BMW

Rating: Top Dog

Total 2007 sales: 293,795
Percentage change from 2006: +6.7%
Total number of models: eight
Pictured: 2008 BMW 3 Series Convertible

The BMW brand had record U.S. sales in 2007, marking 16 consecutive years of growth. In particular, the BMW 3 Series increased 18.2% in 2007, to 142,488. Even with a big increase in 2007 for its archrival, the Mercedes-Benz C-Class, the 3 Series still outsold the C-Class by more than 2-to-1. A small part of that is because BMW offers more variants, like a 3 Series Convertible. Nevertheless, the 3 Series is all the more formidable, because the current generation 3 Series sedan had its U.S. debut in May, 2005, vs. August, 2007, for the C-Class.




Honda

Rating: Top Dog

Total 2007 sales: 1,551,542
Percentage change from 2006: +2.5%
Total number of models: nine
Pictured: 2008 Honda Accord

The Honda Accord and the Toyota Camry are the No. 2 and No. 1-selling cars in the U.S., respectively. An all-new Accord, which is bigger, more luxurious, and more distinctively styled than the car it replaced, debuted in the fall of 2007. Accord sales increased 10.3% for the year, to 392,231. The Honda Odyssey was also the No. 2-selling minivan in 2007, barely behind the redesigned Dodge Caravan, which was No. 1. Honda sales should increase again in 2008, based on a full year for the new Accord.




Lexus

Rating: Top Dog

Total 2007 sales: 329,177
Percentage change from 2006: +1.8%
Total number of models: eight
Pictured: 2008 Lexus IS-F

The Lexus brand adds prestige and kid-glove customer handling to the core values for the parent Toyota brand: quality, reliability, and value for the money. Styling and sporty handling have been the Lexus brand’s weaknesses vs. its European competitors. But Lexus is moving to fix that, with new models like the $56,765, V-8-powered, IS-F variant of the sporty IS sedan. Meanwhile, most of its mainstream models are holding their own. In 2007 sales increased 8.7%, to 82,867, for the entry-level ES sedan. However, Lexus light-truck sales fell 7.9%, to 128,843. The full-size LX sport-utility vehicle suffered the biggest drop.




Mercedes-Benz

Rating: Top Dog

Total 2007 sales: 253,492
Percentage change from 2006: +1.8%
Total number of models: 13
Pictured: 2008 C-Class

Mercedes-Benz posted record sales in 2007, the 14th consecutive year of growth. All European luxury brands bottomed out in the early 1990s because of a luxury tax on cars, the 1987 stock market crash, and new competition from Lexus and Infiniti. An all-new C-Class was the news for Mercedes-Benz in 2007. The C-Class sedan increased 26.6%, to 63,699, although that was still far short of the BMW 3 Series. In its first full calendar year of sales, the GL-Class SUV increased 40.1%, to 26,396. Those gains were offset by declines for the E-Class sedan and wagon and the R-Class crossover.




Mini

Rating: Top Dog

Total 2007 sales: 42,045
Percentage change from 2006: +7%
Total number of models: two
Pictured: Mini Cooper Clubman

BMW’s Mini brand topped U.S. sales of 30,000 its first 12 months, starting in March, 2002, vs. an initial U.S. sales target of only 20,000. No doubt, Mini lowballed its target on purpose, but probably not by 50%. Since then, sales have grown to more than 40,000, based solely on the Mini Cooper, the sportier Mini Cooper S, and convertible variants. Sales should continue to climb in 2008, as Mini this month adds the larger Mini Cooper Clubman, with a bigger back seat, a third door on the passenger side, and a squared-off
cargo area.




Porsche

Rating: Top Dog

Total 2007 sales: 34,693
Percentage change from 2006: +1%
Total number of models: four
Pictured: 2008 Porsche 911

Porsche shocked purists when it added the Cayenne SUV in 2003, and it will shock them again in 2009 with the Panamera, a fairly large, four-door sedan. Until then, Porsche will keep its sales momentum going with a facelifted 911 in the fall of 2008. Besides revised exterior styling, the flagship 911 will get even more power from direct-injected engines, which were already successfully introduced for the Cayenne in the 2008 model year. The Cayenne accounted for most of Porsche’s sales increase in 2007, up 18.3%, to 12,547.




