Union problems, soaring gas prices and a faltering economy made April the worst month for new vehicle sales since 1995. Continued production in the face of diminished demand helped maintain the manufacturer's cash flow, but it lead to the inevitable: swollen inventories. In other words, even as U.S. new car sales go down the toilet, the toilet's backing up. Fix the number 60 in your mind (the ideal number of days' supply for a new vehicle on a dealer's lot) and take a look at what's going down at your local automotive emporium.
You'd think GM's production "hiatus"– caused by the American Axle strike– would have reduced the General's truck inventory. Nope. The U.S. automaker ended April with a 109-day supply of trucks, up from the previous month's 98-day supply. The Buick Enclave's and GMC Acadia's low dealer stock (38 and 54 days, respectively) couldn't offset lingering Chevrolet Silverados (122-day supply), Tahoes (125 days), GMC Sierras (122 days) and Yukons (188 days). All four trucks were more abundant than they were during the month previous.
Ford's truck inventory wasn't quite as scarifying. A 39-day supply of Rangers and a 54-day supply of Escapes helped lower their truck inventory average to 80 days by month's end. Meanwhile, the F-Series' dealer inventory jumped from March's 97-day end-of-month supply, to April's 129 days. The Expedition's inventory rose from 67 to 98 days. Even though it's one of Ford's best-selling models, the Edge went from a 69-day to a 107-day supply.
With Chrysler's plummeting sales, it's no surprise their inventory's up. The lame duck Dodge Ram's inventory jumped from 99 days to a 109-day supply. Dealer stock of the unloved Dodge Dakota ballooned from 73 to 110 days' supply. After starting with an 81-day supply, Jeep ended up with a 102-day stock of Grand Cherokees. The new Dodge Journey was ChryCo's sole bright spot. The CUV started April with a 130-day supply and ended with 57 days' supply on the lots.
Of the two truck-heavy transplants Toyota fared best. They don't list inventory by model, but they finished the month with a 52-day supply of trucks, up only two days from the end of March. Nissan's numbers represent the nadir. Murano (76 days) and Rogue (82 days) clogged dealers lots the least, while Armada (203 days), Titan (232), Xterra (198) and Frontier (137) were super-abundant.
No question: 2008 is the year of the car. As consumers left ten-foot pole marks on high profit trucks and SUVs, car inventory numbers were their best in months. The Chevrolet Aveo dropped to 65 days (from March's 113) and Cobalt finished the month at the 52-day level (down from 75). GM dealers started April with a 37-day supply of Malibus; they ended it with a 36-day supply. A 21-day supply of Impala turned into a 22-day inventory. The only real dogs were the Pontiac G6– which went from a 43- to 64-day supply–and Saab. GM doesn't break out their Swedish division's individual models, but the ostensibly Swedish brand started the month with a 77-day supply, and ended at 151.
As you might expect, Ford dealers are moving more small cars than big. The Taurus started the month at 60 days' supply and finished at 73 days. Volvo ended the month with an 88-day supply of 70-series, up 11 days. FoMoCo stores' supply of Fusions dropped four days, starting at 52 and ending with 48. Their stock of Focus dropped by 11 days, to 43. The 30-series Volvo ended April at a 94-day level, down from 120 days.
April was a mixed bag for Chrysler. The 300 went from a 61-day supply to 82 days, the Sebring shot from 42 days to 69 ,and Avenger finished at the 51-day level after starting at 35 days. On the other hand, Caliber's inventory dropped from 48 days to 39, Charger went from 58 days to 41 and the reportedly doomed PT Cruiser ended the month at 38 days' supply, after starting at the 50-day level.
Toyota began April with a 51-day supply of cars and finished up with a 53-day supply overall. Nissan began with the ideal 60-day level of Sentras and ended with a 59-day supply. Versa's inventory dropped from 53 days to 51. Altima, however, went the wrong direction, finishing at the 71-day level after starting at 48 days. Honda had a 67-day supply of Accord on the lots on April 1; on April 30 they had a 72-day supply. Civic inventory dropped from 52 days to 48 and Fit went from 27 days to 22.
