Update to the Automotive Impact Matrix, 03.03.2010



Commentary:

What’s moving the matrix?

Market Share Shifting the Story of the Month

The challenges being experienced by Toyota is headlining news for the automotive industry. The primary manufacturers in the industry reported their February sales figures on Tuesday, and those challenges for Toyota became clearly evident.

Year over year, auto sales grew by 13.4% in February, a well received stat for the general economy and the manufacturing industry in general. Looking at the individual company performances, the loss of market share at Toyota (lost 12.8% share) became evident:

Toyota -9%
Ford +43%
GM +12%
Nissan +32%
Hyundai +11%
Honda +13%
Chrysler + .5%

The US marketplace used to provide nearly 18 million in annual car sales. Despite what appears to be a strong year-over-year performance by the sector – analysts are still a bit concerned deep down. The industry is still only expected to produce sales of 10.5 million vehicles in 2010 – less than the number of vehicles that will be sold in China.

The impact of the automotive industry on the general US economy is massive. More than 4 million US jobs are tied directly to the automotive industry and nearly 10 million are tied indirectly. The multiplier effect for the industry is significant – and given the amount of taxpayer funds pumped into GM and Chrysler, their health is a better situation for the US taxpayer.

For transportation, the movement of vehicles is a welcome sign. Parts sourcing have helped improve the regional economies of hard hit areas of the country and the activity at Ford specifically, is exciting for the industry and US autoworker. Transportation companies will continue to find some important increases in volume across the board from the industry if it can keep this momentum up.

However, there are enough concerns about the US consumer and the lending industry to keep just a little caution in line. For that reason, all of the elements of the matrix are “black” – or more of a neutral condition. If the trends continue in the sector and growth is evident – those elements will move to green and we will project continued improvement for the sector and a more positive impact on the transportation industry.

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