June 22, 2009

Auto market leans toward the little guys

The downturn in the U.S. auto market favors the little guys who do not need to sell as many cars to turn a profit, an industry analyst said Monday.

Smaller companies can be profitable at a much smaller market size, selling to ... fewer numbers of people, Ron Pinelli, president of Autodata, told The New York Times.

The current rate of sales -- about 10 million vehicles a year -- could explain a Hyundai and Kia jump in U.S. market share from 5 percent in 2008 to about 7.3 percent this year, the Times said.

While General Motors Corp. and Chrysler floundered in bankruptcy court, consumers have turned away from loyalty to a certain brand to a hunt for a quality product, he said.

There are so many good cars out there to choose from. Everybody's building a good car right now, Pinelli said.

The smaller automakers are having pretty good success in the last few years "¦ coming out with competitive products and benefiting from the misery of the bigger automakers, said Jesse Toprak, an industry analyst at Edmunds.com.