Last month, I field tested a new methodology for analyzing the American car market. Reader feedback on TTAC’s month-by-month sales charts of “key” U.S. models was overwhelmingly positive. Your most excellent comments and insightful methodological suggestions were noted, logged and, where possible, incorporated. OK, so, May car sales were the highest so far this calendar year. Without further ado, here’s how our 19 models floated within this rising tide.
Passenger Cars
Taken as a whole, U.S. passenger car sales showed a sharp upturn in May. The Chevrolet Impala , Chrysler 300 and Toyota Camry all rebounded from their April dip. Ford did not share in this good fortune. After climbing steadily, Fusion sales dropped below 2006 levels for the first time since last November.
The Camry’s still the segment leader, but the Impala’s coming on fast. The mid-sized Canadian is now selling more briskly than it did during GM’s epic “fire sale for everyone” back in 2005 and was GM's best-selling passenger car in May. That said, GM lavished $1500 in incentives on the Impala– the highest amount they offer on a Chevrolet passenger car.
Pickup Trucks
For the first time since February, Silverado sales have topped last year’s levels. The good news comes with a minor caveat: GM is still producing and selling the “Classic” (non GMT900-based) Silverado, a cheaper model that’s buoyed by $2k to $3K rebates and dealer incentives. Still, the new model’s leading the charge.
Meanwhile, assisted by massive incentives (up to $5K rebates plus dealer incentives) the Dodge Ram also bested last year’s number. Chryslerberus is planning a redesigned Ram for 2009 with diesel engines across the board. They’ll most likely increase the incentives to keep current sales from tanking in anticipation of the new model.
Ford's F-Series continues to show lower sales than in previous years. Look for Ford to add to its $3k rebate as the Glass House Gang fight to keep their perennial best-seller at the top of the sales charts.
Tundra sales showed another record month. It remains to be seen if the model’s camshaft problems will damage the Tundra’s momentum, or if Toyota’s rep for bulletproof build quality will reduce the issue to a minor bump in the road.
In any case, the Toyota’s entry into a declining market has had the anticipated effect: pickup truck margins are down across the board.
Truck-Based SUVs
Tahoe and Explorer customers shrugged off high gas prices. Tahoe’s May sales have remained steady for the past three years. Explorer sales reached the highest level since last September.
Dodge and Toyota weren’t so lucky; Durango and 4Runner sales both continue their downward trajectory. The Durango has practically flat-lined in the mid-4K range, while 4Runner sales are the lowest they’ve been since last October.
Small SUV/CUVs
CUV sales split into two distinct camps: the old and the new. Sales of the elderly Chevrolet Equinox and Chrysler Pacifica fell well below those of previous years. If Chevy and Chrysler want to remain competitive in this hot market segment, they have to hit refresh in a big way, and fast.
Sales of the recently refreshed Ford Escape and Toyota RAV-4 rose sharply. The more boldly grilled Escape hit an all-time high in May, with the gas – electric hybrid model accounting for 14 percent of the total. RAV-4 sales were up by more than 2K units over last month, and against the same month last year.
New Models
All three of the new-for-‘07 models I’m tracking showed increases in May. The Jeep Compass rebounded slightly above last month’s performance, but still remains below the curve for the year. The GMC Acadia continues almost straight-line steady growth. After an inexplicable dip last month, Ford Edge sales are back, and they ain’t bad.
Total Sales
GM, Chrysler and Toyota all saw higher sales in May than in April, and with higher sales than May ’06. Even though Ford showed an increase from April, they still remain well below the previous years’ sales levels. (For cumulative sales YTD, click here: GM, Chrysler, Ford, Toyota .) But the numbers mask a worrying development.
In spite of The Big 2.8’s pledge to wean themselves from incentives, they haven’t. In May, GM’s incentives rose 6.1 percent (year on year) to a $2,950 per vehicle average. Ford’s incentives rose by 4.6 percent to $4,040 per vehicle. Chrysler's incentives soared by 7.1 percent to an average of $4,178 per vehicle. (Toyota’s incentives averaged $1,140 per vehicle.)
This does not bode well for Detroit. In 2006, GM and Chrysler’s North American operations lost an average of $1,436 and $1,072 respectively per vehicle. Ford lost a whopping $5,234 per vehicle. In contrast, Toyota and Honda made $1,200 on every vehicle sold. The greater Detroit’s incentives, the lower their profits. Or, let’s face it, the greater their losses. It’s still early daze, but 2007 is turning out to be a “make or break” year for The Big 2.8.
What about the non big-4? How did Nissan, Scoobie, Volvo, etc do?
