Slowing California Auto Sales

SAN ANTONIO, Texas, Nov 16, 2006; Reuters reported that auto sales in California, the largest U.S. market for cars and trucks, will slow for the rest of this year and next, a forecast released on Thursday by the state's auto dealers association said.

The report commissioned by the California Motor Car Dealers association forecast a 2.5 percent decline in 2007 sales.

"The reasons for the sliding market are plentiful, including slower economic growth, rising interest rates, elevated consumer debt levels and the slowdown in the housing market," the report prepared by consultancy Auto Outlook said.

The California market is seen as a bellwether for national auto sales, which were down about 3 percent over the first 10 months of this year from the same period a year earlier.

Game Console Wars The video game industry's own clash of the titans reboots this week with the midnight launch of Sony's PlayStation 3 and Sunday's debut of Nintendo's Wii.

Full coverage In one standout trend, the California data showed the shift away from Detroit-based automakers and toward Toyota Motor Corp. has been more pronounced in the state than in the national market this year.

Toyota's U.S. sales are up 12 percent so far this year, taking the Japanese automaker's share of the overall light vehicle market to 15.2 percent from 12.2 percent a year ago.

But in California, the most populous and wealthiest U.S. state, Toyota gained 3.7 percentage points of market share through the first three quarters, the study said.

By contrast, the traditional Big Three lost 4.7 market share points in California, the study said.

On a combined basis, the Detroit automakers represented just 41.2 percent of auto sales in California through the first nine months, well below their 54.1 percent share nationally. "Toyota is making significant progress in the California market," said Jeff Foltz, a consultant with Auto Outlook who compiled the sales report for the California dealers group.

Toyota -- including its Lexus and Scion brands -- is now the leading car maker for California, with a 23-percent market share that is nearly double that of the next competitor, Honda Motor Co.

Honda has a 9-percent market share nationally and 13 percent in California.

The study forecast that sales from Detroit's General Motors Corp., Ford Motor Co.and DaimlerChrysler AG's Chrysler Group would decline 9.2 percent this year. It projected a slight gain for Japanese brands.

Game Console Wars The video game industry's own clash of the titans reboots this week with the midnight launch of Sony's PlayStation 3 and Sunday's debut of Nintendo's Wii.

Full coverage Toyota is rolling out the first production model this week of a new full-sized pickup truck that will be made in San Antonio. The new Tundra, which Toyota calls the most important product launch in the company's history, is aimed at the full-size truck market, the one segment of the U.S. auto market where the Big Three still dominate.

On a national basis, GM remains the largest automaker with a 24.5 percent share, followed by Ford with 16.8 percent.

Foltz said he expected California's projected sales decline next year would closely match the overall U.S. market.

"I don't see the California market decline having a domino effect in making things worse nationally," he said. "For next year at least the decline will be pretty much in lock step."