The already huge per-vehicle profit gap between Japanese automakers and the Detroit Three in North America grew 32 percent from 2005 to 2006, even though General Motors Corp. has made significant improvements, according to a study of the industry released Tuesday, according to AP. Overall, GM, Ford Motor Co. and Chrysler LLC made an average of $3,814 (¤2,765) less per car or truck than their prime competitors, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., according to a study of industry costs and profits by Laurie Harbour-Felax, managing director of Stout Risius Ross, a Chicago-based financial and operational advisory firm. The gap, which includes special write-offs such as early retirement, buyout and other restructuring costs, widened by $915 (¤663) from $2,899 (¤2,102) in 2005, Harbour-Felax said Tuesday while attending an industry conference run by the Center for Automotive Research. GM cut its loss per vehicle in North America to $146 (¤106) in 2006 from $1,271 (¤921) in 2005, mostly because of cost cuts that included the departure of more than 34,000 hourly workers to buyout and early retirement offers. It also is saving money through efforts to design cars and trucks globally, by increasing the number of parts common to all of its vehicles and by purchasing parts on a global basis, Harbour-Felax said. «GM has done the most from this as you look at their whole product lineup,» she said. Still, GM made $2,123 (¤1,539) less per vehicle than Toyota in 2006, according to the report. Toyota, the most profitable of all automakers on a per-vehicle basis, increased its profit per vehicle from $1,175 (¤852) in 2005 to $1,977 (¤1,433) in 2006, the report said. The numbers for individual manufacturers are at times lower than the overall gap because they do not include special write-offs, Harbour-Felax said. Ford, while it has made progress on cost cuts, common parts and globalization, still had a $3,939 (¤2,855) profit gap in 2006 when compared with Toyota, Harbour-Felax said. Chrysler's profit gap with Toyota averaged $3,088 (¤2,239) per vehicle for 2006 mainly because it was «force feeding» the market by selling vehicles with heavy incentives, she said. «They put all these vehicles on the market that the consumer wasn't demanding,» she said. The labor cost difference between the Detroit Three and the Japanese automakers amounts to $1,200 (¤870) to $1,500 (¤1,087) per vehicle, Harbour-Felax said. Although the domestic automakers likely are to seek parity with the Japanese in ongoing contract talks with the United Auto Workers, that won't solve all of their problems because labor costs make up only about 10 percent of the cost of a vehicle, she said. The average selling price of a new vehicle in the U.S. last year was $28,451 (¤20,626), according to the National Automobile Dealers Association.
