Chrysler division head Dieter Zetsche reportedly said on Monday he sees a rough road ahead for Detroit’s automakers as foreign rivals, especially from Asia, step up their assault on the US market.
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“No matter how tough anyone might think this business is today, it’s going to get tougher still,” the Chrysler president and chief executive said in an address to the Detroit Economic Club, according to Reuters.
Alluding to mounting pension and health care costs, Zetsche reportedly noted that most discussions about Detroit’s traditional Big Three automakers these days inevitably seem to end “with some harbinger of doom.”
Zetsche said the Big Three were still in a position to fight back, and meet competitive challenges through innovation and the building of best-in-class products, Reuters said.
But he reportedly stressed that the domestic auto industry faces some stark realities: “Last year the combined (US market) share of North American automakers dropped to a new low of just 58.7%, or less than six of 10 new vehicle sales.”
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By GlobalData“Year-to-date we are at just 56.4% share. And if the stated share goals of Asian manufacturers are realised – even if only in part – this trend will continue,” he said, according to Reuters.
The news agency noted that General Motors alone enjoyed a 52% share of its home market in the early 1960s while its share stood at just 25% at the end of last month. Chrysler, buoyed by the success of its 300 sedan, was alone among Detroit’s automakers in managing to carve out a slight increase in U.S. market share last year as GM and Ford both lost share.
Zetsche reportedly acknowledged that “one year of good performance is no trend,” and warned that cars built in China’s low-cost labour market will soon be sold in North America, adding to already fierce competition for the industrial icons of Detroit.
“It’s only a matter of a few years or less until we see Chinese automakers here,” he warned, according to Reuters.
“That’s a frightening prospect,” he added, according to the report, saying Chinese automakers could become serious competitors in the US car market as soon as five years from now.
