The Big Three have lost much of their influence since 1960
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The Big Three have lost much of their influence since 1960
- The carmakers that are called the "Big Three", because they are the three largest American groups (GM, Ford, Chrysler) and because they were the three largest carmakers in the world between the 1930s and 1960s, still represent today 40% of automobile sales in the United States (PCs including pick-ups and SUVs), compared to 90% in 1960, 83% in 1970, 74% in 1980, 72% in 1990 and 70% in 2000.
- The decline in their influence was accentuated in the 2000s, their market share having shrunk to 45% in 2010, following the financial crisis of 2008-2009 which caused the successive bankruptcy of GM and Chrysler.
- Saved narrowly by the American government for the GM group and by Fiat for the Chrysler group, these two carmakers have continued their activity, but in more modest proportions.
- This decline in the influence of the "Big Three" in the USA (in favour of Japanese and Korean brands) was accompanied by the end of several of their automobile brands, such as Oldsmobile, Pontiac and Saturn at GM, Edsel and Mercury at Ford, De Soto, Imperial and Plymouth at Chrysler, some of these brands having been phased out as early as the 1960s.
- It should be added that the former AMC group (4th American carmaker) was bought by the Chrysler group in 1987, which only kept the Jeep brand specializing in SUVs from this group. After the takeover of Chrysler by Fiat, it was decided to separate Dodge pick-ups from Dodge passenger cars and thus created the Ram brand specializing in pick-ups. In 2021, the Fiat-Chrysler (FCA) group merged with the Peugeot-Citroën (PSA) group to create the Stellantis group.
Ford, a brand that is gradually focusing on North America
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Ford, a brand that is gradually focusing on North America
- The Ford brand is the entry-level brand of the Ford group. For many years it has been at the forefront of the American market, in competition with Chevrolet and Toyota. Its F-Series pick-up has been the best-selling of all models on the American market since the 1980s and is often among the best-selling models in the world.
- This worldwide success of the Ford brand dates from the appearance of the Ford T launched in 1908 which quickly became the best-selling car in the world, with more than 15 million copies sold until 1927. The Ford brand completed its range by the top with the acquisition of the Lincoln brand in 1921 then the creation of the mid-range brand Mercury in 1939. The crisis of 2008/2009 resulted in the end of the Mercury brand.
- The following years were marked by the closing of production sites in Great Britain, Australia, Belgium, Brazil, India and Russia. The global production of the Ford brand fell dramatically between 2005 and 2022 (despite a strong rebound in the years 2015-2016-2017) falling from 5.4 million in 2005 to 3.7 million last year, which represents a drop of 30%. Worse, between 2017 and 2022, the production of the Ford brand fell from 6.1 million to 3.7 million, which represents a drop of 40%. Its production in Europe fell by 60% between 2005 and 2022. Its production in South America even fell by 90% over this period! The development of its production in China was just a flash in the pan. Production in North America now represents 60% of Ford's worldwide production compared to 55% in 2005.
- Even if Ford announces strong investments for the electrification of its range in Europe, it can be said that Ford seems to be gradually withdrawing into North America, with an effort focused particularly on pick-ups and SUVs as sedans have been successively abandoned in recent years.
Jeep is the leading brand of the Stellantis group in the USA
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Jeep is the leading brand of the Stellantis group in the USA
- The Jeep brand is derived from the former Kaiser-Willys brand. Acquired by AMC (American Motors Corporation) in 1970, it came under the control of Renault in 1982 before being sold to the Chrysler group in 1987. Integrated into the DaimlerChrysler group in 1998 along with the Chrysler, Dodge and Plymouth brands, it was bought by Fiat in 2011 to form the Fiat-Chrysler group with the Chrysler and Dodge brands (Plymouth having disappeared in 2001).
- Considered by the former boss of Fiat-Chrysler, Sergio Marchionne, as the brand of the Chrysler group with the greatest potential, Jeep benefited from strong development in North America thanks to a substantial enlargement of the range and strong development elsewhere due to a presence in Europe, South America and China. Even if the establishment in China failed, the global distribution of Jeep continued to increase from 2010 to 2018, going from 450,000 units to 1,600,000 units in 2018, one of the strongest growth rates recorded by an American brand over the past twenty years. In 2022, global Jeep sales are still nearly 1,400,000 units.
- The Jeep brand, which only produces SUVs, has certainly benefited from the strong development of SUVs around the world. Sergio Marchionne had anticipated the brand's strong potential as early as 2011. In 2023, Jeep will remain in the SUV segment by entering the era of electrification with battery electric models such as Avenger, Recon, Wagoneer S, and plug-in hybrids as Renegade PHEV, Compass PHEV, Wrangler PHEV, making Jeep the most advanced American brand in terms of electrification.
Lincoln, a fragile Premium brand
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Lincoln, a fragile Premium brand
- The Lincoln brand represents the top of the range of the Ford group, thus competing for decades with the Cadillac brand of the GM group. It could have taken over the customers of the Mercury brand (mid -range brand of the Ford group ended in 2010) but apparently it only occurred in half, because even if Lincoln sales doubled between 2009/2010 and 2022, it is mainly because this brand was marketed on the Chinese market from the end of the 2010s and that it was able to attract a new customer –basis who were looking for premium models.
- Despite this recent establishment in China, the Lincoln brand seems fragile, as its sales volumes remain relatively low (less than 200,000 worldwide sales per year, i.e. less than half the volume of Cadillac), its sales have collapsed in the United States and a departure from China in the long term is not a totally improbable scenario.
- In fact, we observe that Chinese customers have been buying more and more cars from Chinese brands for several years (54% of passenger car sales in China over 5 months 2023 compared to 49% over 5 months 2022), increasingly abandoning foreign cars, and brands with low sales volumes (such as Lincoln) are the most threatened.
- Additionally, Lincoln duplicated Ford's strategy of removing sedans from the US market, thereby removing some of its traditional customer base. Finally, the Lincoln brand has not yet entered the era of electrification, which can be a problem if we compare it to other carmakers, in particular to German Premium brands.
Chrysler, or the hypothetical rebirth of a premium brand
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Chrysler, or the hypothetical rebirth of a premium brand
- The Chrysler brand has become the top-of-the-range brand of the Chrysler group since the end of the Imperial brand in 1975. This brand has therefore been in competition with Cadillac (GM group) and Lincoln (Ford group) since that time.
- The Chrysler group then made up of the Plymouth, Dodge and Chrysler brands bought the Jeep brand in 1987. Then this group merged in 1998 with the German carmaker Daimler-Benz to form the DaimlerChrysler group. The Chrysler group, which was relieved of the entry-level brand Plymouth in 2001, regained its independence in 2007 before filing for bankruptcy in 2009.
- The group made up of the Chrysler, Dodge and Jeep brands was then bought by the Italian group Fiat, to form the Fiat-Chrysler group in 2011. Ten years later, in 2021, the Fiat-Chrysler group merged with PSA to form the Stellantis group.
- While the former boss of Fiat-Chrysler, Sergio Marchionne, had planned to end the Chrysler and Dodge brands that had become moribund, the new management of Stellantis, Carlos Tavares, wants to believe in the sustainability of these two brands.
- We can say that the Chrysler brand almost disappeared, its production volume (based mainly in North America) falling from 800,000 units in 2005 to 100,000 in 2021 (-87.5%).
- Stellantis' strategy is to perpetuate the Chrysler brand through the electrification of its models, the next one called Airflow should be launched in 2025. The task remains delicate, however, because it will not be easy to increase the level of sales in the long term, which certainly increased by 63% in 2022 compared to 2021, but remains very far from its past scores.