By Fred Thomas, Industry Director, Apriso

After the government provided a $17.4 billion lifeline to two of the largest US automakers last year, most Americans still thought that the big Detroit three – GM, Chrysler and Ford – were down for the count.

Over the last few decades, we’ve seen domestic car sales from American companies slide from over 80 percent to less than half, with steady year-over-year market share losses. Correspondingly, Toyota, Honda and other Asian manufacturers have become highly profitable sales volume leaders while the Detroit three struggle to make a buck.

From an outside perspective, the charts and trend-lines paint an uncertain future for US automotive manufacturers. Despite the headlines, this is a historic moment where America’s iconic automotive industry can bounce back. It can be an automotive renaissance, where US automakers will return to the principles that once fueled their success – powered by enterprise software technology.

Matching Supply with Demand, Not the Other Way Around

For the decades that US automakers had been losing ground, domestic brands had become increasingly fixed on single products in a single plant with production lines that ran continuously to cover fixed overhead costs. Even as the competitive alternatives for the American consumer increased, US automakers continued to flood the market with more cars than there were buyers. Even incentivized, low-profit prices intended to create additional demand was not enough to offset the financial hole Detroit found itself in.