Toyota

Rating: Top Dog

Total 2007 sales: 2,291,648 (including Scion)
Percentage change from 2006: +2.9%
Total number of models: 18
Pictured: 2008 Toyota Prius

The all-hybrid Toyota Prius is the best illustration of Toyota’s carefully cultivated “green” image. That image resonated with consumers, with some help from rising gas prices. While the entire U.S. market sagged 2.8%, to 16.1 million light vehicles in 2007, Prius sales jumped an incredible 68.9%, to 181,221. On a larger scale, sales of the redesigned Camry increased 14.5%, to 418,757. The Camry was all new in September 2006. Camry sales in 2007 also included 54,492 hybrid models, a 73.3% increase.



Audi

Rating: Underdog

Total 2007 sales: 93,508
Percentage change from 2006: +3.4%
Total number of models: nine
Pictured: 2009 Audi A4

To meet its U.S. sales goals, Audi must sell a lot more A4s. The A4, including several variants, is Audi’s best-selling model, accounting for almost half of U.S. sales. However, the present A4 is in its seventh and last year. Its replacement, the all-new 2009 Audi A4, is due in the fall of 2008. Besides being newer, it will be bigger and sportier than the model it replaces, so sales should rise. The 2009 model will be launched with a 265-hp V-6 engine, up from 255 hp for the current V-6.




Cadillac

Rating: Underdog

Total 2007 sales: 214,727
Percentage change from 2006: -5.7%
Total number of models: six
Pictured: 2008 Cadillac CTS

Cadillac has a long way to go if it hopes to get back in the same league as Lexus, which had record U.S. sales of 329,177 in 2007. Cadillac last topped 300,000 units in 1986, before Lexus was introduced. The entry-level 2008 CTS, which debuted in September, 2007, is helping Cadillac gain sales. In January, CTS sales were nearly double the year-ago month.


In the constant jockeying of the auto industry, leaders and laggards come and go. Who's on top now and who's coming up fast?


The U.S. auto industry is the ultimate dog-eat-dog world.

This Darwinism only gets tougher when the industry enters a downturn. Forecasts for 2008 predict the worst sales in a decade, at just below 16 million light vehicles—that is, passenger cars and light trucks such as pickups, minivans, SUVs, and crossovers, not counting medium and heavy trucks including 18-wheelers.

Even the top brands—BMW (BMWG), Mercedes-Benz (DAI), Honda (HMC), and Toyota (TM)—are constantly jockeying for position, coveting each other's turf.

BMW had record sales in 2007, but still wishes its flagship 7 Series commanded as much prestige as the Mercedes-Benz flagship S-Class. Mercedes-Benz had record sales, too, but wishes its entry-level C-Class had the fun-to-drive factor—not to mention the sales volume—of BMW's dominant 3 Series.

And you wouldn't think mighty Toyota has much to worry about, now that it's the world's largest automaker. But as they say in Japan: "The nail that sticks up gets hit."

Moving on Up

In the U.S. market, a number of underdog brands are moving up in the pecking order, including Nissan (NSANY). The redesigned Altima sedan had a banner year in 2007, and Nissan has crossovers such as the all-new Rogue and the redesigned Murano coming onstream at what appears to be just the right time in the marketplace.

Ford's (F) Mazda brand is another up-and-comer. Mazda has "terrific products," says Alexander Edwards, president, automotive, for San Diego-based market research firm Strategic Vision.

Strategic Vision has a research model based on the "hierarchy of needs" consumers must satisfy before they are comfortable enough with a brand to buy it. It's analogous to psychologist Abraham Maslow's famous hierarchy of needs, which starts with basics like food and shelter, and works its way up to self-actualization.