The manufacturers are taking steps to adjust these inventory numbers- GM has even stopped filling orders from dealers for many of their large trucks. However, with sales down it could take months to get things leveled out. In the meantime, look for increased fleet sales and bigger incentives as The Big 2.8 and Nissan do whatever they can to clear the lots. Also look for Toyota to ramp up incentive spending gradually, balancing the need to move the metal against creating incentive-dependent customers.
A sentence leapt out at me in a report I recently read about the Commercial Real Estate market, and how that is tanking:
“In some of those markets, what you saw were properties that were built to service a consumer base that never materialized,” [Spencer Haber, chief executive of H2 Capital Partners] said.
I think we can assume that a similar madness overtook the car market, which in recent years has been devoted to building cars for a consumer market that wasn’t there. It’s probably best to serve actual consumers, rather than hoping for them to “materialize.” This is particularly true when you’re basing your strategizing on wishful thinking, such as “rich people don’t care about the price of gasoline.”
The U.S. automaker ended April with a 109-day supply of trucks, up from the previous month’s 98-day supply.
How is that even possible?
Stein X Leikanger rich people really don’t care but you can’t tell me that the entire SUV and truck market is rich. I’m a landlord, I drive an Xb and many of my tenants drive SUVs and trucks. Go figure.
NickR well when you don’t cut production enough when demand tanks and continue to produce trucks shit happens
@Sherman Lin
Couple incentives, promotions, zero % financing and first year gas rebates, plus the kitchen sink — with people who think money will remain free.
NickR : The U.S. automaker ended April with a 109-day supply of trucks, up from the previous month’s 98-day supply. How is that even possible? By building more than they sold. Last month, overall truck sales were down 17.2 percent in the U.S. GM's truck sales were down 27.3 percent while their factories keep churning them out. Yes, they operated at a greatly reduced capacity because of the American Axle strike, but the few trucks they did manage to bolt together combined with the sales drop created a huge surplus in the pipeline.
As a rejoinder to it, I saw my first full sized pickup advertised for less than 12k in the metro-Atlanta area. The honor went to a Dodge Ram 1500 which the dealer endorsed with a little ’17 mpg’ picture next to the ad.
I predict that within the next two weeks you will be seeing a ‘teaser’ base F150 sold at the same price as well. Apparently the Versa and Yaris are being ‘teased’ a bit as well in this market. The cheapest Versa was 11k, and the cheapest Yaris was $9800. Then again these were five-speeds which are anathema to a market that has the worst traffic in the nation (metro-Atlanta).
One thing I always wonder: when you say “xx day supply”, do you mean an xx day supply at the current rate of sales for the last month, 90 days, last year or what?
Have seen it in housing ndustry, when market s gong well they can wait to buld them fast enough. When bad times come, they cannot give them away, a few of the builders were forced nto C11. They have smartened up now, each ndvidual house s a limted company entity, so that particular house went C11. But when things really went south a builder may have a few too many that cannot fnd buyers. They were forced to changed into a Mortgage as opposed to a buider’s loan ( a mort requires you to pay prncipal plus interest, a builder’s loan is nt only)
When bank payment starts balloonng things doesnt look good at all.
Suddenly dont we all wish that we can drop a very small engine in it.
Car manufacturer has to fgure out a way of storing them new cars.
Nissans’ bg trucks, SUVs doesnt look too good , join the ranks of the bg GM, Ford 150/250/350.
The prce of gas made everybody wake up when the plastic bill piles up.
I heard Ford is decreasing production of the Ranger, probably to kill off its MN assembly plant.
I assume this is the same reason why the PT Cruiser is doing so “well” in this metric.
It amazes me that no one is developing and improving the small pickup truck.
Pickup trucks should return soon to what they were for most of their existence: niche products for people who have utilitarian use for them: work trucks, hauling boats and trailers, farm vehicles, etc.
I guess I am surprised that the cutbacks weren’t enough to draw down the inventory even with the diminished monthly sales. I guess things are grimmer than I thought.
It amazes me that no one is developing and improving the small pickup truck.
There is (sort of). Tata Motors and Chrysler’s Global Electric Motorcars are working to build an EV version of their Ace pickup for the U.S. market by the end of the year or early ’09.
I really like the concept of an electric vehicle but a truck is the last place I’d expect to see an electric unless it is like the Volt – gas/electric.
The best electrics to have reached market were the EV1 and the RAV4-EV. They had/have a typical range of 100 miles and much less with the a/c on, pulling hills or carrying a full load.
