Maroone: Japanese will regain share
Maroone: Tough competition
Don't expect Japanese-brand inventory to return to normal until summer, AutoNation Inc. executives say -- but do look for Toyota and Honda to start regaining some of the market share they lost in 2011 after the Japanese earthquake last March crippled production.
Replenished stocks will set up the U.S. market for an intensely competitive sales environment in 2012, AutoNation COO Michael Maroone told Automotive News last week after the country's largest dealership group reported record profits.
The nation's largest auto retailer reported net income of $69.4 million for the fourth quarter, up 3.1 percent. Full-year net income rose 24.2 percent to $281.4 million.
"I don't think there's any question that Toyota and Honda will regain some share," Maroone said. "And I would guess that the domestics that benefited will give up a little bit."
Jackson: No incentive war
AutoNation CEO Mike Jackson said Asian and domestic brands will equally share 90 percent of the market, with Europeans taking the balance.
In 2011, domestic brands finished the year with 46.9 percent of the market, an increase of 1.8 points, according to the Automotive News Data Center. Japanese and Korean brands had combined share of 43.8 percent in 2011. Japanese brands lost a collective 3.7 percentage points of share for the year.
But don't look for a price war. "No one is going to do anything crazy with incentives," Jackson said.
Depending on the sales rate, Toyota inventories should be back to normal between March and May, Maroone said. But for Honda, which was more affected by flooding in Thailand last fall, it will probably be summer before stocks fully return to normal.
AutoNation estimates U.S. sales will rise more than 10 percent to 14 million vehicles in 2012. The market is on its way back to sales of 16 million vehicles, Jackson said.
The recovery is driven by three things, he said:
1. Replacement need because of aging cars on the road. Today's average vehicle is 10.8 years old.
2. Lots of new and exciting vehicles.
3. Good availability of credit.
Maroone said access to credit is back to pre-2008 levels. "The environment is very strong. We're seeing a plethora of vendors coming into the market, whether subprime or prime," Maroone said. "The winner is clearly the consumer."
But the economy remains uncertain, Jackson said, and the U.S. auto industry needs to see all three of those drivers stay healthy to keep the sales increase on track: "If one of them wobbles, it's going to be a problem."
You can reach Amy Wilson at firstname.lastname@example.org.