It's a bit early to declare February the beginning of the long-anticipated new car sales face plant, what with President's Day sales and a couple of weeks to go, but the Wall Street Journal reports that the industry took a 16 percent dive so far this month. Zoom in on the main players and folks, these decade-low numbers [via J.D. Power] are downright scary. "General Motors Corp., riding momentum created by updated products and hefty incentives, recorded the only sales gain among major manufacturers last month. The latest numbers indicate GM ran into a roadblock during the first 17 days of the month, with dealers selling 31% fewer vehicles than in the first 18 days of February 2007… Chrysler LLC experienced a 27.5% decline despite a recent move to offer more free features on its cars and trucks." CNNMoney reports that "shares of automaker General Motors Corp. fell nearly 6%, making it one of the biggest losers on the Dow 30 Thursday afternoon, as investors were dismayed by weak economic data released earlier in the session." And that was BEFORE this information was released…
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GM’s investment in ethanol-based fuels – which have recently been projected to raise emissions by up to 50% over the next 30 years if implemented as a replacement for fossil fuels – is just another death stagger.
Also, how long can Chrysler manage these sales losses? The silver lining for them is that these terrible sales give them wiggle room in dealing with Plastech, et al.
which have recently been projected to raise emissions by up to 50% over the next 30 years
And the price of wheat has doubled, partly because farmers have converted wheat fields to corn for ethanol. So, we can pollute a little less while a few more people starve. Let them eat cake?
Really the best thing we can do now is not buy hybrids, E85, or even diesels. The best thing for us to do is also the hardest – and that is conservation.
Conservation worked wonderfully in the late ’70s and early ’80s.
The problem was that once the threat of “$2 gas by 1985, $3 by 1990” didn’t materialize, people
stopped carpooling, stopped riding public transportation, bought bigger vehicles than they needed, moved farther from work to “more desirable” developments in Outer Suburbia.
I myself bought a v-6 Grand Caravan AWD to replace a 4-cylinder Voyager in the ’90s, though I never got stuck in snow with FWD and we got by with a short-wheelbase van when all the kids were still living with us.
My current Aztek actually beats the highway mileage of either of my 4-cylinder Voyagers.
It also beats the city miles of the ’89 with 3-speed auto., but not that of the ’84 with 5-speed manual. It beats the GC by 5-6mpg in town and 7 mpg on the road.
I don’t need anything bigger or heavier than an Aztek or the now-discontinued small Caravan. This little Ford Transit that’s supposed to arrive here in 2010 looks promising, if they don’t fatten it up in the meantime.
Once conservation starts bringing down gas prices, we need to resolve to continue to conserve. Perhaps a large gas tax partially offset by income and payroll tax reductions and higher EICs for the poor will keep us on track.
I went to my local Mazda dealer to drive a Mazda 3 5-Door.They had no Touring, or Grand Touring models, just the low line Sports. It dosen’t take an MBA to realize you cannot sell what you do not have.
William442
Not surprising. I’ve always believed that Chrysler would be the first on in Chapter 11 and it looks like they may actually get to that point within the next two years.
By the way, if folks saw the trade-in data on Chrysler’s cars, they would run away in terror. The same is true for VW, Saab, Land Rover and Hyundai.
Steven Lang – please tell us more about trade-in data for the brands mentioned.
Any word on how big of a drop the Japanese brands so far have seen for the month?
“if folks saw the trade-in data on Chrysler’s cars, they would run away in terror. The same is true for VW, Saab, Land Rover and Hyundai.”
But the flip side is perhaps those looking for value and a bargain should begin looing at a used car from those brands.
Steven Lang, I’d like to see a TTAC article on this subject covering all the major brands.
In the 1950s, it was possible to see which domestic brands were dying by looking at both trade-in values and the number of owners who intended to purchase another vehicle of the same make. I’m guessing that with Chrysler’s constant overproduction over the last few years, supply has outpaced demand for quite some time, which certainly hasn’t helped resale values.
Two anecdotes:
This past January my wife and I visited Disneyworld. Based on a visual count, one would think that Chrysler has about 35 percent of the new vehicle market…until one releases that these were all RENTAL vehicles (we had a PT Cruiser).
Last week we visited my wife’s family in Indiana, Pa. This is a rural area that is still faithful to domestics, in particular domestic trucks.
Her cousin recently completed nursing school and traded in her 2002 Dodge Stratus on…a Nissan Rogue. When I asked her why she bought the Rouge, she replied, “I didn’t want anything domestic after my experience with the Dodge.” It gave her plenty of trouble after 50,000 miles, and was basically worn out at 100,000 miles.
Her parents, by the way, are loyal Chrysler owners, so this hurts…
By the way, if folks saw the trade-in data on Chrysler’s cars, they would run away in terror. The same is true for VW, Saab, Land Rover and Hyundai.
Where does the average person have access to this info in the most timely way? KBB, NAPA?
And for any dealership people who’d care to comment, what do dealers do when they see this kind of trend? I assume they play hardball with customers on their trades, but what do they do with their used stock? Hope for a rube, send the stuff off to auction, cut prices to offload and stop the bleeding? Tough decisions.
I submitted an article a couple weeks ago about trade-in’s from a 25 state strong dealer network. Which brands were able to keep their customers for the long haul (traded-in at 150k+), and which ones were getting ditched quick by their owners (less than 100k).
It has to work it’s way through the TTAC funnel first. In time, you’ll see it and it should provide a few surprises.
The fact that I can also add new trade-in data (4000+ new trade-in’s every week), may make it a mainstay at TTAC. We’ll see what happens.
Shermin Lin: But the flip side is perhaps those looking for value and a bargain should begin looing at a used car from those brands.
With the exception of Hyundai, the people I know who have owned those brands can tell you why they have low resale value…because they are in the shop on a regular basis.
The extra aggravation and cost of repairs isn’t worth the money saved on initial purchase price…
Also today: Nissan’s Ghosn says US auto market in recession
Nissan has a glut of 07/08 Muranos with 1.9% APR.
Acura has a glut of 08 TL’s with 2.9% APR.
Lexus has a glut of 08 IS250’s no word on special APR for purchase but local dealers have special lease rates.
VW has “sign and drive” deal with no $$ down but not really a deal.
Subaru has special low APR on most of their models.
Waiting patiently for low APR on IS350’s….