Baby boomers, with an eye on their image and new wealth in their pockets, are increasingly hitting the showrooms of Mercedes-Benz and Lexus - mostly at the expense of General Motors.
Foreign automakers Honda, Mercedes-Benz and BMW posted double-digit sales gains over the past 14 months, according to the companies' sales figures. So did Porsche, Audi and Toyota's Lexus division.Even Volkswagen saw sales soar 28 percent in the past two months, and the new Beetle has barely hit showrooms yet.
"Every decade there's always been someone who takes someone else's sales because they had a better product," said analyst Maryann Keller of Furman Selz. "That's all that's going on now."
General Motors, which once sold one of every two vehicles in America, now sells fewer than one in three. The No. 1 automaker's sales slid 7 percent in the past two months, and its February share of the U.S. market was near its lowest in decades.
Keller said GM has been sliding for decades. But its recent problems are due to its failure - unlike Mercedes and Lexus - to predict the shift in consumer preferences from cars to trucks.
"GM did not understand the truck boom," she said.
Some foreign brands also nabbed baby boomers decades ago and were able to hold on to them with quality products and snappy brand campaigns, said Wes Brown of Nextrend.
"Image is everything," Brown said. He added that baby boomers are "mostly concerned about how they feel about themselves, how they look and how their peers perceive them."
Tom Settle, 46, had never owned a Honda until January. But the Grand Junction, Colo., man chose an Accord, made by the Japanese company, over American models because of its price and luxury.
"I'd buy American when I could, but there's an investment side of me that says you have to get as much bang for your money as you can," he said. "It's the number one-rated car. I wanted quality."
Still, the Big Three dominate the U.S. market, selling seven of every 10 new cars. No European automaker had more than a 1 percent share of the American market last year.
Chrysler, following new product launches, has posted four straight months of sales gains for the first time in more than a year. And Ford registered record profits last year, largely because it, too, predicted the truck boom.
GM also posted strong profits last year - up 34 percent, largely from aggressive cost-cutting.
In its recent sales slip, GM is far from alone. Japanese automaker Nissan had a drop of 27 percent in sales in January and February.
But GM is trying to make up for some past mistakes.
The Cutlass Supreme was a top-selling model in the mid-1980s, until the automaker re-launched it as a two-door in 1988. "The world was buying four doors," said Darwin Clarke, Oldsmobile's general manager. "That hurt us."
But Oldsmobile believes it will be on target with its new, stylish-looking Alero, which will be aimed at buyers of imported models when it hits showrooms in late summer.
In all, GM will launch 20 new models in the next 18 months; 10 will be light trucks.
"We think we're going to rebound," said Michael C. DiGiovanni, GM's market research chief.