I don’t think the big 4 are the only important indicators. I see a LOT of Mazdas & Nissans around here.
How is it that the big 4 all appear to start the year with about 200K sales right off the bat?
Ford lost over $5,000 per vehicle???
Did anyone actually believe GM when they said they were going to reduce incentives and keep them down? I sure did not. With Toyota’s attack on the truck market, I don’t think the American Big 3 have any choice in terms of incentives. GM also seems to be keeping incentives and fleet sales high for the Impala in order to put on a lavish show that the Impala is very competitive.
A small point not mentioned: Toyota outsold Ford for the month of May.
All of the media yahoos who claim the Tundra is a “failure” continue to be proven wrong. Since it’s introduction if February, Tundra sales have been on an upward climb every month. Toyota is well on their way of meeting their 200K annual sales goal for the Tundra. At this rate, the Tundra will outsell the GMC Sierra very soon. In May, Tundra sales were within striking range of the Sierra.
Ford lost over $5,000 per vehicle???
On average, Ford lost $5,234 per vehicle before taxes last year.
To be fair, the truth is the domestics said they would scale back incentives on their new product, which they have done. For instance, $1500 on the Impala is far less than what was offered on the previous version. Of course, point still made that the Impala is only 1-2 years into its life cycle and already has $1500 on the hood. Not time to panic but you should feel free to remove the protective plastic box that is currently covering the button.
As mentioned above, there seem to be quite a few new Mazda’s and Nissan’s on the street.
Last week I saw the first ever Fusion on a indian reservation (actually two of them but the only dealer within 140 miles is a Ford dealer). While reading the newspaper I saw an ad for new Mercury Grand Marquis’s (sort of like a Crown Vic?) for $11K off list (manufacturer and dealer incentives) and instead of the 1 at this price it was 36 at this price.
Incentives are an intrinsic part new vehicle, and CPO vehicle sales process. May was a good new vechicle sales month across North America, it goes hand in hand with a strong dose of incentives.
Every manufacturer plays the “incentive game” for a myriad of reasons, and agendas. Some manufacturers have their “incentive tactics” fine tuned at a higher level than others. Other manufacturers use “monthly incentives” to steal business from a competing manufacturer.
Measuring the sales rate of various makes and models from one year or one month to the next is almost a futile excercise. Few manufacturers compete “heads up”, is a particular make and model that good by itself(on the motor), or does it need incentives(motor+bottle).
It makes sense to measure sales rate and incentive rate, achieving meaningful comparisons from month to month or year to year is increasingly challenging.
The best part is that customers LOVE IT, its clear that “cheap money” – “freebies” – “take me out of my submarine” takes precedence over the actual product they are financing or leasing.
With finance terms getting longer, incentives / rebates are an intrinsic part of the process to “get someone out of his vehicle at 36 months of a 72 month term”.
Manufacturers use incetives to “push the metal” while consumers use icentives to “get themselves out of their current vehicle”.
The “financial / incentive package” is an intrinsic part of the sales process. The residual values of lease return are starting to creep into the picture as an additional variable.
What about the Koreans? Hyundai’s got to be one of the hottest rising car companies right now, it’d be interesting to see how they compare to the ‘established’ companies, and whether they really are growing as fast as they claim. And what about compact cars – Yaris, Accent, Fit, Aveo, Rio, etc.? With gas prices the way they are, I’m sure these cars must be selling well. I wonder if there’s any correlation between gas price changes and compact sales?
The gas price isn’t at the point where it will affect decisions yet, people were filling up their boats at $4.79/gal 500 bucks a pop just as always.
If anything you see more houseboats pulling the regular boats. :-)
I just wanted to point something out about the ‘money lost per vehicle sold’. I think some people might be thinking that it actually costs Ford $5000 more to produce a Fusion than the get by selling it, and that if they sold less vehicles, they’d lose less money.
It’s my understanding that the ‘money lost per vehicle sold’ stat is simply the overall net profit (or loss) of the manufacturer devided by the number of vehicles they sold.
It seems to me what’s killing the domestic automakers is thier fixed costs and production setup. The incentive game is simply a result of their way of doing business.
If Toyota a Nissan product were not selling, they would simply lower production to match demand. The domestics can’t do this because they have to pay their workers and the health care of their retired workers if they make cars or not.
As an example (these numbers are made up) Ford can lose $4000 due to incentives on the sale of an F150, or they can lose $10,000 paying their workers not to make that same F150. Crappy choice that they can hopefully begin to rectify this September with the new Union contract.
