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Libby called the weak lend-ing environment yet “anotherheadwind” for Detroit’s auto-makers, which first saw theirretail share of the U.S. marketfall under the 50% mark in thesecond quarter of 2006, as gasprices started to rise and con-sumers began rejecting the bigSUVs and pickups for whichDetroit has been best known.

Detroit’s latest retail mar-ket share performance is asign, Libby said, of the incred-ible challenges local automak-ers face in the suffering econo-my.

That includes, he said, per-ceptions of subpar quality, alack of fuel-efficient subcom-pacts and hybrids, too manybrands and dealerships andnew vehicle lineups that aren’tas fresh as competitors’ — notto mention higher labor costsrelative to foreign automak-ers.

“It’s disappointing … shock-ing,” Libby said of Detroit’smarket share results. “But it’s

just a continuation of whatwe’ve seen.”

PIN provides quarterly re-tail market share estimatesfor the United States exclu-sively to the Free Press.

Retail sales are those madedirectly to consumers in deal-er showrooms, and they ex-clude fleet sales to rental carcompanies, businesses andgovernments, which are typi-cally sold at a volume discount.Industry experts view retailsales as one of the best mea-sures of demand and future fi-nancial performance becausethey are generally more profit-able.

Automakers release onlytheir overall sales results,which combine retail and fleetperformance. So, PIN pro-vides its own estimate of retailperformance based on trans-action data from more than7,000 dealership franchises.

A fast decline in market shareIn all, Detroit’s automakers

lost a combined 5 percentagepoints of market share in the

third quarter, compared to thesame period a year ago, ac-cording to PIN. That is thefastest year-over-year declinein two years.

During the July-Septemberperiod, U.S. market share de-clined:� One percentage point forGeneral Motors Corp., to21.4%.� Two percentage points forFord Motor Co., to 11.6%. � Two percentage points forChrysler LLC, to 8.9%.

Every 2 percentage pointsof annual retail market shareis about the equivalent of oneassembly plant’s full produc-tion for the year.

That means Detroit’s auto-makers have two to threemore assembly plants thanthey need if the losses are sus-tained all year, as they havebeen.

Despite the declines, GMremained the No. 1 automakeramong customers during thethird quarter.

Toyota Motor Corp., whose

retail share performance wasalmost flat compared to a yearago, was No. 2 with 18% of themarket.

American Honda was No. 3,followed by Ford and thenChrysler, which now appearsin danger of losing its No. 5spot to Nissan Motor Co.

Impact of credit environmentAs the credit crisis in the

United States has worsened, afew auto dealers told the FreePress that the weaker eco-nomic quality of Detroit’s cus-tomers might be playing a rolein Detroit’s faster-than-nor-mal decline.

Dealers nationwide havereported troubles getting fi-nancing approved for somewould-be car and truck buy-ers, especially at good interestrates.

One mega-dealer, who didnot want his name used in thisreport for fear of retributionfrom Detroit’s automakers,said that the credit situationfor Detroit-brand customers,

in particular, has deterioratedas the truck side of the autobusiness has shriveled.

“The truck business at-tracts a nice customer base,”he said. “The car buyer of do-mestics is a ‘get-me-done’ buy-er.”

Art Spinella, president ofCNW Marketing Research inBandon, Ore., said Detroitbrands have attracted cus-tomers who are less credit-worthy for decades now, andhe had little doubt that is hurt-ing Detroit’s sales even morein the tough economic climate.

“There is far more middlingdemographics for GM, Fordand Chrysler,” said Spinella,whose company collects datafrom 6,500 U.S. car dealer-ships, insurance companies,banks and state tax depart-ments.

He added that Detroit-brand buyers also have “lowerconfidence levels” than cus-tomers who buy importbrands.

Dealer disagreesNot everyone agrees with

this view, however.Joe Serra, a mega-dealer

based in Grand Blanc whoowns 21 import and domesticdealerships in six states, saidhe has not seen a correlationbetween brands and credit-worthiness.

However, he has seen an in-crease in buyers who are pay-

ing for their vehicles in cash.“We’ve seen a lot more cash

buyers,” he said. “They’re tak-ing it out of their savings. … Inthe past, people would fi-nance.”

Of course, only customerswho have access to substantialsums of money can lay down$20,000 or more in cash for acar.

The median household in-come for all automotivebrands in the United States is$65,877.

But Chevy, Ford and Dodgehave buyers who average un-der $61,000 for median house-hold income.

By contrast, Honda, whichgained the most retail marketshare during the third quar-ter, has customers who are fi-nancially stronger than the in-dustry average.

Honda, which has been astrong performer all year withits fuel-efficient car lineup,picked up 2 percentage pointsof market share in the thirdquarter, for 13.5% of the mar-ket.

The company’s volumeHonda brand has buyers witha median household income of$67,691, according to PIN.That is more than 10% higherthan the average Ford, Chevyor Dodge buyer.

Contact SARAH A. WEBSTER at313-222-5394 orswebster@freepress.com.

RETAIL SALES �Detroit 3 marketshare down

From Page 1A

“It’s disappointing … shocking.But it’s just a continuation of

what we’ve seen.”TOM LIBBY, senior director of industry analysis at the Power In-

formation Network, about Detroit’s market share results.

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