Several car companies posted strong sales in June, and for the first half, but two manufacturers have turned out to be losers. As the industry recovers sharply, neither has managed to market itself as a good alternative to other mid-priced car lines.
One of the two is formerly red-hot Kia. Its sales are down 3.9% to 277,351 during the first six months of 2013. Its market share has fallen from 4% last year to 3.6%. The other manufacturer that has suffered is Volkswagen, which had stated its plans to surpass General Motors Co. (NYSE: GM) and Toyota Motor Corp. (NYSE: TM) as the largest car company in the world. Without a strong presence in the American market, that is unlikely.
Kia’s major trouble is a scandal that involved miles-per-gallon claims that were too high. Add to that the fact that its lineup is limited compared to rivals like Toyota. VW’s problem is that it barely has a lineup at all, compared to the large numbers of vehicles offered by the manufacturers that dominate the U.S. market.
The American market has fallen behind China’s as the largest in the world. However, the American market continues to expand at a near record pace. All the big car companies have had to abandon any hope that sales in Europe will be anything beyond a drag. A car manufacturer that cannot make it in the United States is a car company that will fall behind in global market share and probably profits.
Kia and VW need to show that they can be competitive in the U.S. again. That may take years, particularly based on product lineups that are modest by almost any measure.