Japanese Auto Makers Surpass GM In North America

Japanese automakers overtook U.S. car giant General Motors in North American car and truck production in 2005 and all signs point to Asian dominance of the industry soon, a report showed April 4. It is the first time on record Japanese car and truck manufacturers have surpassed the Big Three U.S. automakers in North America, according to the report by Scotia Economics.

Faced with growing losses in market share, GM reduced its production in the region to 4.6 million vehicles in 2005 while Japanese automakers boosted their assembly plant output in the region by 12% to 4.8 million cars and light trucks last year.

Meanwhile, a significant shift is underway globally that will make Asia -- already the world's largest vehicle-producing region -- the big winner as its share of global manufacturing capacity increases to an estimated 37% by the end of the decade, up from 34% in 2004, said Scotia Economics car analyst and report author Carlos Gomes.

"Despite rising North American vehicle output by foreign automakers, the region is losing its global dominance in vehicle assemblies," he said. By late 2008 -- once GM and Ford's restructurings are complete -- North American assembly capacity will decline to an estimated 17 million units from the current 18 million, he said. "At that point, North America will represent less than 20% of world capacity, down from 25% of output in 2005, and more than 30% as recently as the turn of the century.

The Big Three production will likely drop below 10 million, from 12.5 million in 2005 according to Gomes.

In contrast, Japanese automakers have signaled plans to further expand their North American facilities. Scotia Economics estimates that the assembly capacity of offshore manufacturers will climb by nearly 40% through 2008, lifting Asian and European assembly capacity to roughly 7.3 million units here.

While all three major Japanese carmakers are expanding their North American capabilities, Toyota is the "most aggressive," according to the report. Its facilities operated at 117% of normal capacity last year and it plans to boost its current 1.1 million capacity to 1.81 million units by 200. Toyota is building a new light truck plant in San Antonio, Texas and will add a new facility in Woodstock, Ontario.

Korean automakers are also racing to catch up. Hyundai began production at its new facility in Montgomery, Alabama last year, and Kia Motors will follow in 2009.

Copyright Agence France-Presse, 2006

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