Just as American automakers were trying to wean themselves off of fleet sales, just as The Big 2.8 were looking to reduce incentives and bounce back from a slow June, July. In July, practically every U.S. economic indicator took a downturn, from housing starts to the stock market. While American auto sales didn't plummet, they took a major hit. Even Toyota was not immune from the fallout; the numbers rolling in proving that ToMoCo's not invulnerable to a bad market. Damage report Spock.
Passenger Cars
After climbing steadily since October of last year, Chevrolet Impala sales sank back down to their pre-sales spurt level, 20 percent below where they were last year. Ford Fusion sales dropped 31 percent from last year. Thanks to robust sales earlier this year, it's still four percent higher year-to-date than last year. Sales of Chrysler's 300 decreased 15 percent for the month, 14 percent for the year. The Toyota Camry dropped about one percent from July 2006, but it's still up over eight percent year-to-date. None of these models are heavily discounted at the moment; if sales continue to fall, incentives are sure to rise.
Pickup Trucks
Chevrolet Silverado sales rose by about 2K units from June. Comparing July '07 to July ‘06, sales of GM's erstwhile turnaround tiger took a beating, down almost 30 percent. Year-to-date, they shrank by almost seven percent. Perpetually buoyed by incentives, sales of the Dodge Ram pickup fell 10 percent from last July, but less than one percent for the year. Ford isn't offering big incentives on the F-Series ; sales are down 18 percent from last year and 23 percent year-to-date.
Taking a page from their competitors' playbooks, Toyota continued and even increased incentives on the Tundra . It worked. Tundra sales were up a whopping 125 percent from July of last year and 56 percent year-to-date. Based on the first seven months' sales, Toyota will have no problem reaching their first-year sales goal of 200K new Tundras. Still, it'll be interesting to see if sales drop as they start backing off on the rebates.
Truck-based SUVs
As more drivers make the switch from gas-guzzling trucks to slightly less thirsty CUVs and cute utes, the market for traditional SUVs continues to evaporate. The Chevrolet Tahoe showed a slight increase (500 units) from June, but sales are running 12 percent below last July. Year-to-date, the Tahoe's down 16 percent.
The Ford Explorer is lost in the wilderness. Sales are down 30 percent month-to-month and 23 percent year-to-date. Ye Olde Dodge Durango took the biggest hit, with July's sales less than half of June's. The Durango took a 26 percent hit both from last July and overall year to date. Toyota 4Runner's sales were actually up a bit from June, but down 29 percent from last July and 21 percent for the year.
CUVs
CUV sales were down– with one surprising exception. After dropping steadily since March, the Chevrolet Equinox enjoyed a 50 percent increase from June. Unfortunately, it's still nowhere near last year's sales levels, dropping 42 percent on the month and 29 percent on the year.
The Ford Escape didn't. It experienced a sharp drop from June's sales. Still sales remain slightly ahead of last year, up two percent for the month and three percent for the year. The Chrysler Pacifica didn't [sea] fare nearly as well. Sales were down from June, from July '06 (35 percent) and year-to-date (25 percent).
Although the redesigned Toyota RAV-4 's sales year-to-date are up 13 percent, they were down almost two percent from last July.
New Models
The brand new models weren't immune to the pressure drop. The Jeep Compass shed about 800 units from June, the GMC Acadia was down 1400 units, and the Ford Edge fell 3000 units. GM has yet to offer incentives on their Lambda CUVs. Ford and Chrysler have small rebates on the compass and Edge. Again, if sales don't pick up, deal sweeteners are a-comin'.
Total Sales
Total vehicle sales in the U.S. market were down in July. Not only were they reduced from June, they were also down from July of last year. Toyota showed a seven percent drop from last July, Chrysler Group dropped eight percent, Ford was down 19 percent and GM was off 22 percent. It's not quite as bad year-to-date. Ford is off 12 percent for the first seven months of the year, GM is down nine percent and Chrysler is only down two percent. Toyota is six percent ahead of last year.
The Future
Over the past few weeks, Chrysler has announced an extended warranty, GM ramped-up the rebates and Ford is offering low interest rates. It'll be interesting to see if any of this will help sales recover over the next few months, or if the downward spiral will continue.
As the price of autos has increased, but salaries haven’t kept up, these numbers are not surprising. Certainly when you throw in the uncertainty of subprime loans.
BUT, if the 2.8 made the stuff we want, their losses would like Toyota’s and not like, well, theirs.
Great article. Bad news, generally speaking, unless you’re in the market for a new car, I suppose.
I keep waiting for one of the domestics to come up with some radical new incentive strategy along the lines of ‘no payments ’til 2009!!’ to move the metal – my money is on Chrysler.
Surely this approach would mean that no one learned from the employee prices for all period, but someone in marketing will notice that it’s the status quo in the furniture industry and try it out.
The quicker the industry consolidates, the better off all of the remaining manufacturers will be…
Frank Williams
Ford isn’t offering big incentives on the F-Series
Depends. Ford is offering 0% APR on the F-150 and a lot of cash on the hood to move their trucks. F-150 incentives are higher than either the Tundra or the the GM twins. Toyota is also easing back on Tundra incentives for August, while GM increased it’s truck incentives at the same time.
August should be an interesting month.
Is the 4runner still a truck based SUV?
Is the 4runner still a truck based SUV?
In a word, yes.
No one wants no payments deals. Can you imagine have a depreciating asset (spelling) that you make no payments on? Mitsu did this awhile back and people came in a year later wanting to trade and there were so buried, no one would touch them.
I have noticed that Ford often has gaps between the end of one model year and the beginning of the next, resulting in shortages. We were so short of 07 and 08 Super Duties earlier in the year as the model changed over, no the same is happening with the 500/Taurus. We have only 2 07 Edges left, 2 Explorers, 1 500, 1 Freestyle.
Everyone seems to be waiting for 0% on the Super Duties, though.
I can tell you guys from experience that the two worst months from hereonin will be August and November.
At the auctions, October and the first 15 days of November usually offer the lowest returns on fleets and repo’s. This July was a real stinker to… which really does not bode well for the industry as a whole.
Out of curiosity, with the domestic share decreasing every month will this reach some type of critical mass that will accelerate the rate of sales decline?
Ford’s new model…the Precipice.
Ford Edge is just too expensive. Nice looking vehicle though.
hot models,hot sales and a conflagration in market indicators. fair enough. as fair the detroit3 game is.
The Los Angeles Times printed an editorial on the new Chrysler Sebring in today’s edition, to say the least it was scathing. Very negative on the car. That is what people read and that is what many consumers base their decision on certain car companies whether to purchase a vehicle from them or not. No telling how many sales Chrysler cost themselves by putting out another car that is being panned in the press.
Meanwhile, Suzuki’s US sales were down only one percent from July 2006. YTD sales for Suzuki are up one percent over last year.
Frank,
Thanks for the insight.
In regards to the “New Models” section, as an example, it would be helpful to add some context in that paragraph. “The Acadia was down 1400 units for the month.” I found myself wondering, ‘1400 units off of how many? 3k/month? 6k? 12k?
Just a suggestion.
Thanks again.