Look for More Models in the Mix

Competition has grown so fierce in the U.S. automotive market that it appears there are more vehicles up for grabs than ever before.

Toyota Motor Corp. and Honda Motor Co. Ltd. have chipped away at the Big Three by gradually entering new segments, but now they have to look behind them as upstarts such as Hyundai Motor Co. Ltd. and Kia Motors Corp. forge new ground for themselves in light trucks and upscale cars.

Luxury auto maker BMW AG has a hot-selling cross/utility vehicle (CUV) and is planning to expand its light-truck and car offerings, while Volkswagen AG and Porsche AG are about to unleash their own high-priced crossovers.

Next year Nissan Motor Co. Ltd. raises stakes again with its first-time large SUVs and pickups, the last segments to be bastions of the Big Three until Toyota got serious with its Tundra pickup and Sequoia SUV.

Yet, the number of '03 models on sale in the U.S. is pretty much the same as it was 10 years ago. While others were expanding their lineups, the Big Three were contracting. In 1993, the non-Big Three companies averaged a 23.0% share in each of the major segment groups (because the CUV segment group was not started until Toyota's RAV4 entered the market in 1996, it was combined with the SUV group for this analysis). Since then, their share has risen continuously, reaching 36.4% through the first nine months of 2002.

Although the increase can be traced to Big Three market share losses over the period, it's also indicative of how much once- small-volume and niche auto makers have expanded outside their traditional realms. Most overseas-based companies were relegated to narrow parts of the industry such as small cars or luxury cars, and forays into other segments never posed a threat to the Big Three.

Even though the Big Three have cut back on the number of vehicles for sale, they have not given up strong positions in the major segment groups.

Thus, even though there aren't more vehicles for sale now than 10 years ago, auto makers are competing in more segments.

Competition will get tougher over the next five years because more vehicle models are coming, based on current product plans compiled by Ward's. There are 280 light-vehicle lines slated to be on sale for the '08 model year, compared to 234 for '03.

The additional lines will come mostly from more CUVs and low-volume kinds of vehicles, including several ultra-priced luxury cars and specialty trucks such as the Chevrolet SSR sporty pickup.

The Big Three will be adding 10 CUVs to their current seven over the next five years. Asian- and European-based companies will continue to expand the CUV segment, too. Ward's projects 43 CUVs, or 15.4% of the total vehicle lines for sale, will be on the market by '08. The CUV segment will expand upward with some high-priced vehicles, including the Porsche Cayenne and new offerings from BMW. There also will be a few more small-sized CUVs and expansion within the mid-priced vehicles that currently dominate the group.

Luxury cars are the other segment about to burst with new competition. The number of lines will increase by 19 to 85. But don't look for a surge in market share for luxury cars. Most of the new vehicles on tap are either ultra-priced sedans, including the Mercedes Maybach and Volkswagen Phaeton coming next year, or performance-oriented sports cars from the likes of Ferrari and Aston-Martin.

Only one segment will show a decline. SUVs will drop by two to 41, as the Big Three refocus on other products.

Number of Light Vehicles on Sale in the U.S.

Start of the '03 Model Year vs. Projected Count for '08

	Big Three		Asian		European		Total
Segment	'03	'08	'03	'08	'03	'08	'03	'08
Small Car	7	6	14	15	3	4	24	25
Middle/Large Car	23	23	20	19	2	3	45	43
Luxury Car	29	34	16	19	21	32	66	85
CUV	7	17	13	20	3	6	23	43
SUV	27	25	16	16	0	0	43	41
Pickup	11	14	5	7	0	0	16	21
Van	12	13	4	5	1	2	17	20
Total	116	132	88	101	30	47	234	280
Note: The Big Three include their foreign-based brands. Source: WardsAuto.com