Chryslerberus – classic, Frank! It’s a penta-hemi headed beast of mythology, now remastered in CGI versus Eweayedubya for a late summer blockbuster steel cage showdown. I do hear the Pacifica’s on borrowed time without a direct replacement.
Is it RAV4 or the CR-V that’s the best-selling CUV these days?
Is it RAV4 or the CR-V that’s the best-selling CUV these days?
Total sales, year to date:
CRV – 84,464
Escape – 73,058
RAV-4 – 72,447
My wife is looking at new CUV’s and thankfully there is a lot to choose from. Her favorite is the new Edge–she loves the way it looks and the sunroof–but to option it to her liking puts it out of our price range. I like the CX-7 best for her, but premium gas and a still-high price has me thinking the CR-V (or possibly the RAV-4) is the best choice for her/our needs. We walked on a Chevy dealer last week and looked at an Equinox…what a horrid vehicle. Nowhere near competitive with the Japanese offerings, it had a dime-store interior and ghastly Chinese-built 3.4L V-6. My wife, who knows nothing about cars and drives an old Sebring, said the Chevy was “dowdy”. She was absolutely right. And this is only a 2-year old design!!
Very good: data is clearly explained and shown. Best sales summary I’ve seen – rest of media shows data in confusing way.
Impala: very respectable volume. Imagine Big2.5 selling *cars* – not trucks (imaging a four year going to NASCAR and asking his dad “those trucks are funny looking dad!”. Dad says “actually those are cars son – I used to own one when I was young”)
First of all, I’m pretty sure I speak for all who frequent this site that you folks do excellent work. The monthly reports are terrific.
A suggestion for another article: take 10, 15, maybe 20 years of data of the survey companies who do the first time quality surveys and 3 (or is it 5) year quality surveys and see where each of the car makers have been over that time period. It might be interesting to see which car makers are consistent (good or bad) over the years and which ones show improvement (or not) over the years. Just throwing that out there.
I wonder what the breakout for fleet versus retail is for the Chevrolet Impala? This car had a jump in sales that looks a bit too big…
Excellent charting and summaries Frank!
People, click on TTAC’s Michelin ad and check out their new tires!
EJ, last I heard, Impala fleet sales were well over 20% of total sales. As for an exact figure, perhaps someone else has that information.
Well over 20% of sales of the Impala to fleets isn’t too bad — for GM. The fanboys on Edmunds are going gaga over this car, saying it’s going to beat the Accord in total sales this year and giving the Corolla a run for the money. We’ll see.
It would be nice to know what the real fleet percentage is. The Accord’s is minimal.
BTW, I think these sales summaries are great, Frank!
The real story here isn’t GM. It’s Ford and Chrysler.
I have no doubt that Chrysler/Cerebrus will be the first to use Chapter 11 as a VERY strong weapon for change. They may not even need to file it… just wave the stick and summon the attorneys.
Ford will be in a very different mode. The models they have been releasing are conservative, cheap and bland. There isn’t a single model they have which would make anyone exclaim, “Best of the Bunch!”
“Ford will be in a very different mode. The models they have been releasing are conservative, cheap and bland. There isn’t a single model they have which would make anyone exclaim, “Best of the Bunch!””
To be fair, that’s what Honda and Toyota produce (Toyota more so), and they sell great, despite the fact they’re conservative, cheap and bland. Okay, maybe not so cheap, but Toyota and Honda don’t knock a grand off the price. Still, though, Ford’s doing what Honda and Toyota have been doing. Now, if only Ford would get some concessions from the unions, they might be alright.
Once again, excellent writing on an excellent site.
How much of these incentive-boosted Big 2.something can be traced to the post-9/11 Fire Sale to Everyone promotions? While I can somewhat understand why the American car companies would try a huge incentive program like this to boost sales in a time where there was a lot of unknowns regarding war, oil, and terrorism, I do wonder if they actually had an end-game planned. If they did, that sure did fail. We just became addicted to expecting 0.0% financing with thousands on the hood. There are now millions of American car owners that have seen the resale value just plunge and vanish.
What about Toyota? I don’t know if it is this market, but for the past several years, all Toyota commercials have been some god-awful cover of a once popular song, a spinning car, and 45 seconds of the latest deal (forget about marketing the actual car like Nissan, BMW, and Honda.) I’m wondering if their reputation is keeping the value high.
If Ford is losing over 5K per vehicle (that is just staggering), the first thing that hit my mind was to have Ford ease off of the incentives. Think about it – have them be up front with the consumer. Tie these print and TV and Internet ads with the introduction of some new models (that time has passed for now.) Tell us that Ford is concerned with people’s resale values, and the perception of quality that comes with a better vehicle purchase. Focus the ads on how GM and Chrysler have cheapened themselves to like a drug dealer – they get people hooked on cheap and incentive filled cars only to get burned at the end. I honestly think they could pull it off – go on the offensive against the Wal-Mart sales tactics of the other Big 2.
