Forecasts for the U.S. auto market are downsizing as consumers reel, but Japanese carmakers are confident of another year of record sales in their most important market in 2008, buoyed by strong fuel efficiency.
Japanese auto executives at the North American International Auto Show this week generally forecast U.S. demand for light vehicles at 15.5 million to 16 million vehicles this year, compared with 16.15 million sold in 2007.
But many Japanese automakers said that even if the market shrank to the lower end of the range, they were confident in snatching more market share. Last year, Japanese brands collectively took a record market share of 36.9 percent.
"We still have the strength to beat the market," Shigeru Hayakawa, chief executive of Toyota Motor's North American unit, told reporters at the show.
2008 Detroit auto show
Last year, Toyota's U.S. sales grew 2.7 percent to 2.62 million vehicles, against a similar percentage fall in the overall market. That gave it a market share of 16.2 percent, up 0.8 point from the year before, and pushed it past Ford Motor to become America's second-biggest brand.
Toyota is targeting a 1 percent rise this year driven by the planned full remodeling of the Corolla and Matrix sedans, as well as continued
Japan's second-ranked Honda Motor expects U.S. sales to rise 2.5 percent despite its forecast for a weaker overall U.S. market of 15.9 million vehicles.
Auto analysts agree the road ahead will be relatively smooth for Japanese automakers.
"Even if demand should fall to 15.5 million units, we think Japanese automakers will be able to secure unit sales equal to last year's level," JPMorgan Securities' Takaki Nakanishi wrote in a report this month, adding he expected their market share to grow to 38.6 percent this year.
"We think concerns about a deterioration of sales in the U.S. are no longer valid," he added.
Japanese auto shares have been battered since last summer by what many analysts said were overblown fears about the impact of the subprime mortgage crisis. Japan's top three automakers--Toyota, Honda, and Nissan Motor--all make over half of their profits in North America.
Driving demand for their vehicles will be a strong reputation for fuel efficiency amid record-high pump prices, Japanese automakers said.
U.S. drivers may face average gasoline prices of $3.50 per gallon this spring after crude oil topped a record $100 a barrel, the U.S. government predicted this month.
"We hope to leverage the perception of fuel efficiency that Japanese automakers have," Ikuo Mori, CEO of Fuji Heavy Industries, maker of Subaru cars, told Reuters.
Subaru wants to boost its U.S. sales to 200,000 vehicles from 187,200 last year, even though it expects the market's annual sales to come in below 16 million vehicles.
"At our volume level, it shouldn't matter what the market does," Mori said. "I'm counting on sales to grow no matter what, as the Impreza and Tribeca models get a full-year contribution from last year's remodeling."
Nikko Citigroup auto analyst Noriyuki Matsushima said that with Detroit automakers scaling back production this year, the market could easily fall to the mid-15 million-unit level. But that could in fact provide a boon for the Japanese, he said.
"Japanese brands' share could exceed 40 percent (if demand fell to that level)," he said. "The reason is simple: consumers are seeking fuel-efficient cars."
©2007 CNET Networks, Inc. All rights reserved. CNET , CNET.com , and the CNET logo are registered trademarks of CNET Networks, Inc. Used by permission.
