The battle for market share among the largest eight automakers in the U.S. has never been greater as the range between them continues to narrow, a report from IHS Automotive said today.
General Motors and Ford Motor Co. have continued to occupy the top two spots over the last 14 years, but their lead has narrowed significantly as Toyota moved into the No. 3 spot ahead of Chrysler, now called FCA US.
Using registration data, IHS said GM’s market share since 2000 has fallen from 28.2 percent to 17.6 percent through October of this year, while Ford has fallen from 24.1 percent to 14.7 percent.
Toyota has risen from 9.3 percent to 14.5 percent while FCA, known as DaimlerChrysler in 2000, went from 15.7 percent down to 12.7 percent.
But with more major players competing in the market, the gap between GM and the No. 8 automaker -- currently Volkswagen -- has declined from 26 percentage points to 14 points as of October.
“With no manufacturer accounting for more than 18 percent of the U.S. market, the battle for consumer share will be fought on the marketing front more than ever before,” the IHS report said.
Out of the top eight automakers, GM lost the most share since 2000 -- about 10 percentage points. Hyundai gained the most share, jumping from 2.3 percent in 2013 to 8.1 percent by October 2014.
IHS forecasts no changes in rank and only slight changes in share among the top four automakers for the next three to four years, Tom Libby, an IHS solution consultant who worked on the research, told Automotive News.
With GM and Ford launching more competitive products than they were 20 years ago, it’s “less likely that they’re going to lose share,” Libby said. Nearly 17.5 million vehicles were registered in 2000, while IHS Automotive forecasts that U.S. sales will reach 16.7 million units in 2015.
Next year, automakers would need to sell an additional 167,000 units to gain 1 percentage point of share. In the middle of the recession in 2009, they only needed to sell 104,000 more vehicles to gain a point of market share, IHS said.
“Since no OEM wants to slip in the rankings, each is doing everything possible to retain each tenth of a point share; including speeding up product redesign or launch programs, while opting to avoid risky product programs that could cause disruption in their product portfolio,” Libby said in the statement.
Competition between automakers for market share will push them to use the most effective marketing tools with TV and print advertisements, along with digital advertising tools, the statement said.
“These conditions drastically improve the value proposition for consumers shopping for new vehicles, with greater competition, more refreshed products and increased pressure on prices, which contributes to strong retail demand,” Libby said.
The tight race for market share is “the new normal” for the U.S. automotive market, the statement said.
“It’s a more wide-open situation with each manufacturer really having a significant position in the market,” Libby told Automotive News.