March 2, 2006 — -- For the first time in the 10-year history of its list of recommended automobiles, Consumer Reports cited only Japanese-made cars in its 10 "Top Picks" for 2006.
The exclusion of any American-made cars from the list dealt a blow to U.S. automakers, which have tried to reverse the adage that Asian companies make superior cars.
"I think it's indicative of the market," said Rebecca Lindland, auto sales analyst with Global Insight. "Consumer Reports has a very high standard for consumer research -- the gold standard really -- and for the list of top picks to not have any domestic cars on it really says something."
Japanese automaker Honda led the way with four of its cars making the list, including first-time entrants Honda Civic and Honda Ridgeline. Honda's luxury line, Acura, also scored with the Acura TL sedan
Toyota made the list with two cars, the Toyota Prius and the Toyota Highlander Hybrid, the only two exclusively gasoline-electric hybrid cars among the top picks. The Subaru Forrester, the Subaru Impreza and the Infiniti M35 rounded out the picks.
American automakers have seen a steady erosion of their market share the past several years as foreign companies, specifically Japanese manufacturers, gained a toehold with American car buyers.
Much of the domestic sales decline stems from a widely held consumer belief that American-made cars are of lower quality than their Asian counterparts. Analysts say U.S. carmakers, Ford and General Motors in particular, have failed to put out passenger cars over the last several years that appeal to American consumers. The all-Japanese Consumer Reports list is likely to reinforce that stigma.
"I think consumers do respond to these types of reports," Lindland said. "Manufacturers can't use Consumer Reports data in their advertising, so it's up to consumers to research this and find out the information for themselves. Unfortunately for the domestic companies, a large percentage of people actually do that research when it comes to buying a car."
The domestic companies were hit with a double whammy of bad news when sales numbers released today showed another month of declining U.S. sales in February while Japanese car sales continued to surge.
Honda, Toyota and Nissan all saw sales numbers jump, led by Honda's 8.7 percent increase. Ford and General Motors posted sales declines of 4 percent and 2.5 percent, respectively. Chrysler, which analysts said has been more adept than either Ford or GM at gauging the market and rolling out new products, saw sales increase 2.5 percent in February.
Toyota is expected to produce more than 9 billion cars this year, possibly supplanting GM as the world's largest automaker. The Japanese company's rise has been fueled by steady sales across all segments, including passenger vehicles, trucks and SUVs, and the Lexus luxury brand. At the head of the pack is the Toyota Camry, which has been the top-selling car in the United States for several years.
Perhaps most disappointing for the U.S. companies was a dip in truck sales for both Ford and Chrysler. U.S. companies had maintained a steady business with their SUV lines, but sales of domestic SUVs, such as the Ford Explorer, once a stalwart for Ford's total annual sales, have fallen sharply.
More recently, consumers have moved toward smaller, foreign-made SUVs.
"It really shows where the weakness is in the SUV market for the domestics -- the midsize SUVs," Lindland said. "Consumers are still buying SUVs, but they're either buying bigger or they're buying smaller crossovers. There are so few domestic models in that segment, and foreign models like the Honda Pilot are really selling well."