(Oh and Ford? Please do something about the bland and boring stereo faceplates – when you hop into a high performance Mustang, the last thing you want to see is yet another plain, flat, dull center console with the same switchgear in a Focus.)
““Ford will be in a very different mode. The models they have been releasing are conservative, cheap and bland. There isn’t a single model they have which would make anyone exclaim, “Best of the Bunch!”
Actually, the Fusion and EDGE have been very refreshing and different. So clearly, they are trying.
Plus the more exciting cars are left to the niche brands like Subaru or Suzuki (AWD/4W on a SX4, was interesting to say the least)
Saying GM (or Ford etc) loses “x thousand per vehicle” is misleading.
GM has large fix costs that need to be paid (several billion to develop a platform,money for research, pensions). They also have “variable costs” that depend on each car (labor, parts, etc).
Assume GM spends 15k to make a car, has fixed cost per car of 5k, and sells the car to the dealer for 17k. They lose 2k per car at this rate, but they are still better off selling it – selling price exceeds variable costs.
Sales increases will decrease loss per vehicle and at some volume you can make a profit.
This does not mean GM will make huge profits, but it does explain why companies sell cars they “lose money” on – they are better off selling it.
This explains why full size trucks are such a gold mine. A new platform costs billions, regardless of sales volume. If you can sell a million trucks a year for five years you are spreading the development cost over a large volume.
Great work Frank, the numbers speak for themselves.
The Impala closing in on Accord,Silverado sales strong.
Yeah the tribe has spoken GM is not getting voted off the
island yet.
The runup in Impala sales is surprising. Perhaps these are Detroit loyalists who are moving back to cars from their Explorers, Trailblazers and Tahoes? The rising cost of fuel and sudden loss of Fashionable Status for SUVs might be getting people back into cars.
The recent mild refresh of the Impala is an OK effort, but there is nothing especially notworthy about this now very old design to explain a big uptick in sales. Normally at this stage of the product lifecyle a vehicle is ramping down. Detroit loyalists moving back into cars is the most reasonable explanation. I also wonder if some Impala sales aren’t a result of the implosion of the Pontiac and Buick sedan business in the US over the past five years. A happy Pontiac Century owner ready for a new vehicle is probably taken aback by the G-__. At least the Impala name is recognizable.
The runup in Impala sales is surprising. Perhaps these are Detroit loyalists who are moving back to cars from their Explorers, Trailblazers and Tahoes? The rising cost of fuel and sudden loss of Fashionable Status for SUVs might be getting people back into cars.
That’s exactly what popped into my mind when I read that news as well. You have to wonder what is responsible for the Impala’s increase in sales. Definitely not folks trading in their Accords and Camrys, that’s for sure. Gas prices and dwindling status for SUVs are my guesses. And you just can’t forget that 1 in 5 sold goes to fleets. I’m actually surprised it’s that low.
Unless these sales numbers exclude sales to their own Rental companies these numbers arent relevant. I cant remember the last time I’ve seen an Impala on the road much less a new one.
You have to wonder what is responsible for the Impala’s increase in sales.
I believe that one thing that we need to bear in mind is that unike most of the other automakers, GMNA reports deliveries to dealers, not retail sales. (You can find them on GM’s website here: http://www.gm.com/company/investor_information/sales_prod/hist_sales.html ) GM’s figures are not a report of what Joe Consumer purchased, but what was dumped into the dealer network.
As Frank alluded to, the rebates (which Rick Wagoner previously claimed were becoming a thing of the past) should make it clear that the bottom line news on the Impala is not so good. The subtext of the story is that GM is most likely resorting to the usual Big 2.5 tricks originally used by Henry Ford — using the dealer network to hold excess inventories.
The $1,500 factory incentive tells you that the boys in headquarters know that there is no market demand for these cars at retail. If the car was really that popular, there would be no need for such a high rebate. if there was any rebate at all. In comparison, rebates on Camrys and Accords, when they exist at all, generally don’t exceed $500 per unit, and are not offered frequently.
Headquarters also knows that without rebates, the dealers would otherwise be stuck with the cars, and that the rebates are needed to move the metal into the hands of the ultimate buyer who won’t pay anywhere near MSRP for them. If they were to dump these cars onto the dealer network without a rebate to match, the dealers would cry foul because the cars would languish on their lots, consuming their holdbacks and their profits along with them.
