helped with Ford’s increase. They included the Fiesta, which sold some 68,000 units in a market in which Ford didn’t compete the previous year; the Ford Fusion, which was up 13 percent; the Explorer, which gained 126 percent after being redesigned as a crossover; and the Escape, which was up 33 percent while riding the wave of the hot compact utility market segment.

Merkle sang a familiar refrain about product quality: “It’s about not only your ability to put product into the market at a strong pace, but it’s also the quality of the product.” Vehicles like the Explorer, Focus, Fiesta and Fusion have all been well received by auto critics and, judging by sales, the buying public.

Merkle sees sales in 2012 coming in between 13.2 and 14.2 million units, and Ford has some opportunities to gain share again. A new Fusion with an attractive look and premium feel is due this fall. A new Escape is coming sooner, and while it may not sell more than the current one, it will likely sell for higher prices. Merkle also said Ford can gain market share on the coasts, where buyers tend to prefer foreign cars. Vehicles like the Fiesta, Focus and forthcoming Escape are taking on a more European feel.

General Motors

GM gained market share for the first time since 2002. In total, it was up 0.5 percent in 2011 to 19.2 percent on sales that were up 14 percent. Chevrolet gained 0.5 percent market share, with sales rising 14 percent. GMC market share was up 0.3 percent and sales increased 19 percent. Buick increased its share 0.1 percent and sales 14 percent. Cadillac was the only brand that didn’t gain market share. It remained at 1.2 percent with sales increasing a modest 4 percent.

General Motors’ financial and sales communication manager Jim Cain also noted that GM’s retail market share was up 0.8 percent to 17.6 percent. Again, that excludes fleet sales.

Cain said GM’s success in 2011 was due to new products like the Chevrolet Cruze and Buick Regal, but also strong showings from products that were last redesigned a few years ago. Specifically, the GMC Acadia had its strongest sales year ever; the Chevy Equinox and its sister the GMC Terrain were up 29 and 37 percent, respectively; the Cadillac CTS was up 21 percent; and the Chevy Colorado was up 26 percent.

The Cruze was the star of the show in 2011, with sales up 81 percent over the combined total of the Cruze and the car it replaced, the Cobalt, in 2010. The Cruze also was much more profitable for the company, with an average transaction price of more than $19,000 versus the Cobalt, which sold for less than $16,000.

As consumers continue to feel better about the economy and employment improves, Cain sees continued growth in 2012. He says the down-market of the last few years has left a lot of pent up demand. General Motors is projecting 2012 sales of 13.5 to 14 million units. Cain said new models could help raise GM’s market share further or at least in their segments. He pointed to the Chevrolet Sonic and Malibu, Cadillac ATS and XTS, and Buick Verano as GM’s greatest opportunities in the coming year.