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US automakers lose ground to foreign rivals

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by Richard Bravo

The Big Three automakers conceded more losses this past month, despite having the added bonus of a home field advantage. Japanese-based Toyota Motor increased its share of the US light vehicle market to 11.2% in 2003 from 10.4% in 2002 and 9.3% in 2000. The market share of General Motors, Ford and the Chrysler Group’s domestic brands slipped 1.5 percentage points to 60.2% in 2003.

Toyota also received a thumbs-up from rating agency Standard & Poor’s, which revised its outlook on the automaker’s long-term AAA credit rating to stable from negative. In the report, S&P analyst Chizuko Satsukawa, said: “Backed by its strong product competitiveness and geographic diversity of its operations, Toyota is expected to preserve its excellent market position and solid financial performance.”

Approaching the end of the month, the fantastically tight auto spreads for the US car manufacturers lost a little ground from the start of the year. Ford Motor Credit’s 7.00% paper due 2013 was quoted late in the month at 193 basis points over Treasuries, around 12 basis points wider than where it began the month, according to data supplied by MarketAxess. General Motors’ 7.20% paper due 2011 was quoted at the end of the month at 129 basis points over Treasuries, 20 basis points wider than its tightest trade so far in January.

For the month of December, General Motors’ sales were down 9% year-over-year, while Ford’s sales were down 4%. The Chrysler Group posted a small gain of 2% compared with last year.

Ford also announced in January that in an effort to match a similar move by General Motors, the carmaker would ramp up its incentive spending, adding $500 to rebates on certain models, lowering interest rates or extending 0% financing offered on certain models.

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