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A couple of decades ago, America's auto market seemed cleanly divided, with Detroit brands on one side and foreign makes on the other. Many of our parents and grandparents laughed at the thought of buying a Toyota or a Volkswagen, convinced that those companies would never last. Some of them still see things that way.
But according to research firm IHS Automotive, the situation is vastly different now. It's true that Detroit brands still hold a slight edge with U.S. consumers, but competition is stiff, and it's not going to get any easier for car companies.
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In this century alone, America's automotive landscape has changed dramatically. Consider this: in the year 2000, General Motors held a whopping 28.2 percent of the U.S. auto market, with Ford following close on its heels at 24.1 percent. Chrysler (then DaimlerChrysler) was further back, but still in third place, with 15.7 percent market share. Among the eight top-selling brands, Toyota came in fourth with 9.3 percent of the U.S. market and Hyundai brought up the rear at 2.3 percent.
Fourteen years later, GM is still America's #1 brand, but it's lost nearly 11 percent of the market: the company now accounts for 17.6 percent of U.S. auto sales. Ford is still #2, but it's given up nearly ten points, falling to 14.7 percent. Coming in at #8 is Volkswagen, which owns 3.3 percent of the market -- not terrible, but certainly not as impressive as Hyundai, which has surged to 8.1 percent.
In other words, America's auto market still isn't evenly divided between GM, Ford, Toyota, Fiat Chrysler, Honda, Nissan, Hyundai, and Volkswagen, but the gaps between them are narrowing.
What does that mean for automakers? According to IHS' Tom Libby, car companies realize that they can't rest on their reputations. They have to be extremely proactive, developing new models that consumers will want and marketing them to within an inch of their lives: "[E]ach [automaker] 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".
What does that mean for shoppers? Though it seems as if the pressure to succeed would lead automakers to play it safe and innovate less, Libby insists that consumers still win big: "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."
That said, IHS analysts don't see the top four spots changing hands anytime soon. GM will remain the best-selling automaker in the U.S., followed by Ford, Toyota, and FCA -- at least for the next few years. After that, who can say?