Research shows Mazda has established strong links between the "fun and exciting" aspect of its brand image and product quality, according to Edwards. Successful brands need both. Edwards says, for instance, Dodge has several "great" products, but its major focus is on "being interesting, and less focus in foundational security needs; most people will consider and purchase 'security' before 'interesting,'" he says.

Audi's Big Splash

The Audi (NSUG) brand is also honking its horn and pulling out into the passing lane. Audi's goal is to become the No. 1-selling luxury brand in the U.S. by 2015.

That's a tall order, considering Audi had U.S. sales of 93,508 in 2007. That's less than half of U.S. sales for BMW and Mercedes-Benz last year, and less than one-third of the No. 1 luxury brand, Lexus. (Woodcliff Lake (N.J.) AutoData provided all sales numbers for this story.)

"We see the potential to be the market leader. We are the market leader in several European markets, so why not in the United States?" said Ralph Weyler, then the Audi board member for marketing and sales, in an interview at last month's North American International Auto Show in Detroit. (Audi announced on Feb. 22 Weyler was leaving the company to start his own consultancy business, with customers including Audi and Volkswagen (VLKAY). His successor is Peter Schwarzenbauer, who was CEO of Porsche Cars North America.)

Audi has been putting its money where its mouth is, including the ultimate status symbol: a 60-second ad costing upwards of $5 million that aired during the 2008 Super Bowl. By the clubby standards of the German auto industry, the ad takes an uncollegial, almost literally violent approach. The Audi ad was modeled on the famous horsehead scene in The Godfather; in the Audi ad, the main character is covered with motor oil instead of blood and the "severed head" looks a lot like the front end of a Mercedes-Benz, hood ornament and all.

"You can't advertise with a full-page ad every day in USA Today, so why not the Super Bowl? Sometimes you need a big blowup, like fireworks, where the whole sky is illuminated," Weyler said.

Hyundai (HYMTF) aired a Super Bowl ad, too, to introduce its upcoming Genesis model, the brand's first luxury car. The market will decide whether Hyundai and Audi can keep the sky lit up, or whether the effort is a flash in the pan.

Luxury vs. Light

Luxury brands have outperformed the rest of the market, but U.S. light-vehicle sales have already slipped two years in a row. Sales in 2007 fell 2.8% to 16,148,811. That's also about 7.5% below the all-time peak of 17.4 million, in 2000.

The downturn is undoing mergers and acquisitions that were sealed as the industry approached that last peak of prosperity. As Jim Press, co-president of Chrysler, is fond of saying: "Good habits are formed in bad times, and bad habits are formed in good times."

Daimler and Chrysler, which never did merge all that thoroughly after getting hitched in 1998, got divorced last year over irreconcilable differences. Ford Motor has pawned its assets, up to and including its blue oval logo, to fund new products. It is selling Land Rover and Jaguar, which it acquired to form the now-defunct Premier Automotive Group. However, Ford is keeping Volvo—for now.

Ford's Lincoln brand is making an unlikely comeback, with new products including the MKX crossover. But the bread-and-butter Ford brand is still a big pickup truck brand, first and foremost.
To Kill or Be Killed

General Motors (GM), like Ford and Chrysler, is deep into an effort to switch from gas-guzzling trucks to smaller cars and crossovers, in response to high gas prices and changing consumer tastes. GM's Chevrolet, Cadillac, and Saturn brands seem to have momentum in the right direction.

"Saturn has increased the perceived quality of its products, backed by secure belief in its dealerships," says Strategic Vision's Edwards. The redesigned 2008 Cadillac CTS also has Cadillac on the move, he says.

The price for standing still is high. In the last decade, GM killed Oldsmobile and Chrysler killed Plymouth. Just last month, slow-selling Isuzu announced it will pull the plug on U.S. new-vehicle sales in January, 2009. Isuzu, once famous for Joe Isuzu, the fictional lying car salesman, had U.S. sales averaging more than 100,000 units per year, from 1985 to 1999.

From the top dogs to the back of the pack, somebody is always nipping at your heels. And that's no lie.


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