Led by the likes of Toyota and Nissan, southeast Asian auto makers grew both sales and share in the US last year and the trend is expected to continue in 2004. The Big Three will look to respond with revamped car ranges, but the next big wins for the Japanese could be in the truck segment.

The traditional domestic dominance of American manufacturers is facing a serious challenge as Asian manufacturers, led by Toyota, continued to gain ground in the US market, amassing a record 31.3% market share in 2003 with unit sales up by 3.1%.

Ford, General Motors and Daimler Chrysler still control more than 60% of the US passenger vehicle market, but while they have been focusing on more profitable trucks and SUVs, their share of the car market has fallen to less than half. Chrysler Group, the best performer amongst them, saw its car sales falling by 3.9% in 2003. Ford and GM’s car sales fell respectively by 12% and 5.2%.

Recent attempts by the Big Three to enhance their sales through the use of customer incentives, at the risk of slashing their profit margins (Ford being a case in point), have not been enough to prevent the ineluctable advance of their Asian counterparts.

More attractively priced than their US rivals, Asian cars – especially Japanese ones – are meeting customer’s expectations in terms of quality, style and innovation. While keeping incentives in general well below the level of their US rivals, Asian manufacturers should continue to expand in the next few years, consequently preventing European manufacturers from building much market share.

However, 2004 could still have its upside for the Big Three. Forecast economic improvement and a new and redesigned product line-up should improve US manufacturers’ performance in the car segment while rivals such as Toyota and Honda, despite expanding their dealer network, are unlikely to have a great deal to offer in the way of new products.

Asian manufacturers’ next battle with the US auto giants is expected in the truck market. Toyota and Nissan have already started targeting the large-size pickup segment. Judging by their progress so far, there is no reason why these manufacturers cannot replicate the success they have had with the US car market in the truck segment as well.