Detroit increases U.S. share in 2013 as optimism grows

Ford sold 270,872 Fusions in the U.S. through November, a gain of 22 percent over the same period last year.
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DETROIT (Bloomberg) -- 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."

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.

'Both ways'

"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."

Results for 2013's final month, to be released Friday, are projected to show U.S. car and light truck sales in December climbed 3.8 percent to 1.41 million, the average of nine estimates in a survey by Bloomberg News. That would push deliveries for the full year to more than 15.6 million -- the most since 2007.

The industry probably will end the year with a monthly annualized sales rate, adjusted for seasonal trends, of 15.8 million, the average of 14 December estimates, from 15.2 million a year earlier. November's pace of 16.4 million was the best since February 2007, according to researcher Autodata Corp.

Ford vs. Toyota

Leading the way for Detroit last year was the Ford brand, which extended its sales lead over the Toyota line on the strength of Fusion and its F-Series pickups.

Ford said this week that it expects to sell more than 2.4 million Ford brand vehicles in 2013, up from 2.16 million a year earlier. Analysts project that deliveries of Ford and Lincoln brand vehicles for the company increased 4.3 percent in December, the average of nine estimates.

The Ford brand's lead over the namesake for Toyota was 388,825 light vehicles entering December, according to Autodata. The Toyota line trailed Ford by 322,521 in 2012.

Americans paid $34,164 per vehicle from Ford and $34,869 per car and truck from GM last year, according to research by Kelley Blue Book that includes preliminary data for December. Compared with the industry average, that equates to a premium of $2,118 per Ford Motor model and $2,823 for each GM vehicle, Kelley Blue Book said. Chrysler's transaction prices rose at a faster rate than the industry to pull within $100 of the average.

$60,000 looks

The gains by Detroit are striking Toyota and Honda in the hearts of their lineups. Deliveries of Ford's Fusion climbed 22 percent from January to November, outpacing gains of 1.3 percent for Camry and 11 percent for Accord. And Fusions sold for an average of $26,378 last year, a premium of $897 to Accord and $2,224 to Camry, the lock to be the top-selling car in the U.S. for a 12th consecutive year.

"From so many views, it shouts out 'I'm a $60,000 car,'" Smith, the Californian, said of the white-platinum Fusion hybrid that he bought for $33,500. "The Aston Martin look really draws attention."

The Fusion is a standout in a crowded field of more competitive passenger cars from Detroit. Deliveries of GM's Cadillac cars jumped 55 percent last year through November, and Chrysler's Dodge line of cars boosted sales by 31 percent. Those were the two biggest gains of any car brand with at least 20,000 deliveries last year.

Share gains

Sales probably rose 8.4 percent for Chrysler and 1.5 percent for GM, the averages of analysts' estimates.

On Wednesday, Italy's Fiat S.p.A. reached an agreement with a UAW retiree medical trust to buy the shares of Chrysler it doesn't already own. Fiat is paying $3.65 billion for the Chrysler shares and Chrysler is paying another $700 million to the trust in four installments, making the total deal worth $4.35 billion.

GM would eke out a market share gain of less than 0.02 percentage point based on analysts' projections for its sales and those of the industry. Ford entered December with an increase of almost 0.5 percentage point, the industry's largest advance, and Chrysler's share had risen by about 0.1 point.

The U.S. automakers are arguably going for their first sweep of market share gains since 1988. While Ford reported a market share gain in 2011, its calculation excluded year-earlier sales for the Volvo brand, which it owned for the first seven months 2010. If Volvo deliveries from before Ford's sale of the brand to China's Zhejiang Geely Holding Group Co. are counted in its 2010 results, Ford's share slipped from 16.9 percent to 16.8 percent in 2011.

Toyota, Honda and European carmakers including Volkswagen AG will test Detroit's growth this year. Automakers plan to add 2.1 million vehicles of incremental capacity in North America after 2013, with almost all of the output being added by Asia and Europe-based companies, IHS Automotive said last month.

December estimates

Sales probably rose 3.1 percent for Toyota and 4.1 percent for Honda in December, according to the averages of seven analysts' estimates. Sales probably increased 13 percent for Nissan Motor Co. and 7.2 percent for affiliates Hyundai Motor Co. and Kia Motors Corp., the analysts projected.

A potential challenge for the broader industry will be to maintain pricing as additional production capacity comes on line, especially since inventory has climbed in anticipation of the first year of at least 16 million light vehicle sales since 2007. Industrywide supply of passenger cars rose to 1.8 million at the beginning of December, the highest monthly total since March 1996, according to Automotive News Data Center.

"If you believe sales next year are going higher, and that we're going to come into a very robust spring and summer sales cycle, a lot of the inventory concerns that are out there will dissipate very quickly," Erich Merkle, Ford's sales analyst, said in a telephone interview.

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