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Old 11-06-2003, 07:22   #1 (permalink)
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U.S.A.:U.S. automakers try chrome and turbochargers to vie with Asians

Autos Insider
By Jeff Green / Bloomberg News

LAS VEGAS -- General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler are aiming for a bigger share of the $27 billion market for souping up cars, a business Asian car and parts makers dominate.


The big U.S. automakers and hundreds of companies that make auto and truck accessories are showing off everything from neon license-plate holders to turbochargers at this week's Specialty Equipment Market Association exhibition for add-on parts.

Young drivers are the U.S. automakers' main target because they prefer customizing compact cars from Toyota Motor Corp. and Honda Motor Co. Their parents revved up Chevrolets and Fords in the 1950s and 1960s, said Peter MacGillivray, head of marketing at the trade group.

"The sport compact scene is still mostly defined by the Honda Civic," he said.

U.S. automakers need consumers under age 25 to buy Dodges or Saturns to stem further losses in market share to Asian brands, MacGillivray said. To lure young drivers, U.S. carmakers are stepping up efforts to sell custom parts, said Chris Cortez, head of Chrysler's parts business.

The domestic-based automakers, their foreign rivals and parts suppliers are displaying hundreds of modified cars and trucks and the parts that make them possible this week in Las Vegas. More than 115,000 people will attend through Friday, MacGillivray said.


'Speed Shops'


Most of the customizing business now goes to independent partsmakers who mainly cater to Japanese-made cars, Cortez said. Chrysler's custom-parts unit is trying to win young buyers by outfitting dealerships with "speed shops," she said.

Dodge dealer Glenn Moss in San Bernadino, California, has quadrupled sales of Chrysler's Mopar parts since he converted part of his store to sell turbochargers and chrome wheels to drivers seeking more power for Dodge Neon sedans and Dakota pickup trucks.

"We're trying to capture the muscle end of the market as well as kids with sport-compact cars," said Moss, who opened Moss Bros. Speedworks two years ago, one of 40 shops Chrysler plans to open by year-end. "Our sales of cars are increasing, too, because we're merchandising them better."


Loyalty


A kid adding parts to a used car now is more likely to be a loyal buyer of that brand in the future, Cortez said. That is demonstrated, in part, by Honda and Toyota's market gains in recent years.

U.S.-based automakers' overall share of their home market, excluding import brands such as Ford's Volvo, fell to 60.1 percent in the first 10 months of this year, from 61.8 percent in the same period last year, according to Autodata Corp. Toyota, Honda, Nissan Motor Co. and other Asian companies' share rose to 32.8 percent from 31.4 percent, Autodata said.

The decline in market share has hurt earnings. Ford posted a $25 million net loss in the third quarter and DaimlerChrysler lost $2.3 billion as it wrote down a stake in Airbus SAS. General Motors saw profit from its North American automotive operations tumble 76 percent to $128 million.

General Motors, Ford and Chrysler rotate show sponsorship and it's Ford's turn this year. Ford Monday introduced a $15,000, eight-cylinder engine that fits into several vehicles, including the compact Ford Focus, which is sold with a four-cylinder engine. Ford also showed a $5,000 kit to make front-wheel-drive cars into rear-wheel-drive models, a configuration common in fast cars.

Sales of the parts displayed at the annual show rose 16 percent in the past three years, from $23.2 billion in 1999, MacGillivray said. The so-called sport compact parts segment has grown even faster, up to $2.4 billion from $756 million in the same period, he said.


Magazine, Web Sites


Young drivers are buying more magazines and checking Web sites that focus on auto customizing, said John Stewart, vice president and group publisher at Primedia Inc.'s import performance group, which has eight magazines on modifying cars.

Monthly circulation at the company's SuperStreet, Import Tuner and Sport Compact Car has tripled since 1999, he said. The company has 4.5 million viewers and subscribers aged 18 to 25 who read the magazines, visit Primedia Web sites or watch television shows catering to their passion for making small cars go fast, he said.

General Motors is sponsoring more events attended by young drivers, said Bob Kern, coordinator of the company's custom parts business with groups such as the Specialty Equipment Market Association. The automaker sponsors 10 or 11 events a year and travels to other shows to keep track of trends, he said.

General Motors has modified versions of its Ecotec engine for front-wheel drive cars to propel a Saturn Ion 212 miles per hour on a salt-flat lakebed, and used a 1,000-horsepower derivative to power a Cavalier drag racer, Kern said.


Ahead of Domestics


"American kids that buy used GM products will grow into new products as time and income allow," he said.

Ford is matching General Motors by pushing its Focus small- car, while Chrysler is pitching the Dodge Neon SRT-4.

Japanese companies may still be ahead of domestic businesses in the race to attract young buyers. Autobacs Seven Co., Japan's largest auto parts retail chain, opened its first U.S. store in Stanton, California, with a cafeteria that lets customers watch their cars and trucks being modified.

Toyota developed its new Scion brand to attract younger customers. The cars are less expensive than Toyota's main brand and can be customized more easily. Toyota began selling Scion models in June in California and begins a national introduction in February. Toyota expects to sell as many as 11,000 Scion-brand cars this year and about 60,000 in 2004, said Jim Farley, a Toyota vice president.

Dodge dealer Moss said increasing sales of customer parts is a move the domestic manufacturers have to make or risk losing more business to import brands.

"I've been wanting to do this for years."

(Photo)Visitors to the SEMA show, Speciality Equipment Market Association, stop to look at a Ford Cobra V-8 at the Las Vegas Convention Center.
Attached Images
File Type: jpeg sema.jpeg (21.0 KB, 9 views)
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

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