Automotive Industry

On June 11th, John McCormick (1) said that the auto industry’s decline is a consumer opportunity. With the bankruptcies of Chrysler and General Motors and the spectacular collapse of the new car market, America's automotive industry and its consumers have an unprecedented opportunity. It's a chance for a dramatic resetting of the American automotive scene, a chance finally to bring the U.S. vehicle market more in line with the rest of the world and in keeping with global realities. Today, amid all this upheaval in the auto business, millions of potential new car and truck buyers sit on the sidelines, worried, confused, looking for guidance and confidence that they are shopping for the vehicle that best suits their needs.

The US automotive industry behaves like a 9-player market with 8 major players plus all other. The shares (2) of the 8 major players at market equilibrium follow: Number 1 = 31.4%, Number 2 = 20.3%, Number 3 = 14.8%, Number 4 = 11.1%, Number 5 = 8.3%, Number 6 = 6.1%, Number 7 = 4.2%, Number 8 = 2.6%, Other = 1.2%, Total = 100%.

By the end of 2009, actual market share data will be different because the market will not be at equilibrium. Since the Market Value Metric is the only metric that correlates with future market share and profitability, the major automotive companies are well advised to determine the market value of all offerings for each market segment and manufacture products that best fulfill consumer needs. Now is the time for knowledge-based innovation and marketing communication.


(1) Detroit News, Article 20090611
(2) Kesting Ventures Corp., Literature, Rank Order Principle