Company News

GM, Chrysler U.S. sales hurt by uncertainty--study

DETROIT, March 19 (Reuters) - Fewer new car shoppers are considering vehicles from General Motors Corp GM.N and Chrysler LLC at a time when consumer attention is focused on their request for further U.S. government aid, according to a survey released on Thursday.

The share of car shoppers who say their primary choice would be a vehicle from one of the GM brands dropped by almost 12 percent, while the share for Chrysler dropped by a third, according to the survey released by CNW Research.

“There is nothing to stop the slide in intentions for those on the downside of this survey,” CNW said in a monthly research note on the auto market.

“But the decisions to cut back on advertising haven’t helped GM or Chrysler. Nor has the talk of bankruptcy, which continues to haunt those brands.”

Ford Motor Co F.N, the only one of the U.S. automakers that has not accepted emergency aid from the U.S. government, has seen a nearly 12 percent increase in the share of car shoppers who say it would be their first choice.

The CNW survey was based on responses from more than 40,000 consumers who say they intend to buy a new vehicle and conducted in January and February, according to the research firm.

Honda Motor Co Ltd 7267.T showed a 13-percent jump in its ranking as a primary choice among those who intend to buy a vehicle.

The biggest gains in the CNW survey came for South Korea's Hyundai Motor Co 005380.KS and its affiliate Kia, both brands that have gained share in a slumping U.S. market so far this year.

The share of car shoppers who say Hyundai would be their primary choice jumped 59 percent. Kia rose by almost 50 percent in the CNW survey.

On a combined basis, the two Korean brands had a U.S. market share of just over 5 percent in 2008.

“Hyundai and Kia show staggering increases in future consideration,” CNW said. “While that may be considered a distortion because they are starting with a low base market share, it is worthy of consideration considering how well both brands have been doing during the past rough months.”

Earlier this year, Hyundai rolled out a novel incentive program that allows car buyers to return their vehicles if they lose their jobs.

GM has said it is studying the Hyundai offer and may offer a similar program of its own.

AutoNation Inc AN.N, the leading U.S. auto dealership, said this week it would begin offering car buyers a guarantee program that will cover up to six months of payments for consumers who lose their jobs. (Editing by Andre Grenon)