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U.S. Automakers Getting Back on Track at Just the Right Time

Just two years after two of the "Big Three" U.S. automakers declared bankruptcy, Detroit's favorite sons have grown strong enough to steal sales back from their Japanese rivals.

For the month of September, sales for General Motors Co. (NYSE: GM) were up 20%, sales for Ford Motor Co. (NYSE: F) were up 9% and sales for Chrysler Group LLC were up 27%.

Meanwhile, sales for Toyota Motor Corp. (NYSE ADR: TM) plunged 17.5% and Honda Motor Co. Ltd. (NYSE ADR: HMC) fell 8%.

It's quite a reversal from the late 2008-09 period, when both GM and Chrysler declared bankruptcy and took government bailout money to keep from closing their doors. Toyota at that time took the crown of world's largest automaker from GM. And the U.S. auto industry collectively shed 120,000 jobs.

"The image change for Detroit in the last three years probably has been more than any of us in the industry anticipated," Jesse Toprak,vice president for industry trends and analysis at, told USA Today.

The Japanese automakers lost market share this year as they were pounded by the devastating earthquake and tsunami that rocked the island nation in March. Disruptions to manufacturing have caused lapses in inventory that have hurt sales.

However, the American automakers have taken full advantage of the opportunity to get car buyers to give them a chance.

Both GM and Chrysler picked up 1.7 market share points in September compared to the previous year, while Honda lost 1.7 points and Toyota lost 3.8 points.

Jeff Schuster, executive director of global forecasting and analysts for J.D. Power and Associates, thinks that the Japanese automakers may find it hard to win back those lost customers.

"[The March earthquake] created a more open environment coming out of the recession," Schuster told Bloomberg Businessweek. "I think buyers are more open to looking at other brands now."

Advantage Detroit

Several factors are working in favor of the U.S. automakers now that they've regained their financial footing.


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