It would be interesting to get the inventory data to put these deliveries figures into context. And given that the summertime mid-year fleet purchasing period will soon be upon us, I won’t be surprised if many of these cars end up doing fleet duty, after all. Autoweek reports that between September 2006 and February 2007, GM’s fleet sales were at 26.6% of their total sales: http://www.autoweek.com/apps/pbcs.dll/article?AID=/20070427/FREE/70426003/1528 You can bet that the Impala (along with the Cobalt, Malibu and G6) dominate the cars that comprise that 26.6% figure.
26theone
Well they are all over Florida and they are not all rentals either. I suspect that many are canabilized sales from other GM brands. Unlike may on this forum I like the Impala but I cannot fathom why someone would buy (pay more) for a Pontiac GrandPrix or a Buick Lacrosse.
Pch101: That’s not the sales chart for GM. The sales chart is located at http://media.gm.com/us/gm/en/ (specifically, for May, it’s at: http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=3&docid=36708 ). These charts mosty certainly are sales to the final consumers. The easiest way to tell is that there slots for long discontinued models (2006 MY or earlier) that occassionally have a sale or three listed on this chart, which meant some old car gathering cobwebs in the back of some rural dealer finally sold. For example, 8 Chevy SSRs, 2 Saab 9-2xs, 7 Hummer H1s, 494 Pontiac GTOs, and 130 Montana SV6s were sold in March, all of which were discontinued for 2006 (so there would no longer be deliveries of such from the factory).
These charts mosty certainly are sales to the final consumers.
I’m sorry, but you are mistaken.
Firstly, the links that you have provided offer data that is exactly the same as what I have provided. The appearance is different, but the numbers themselves are exactly the same. (Feel free to check these for yourself.)
I provided a link to the investor section of the website, while you offered a link from the PR department. But in both cases, the press release and delivery data are themselves identical.
Secondly, note the headings for the tables. They are for “deliveries”, not for “sales.” “Deliveries” are vehicles shipped to dealers, not sold to retail customers.
Note that the press release shows the difference between deliveries and retail sales, with deliveries of 375,682 vehicles and retail sales of 279,731 during the month of May. Note further that the table provided in both the investor and PR link add up to total monthly units of 375,682, the same as the “delivery” figure in the first table in both the PR department and investor relations links.
This differential between deliveries and retail sales results in a gap of roughly 96,000 vehicles. With a gap that substantial, the rebates are not at all surprising — they will need them to move the excess inventory. The vehicles are being delivered to the dealerships, but the dealers are not moving them as quickly, hence the large gap.
That means increasing inventories at the dealer level, which in turns means the need for rebates to increase the pace of inventory turn and pffset the dealers’ carrying costs. GM is effectively shifting the carrying costs to the dealers, and trying to make up for it via the rebate. Now I have to wonder whether they may also be some additional factory-to-dealer incentives and marketing programs to further supplement the inventory crush.
Ford lost $5,234 per vehicle in 2005? Wouldn’t they be on track to lose even more due to slower sales this year than last, and the fixed cost being spread over fewer vehicles?
No wonder Billy Ford is singing the blues! ;-)
Sales statistics by model for Sweden may 2007
In Sweden Audi is very popular, it outsells BMW, which outsells MB. But Volvo and Saab tops the chart, who could have guessed?
“country” of “origin” at the top: se, se, se, se, de, de, de, de, fr, de, de, jp, cz, jp, de, cz, fr, de, se, se, fr, de …
Very few asian cars compared to the USA.
1 VOLVO V70
2 SAAB 9−3
3 VOLVO V50
4 SAAB 9−5
5 FORD FOCUS
6 VW GOLF
7 VW PASSAT
8 AUDI A4
9 PEUGEOT 307
10 AUDI A6
11 OPEL ASTRA
12 TOYOTA COROLLA
13 SKODA FABIA
14 TOYOTA AVENSIS
15 BMW 3−SERIE
16 SKODA OCTAVIA
17 RENAULT MEGANE
18 BMW 5−SERIE
19 VOLVO C30
20 VOLVO S80N
21 PEUGEOT 207
22 VW POLO
23 HONDA CR−V
24 VOLVO S40N
25 RENAULT CLIO
26 VOLVO S60
27 TOYOTA YARIS 41
28 TOYOTA AYGO
29 TOYOTA AURIS
30 PEUGEOT 407
31 MERCEDES C−KLASS
32 CITROEN C4
33 FORD FIESTA
34 TOYOTA PRIUS
35 AUDI A3
36 MAZDA6
37 VOLVO XC90