As if Detroit didn’t have enough worries.
In addition to the recession, and the bankruptcies of Chrysler and General Motors , a new threat has appeared in the rearview mirror.
Many smaller automakers are gaining a bigger share of the market, most notably Hyundai and Kia .
Together, the two Korean brands, which are both owned by Hyundai, hold 7.3 percent of the American market, the same as Nissan, which ranks sixth in American sales, behind G.M., Toyota , Ford , Honda and Chrysler. Last year, Hyundai and Kia had 5 percent of the market.
Their gains appear to be a replay of what occurred four decades ago, when upstart automakers from Japan started selling cars in the United States. At the time, American carmakers dismissed them, but today they control nearly 40 percent of the American car market.
Analysts see two main reasons that smaller companies are capitalizing on the auto industry’s downturn. One is that the shrinking of the overall market — the current selling rate is about 10 million vehicles a year, down 40 percent from two years ago — has created opportunities for carmakers that do not need to sell millions of cars to make money.
“You can be profitable at a much smaller market size, selling to much fewer numbers of people,” said Ron Pinelli, president of Autodata, which tracks industry statistics.Page 1 of 4 | Next Page