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Analysts say Big Three face steep uphill climb

Prospects aren't rosy for U.S. automakers, they say.

Soft auto sales in April could spell trouble down the road for Detroit's three automakers as they restructure and try to entice buyers from strong foreign brands, according to several industry analysts.

Five industry analysts predicted that U.S. sales will be down in April compared with the same month in 2006, and in a down market that continues to shift from trucks to cars, that means trouble for Detroit.

The analysts said there doesn't seem to be any pent-up demand for vehicles. Consumers have too much debt, are facing increased payments because of rising adjustable rate mortgages or are waiting to see what happens to gasoline prices.

Under those circumstances, it will be difficult for the Detroit Three to execute their turnaround plans because they're competing for a shrinking market mainly against Honda Motor Co. and Toyota Motor Corp., which have strong car brands.

"It's a very tough environment out there right now," said Joe Barker, senior manager of global sales analysis for CSM Worldwide, an automotive forecasting firm in Northville, Mich.

Ford Motor Co., General Motors Corp. and DaimlerChrysler AG's Chrysler Group have lost billions in recent years as Toyota and Honda have increased their market share.

The Detroit Three are still reliant on pickup trucks for sales and profit, and that market likely will continue to decline, said Erich Merkle, an industry analyst with auto consulting company IRN Inc.

Barker said his company's research shows that Toyota and Honda have such strong car brands that it will be difficult for Ford, GM and Chrysler to persuade buyers to switch when economic times are harder.

[Last modified April 23, 2007, 23:04:40]