I can’t imagine trying to sell something with limited range to people doing WORK – meaning heavy square vehicle going to buy heavy stuff to carry around town.
How about a step back to a Mazda/Ranger/S-10/Tacoma/Nissan with a small turbo diesel in it. 30 mpg unladen with unlimited range.
My concern is that if enough half-baked EVs hit the market people will think of them with the same distrust that some still think of when they reflect on the Olds diesel from the 80s.
How about a step back to a Mazda/Ranger/S-10/Tacoma/Nissan with a small turbo diesel in it. 30 mpg unladen with unlimited range.
The current 4 cylinder Ranger already gets 30mpg. I think diesels are an even tougher sell today, since the price of diesel is a dollar more per gallon then regular unleaded. The Ranger could really benefit from the new Ford ecoboost engine, if they ever decide to use it in their forgotten small truck.
I would say incentives are growing to move vehicles, for example, from the Haddad Dodge advertisment in The Bakersfield Californian newspaper of May 14, 2008:
“All Dodge 1500 Regular Cabs: $7,500.00 off or $3,000.00 factory rebate, plus $2,000.00 owner loyalty plus $2.99 per gallon gas card” So that’s $5,000.00 cash incentives plus the gas card. The ad says they have “ten to choose from”.
I’m curious how Jeep’s compacts (Patriot, Compass) are doing…
GS650G: It amazes me that no one is developing
and improving the small pickup truck.
Man, you took the words right out of my mouth!
Electric pickup trucks don’t make sense to me. I can certainly understand a very small electric around-town car or electric commuter car. However, electric batteries just are not well suited to towing/hauling large, heavy objects down the highway or through rutted off-road farm fields. For those who use a work-truck for work purposes, you need high onboard energy density and the ability to quickly refill during the lunch hour for another 6 hours of heavy work before the sun sets. Pickups really need to go back to weighing 3700 pounds and having 150 HP, 200 lb*ft torque, and a 5-speed manual transmission.
“I assume this is the same reason why the PT Cruiser is doing so “well” in this metric.”
Actually PT crusisers go in groves.. we sat on 8 for a year and in one month sold 5 (end of april and this first half of may).. its like this every year for some reason. The compass is selling pretty well at our dealership, but we are in a mountain area of Pa so 4×4+respectable fuel miliage makes this a winner here.
trk2: The current 4 cylinder Ranger already gets 30mpg.
Ford says the Ranger gets at best 26 mpg. Another website says it gets about 23 mpg combined (26 hwy/ 21 city).
So with a diesel it would likely get better mileage.
Whether it would get sufficiently better mileage to best the current diesel prices I don’t know but the greater durability and torque of a turbo diesel might make it worthwhile. Would prob put the diesel somewhere between the V-6 and four banger in operating costs.
I’d take one and drive it occasionally making it last damn near forever.
GS650G : It amazes me that no one is developing and improving the small pickup truck.
Over on “The Car Connection” today they report Ford is unveiling a plan to build a new mid-sized pickup based on the F-150 chassis (sort of like the way Nissan builds its Frontier on a version of the Titan chassis). According to the article, it’s supposed to be powered by the Ecotech V-6 (I think that’s the 3.5 Liter one) and might possibly be called the F-100.
Ford says the Ranger gets at best 26 mpg. Another website says it gets about 23 mpg combined (26 hwy/ 21 city).
Interesting, here is the fuel economy rating for the 2007 model: (city/highway)
Manual: 24 mpg / 29 mpg
Automatic: : 21 mpg / 26 mpg
The change in EPA mileage testing criteria strikes again!
Here are some figures that J.D. Power gives for “retail turn rate” for April:
wsj
I wonder why so many people are buying the Tundra but not the Titan. If I were looking for a pickup to ‘downsize’ to, the Frontier looks like it’d be a good choice, too.
Also, there was a time when Diesels “made sense.” That day isn’t today- what good is an increase in mpg when it’s completely lost paying more for fuel?
mikeolan,
Consumer truck diesels have almost never “made sense”, except for a *very* limited few. Even when diesel was a buck less than no-lead, the $7-$8000 premium you paid on the truck meant most casual users would *never* realize a cost savings over the ownership life of their vehicle. It’s primarily been an ego thing, since day one.
mikeolan : I wonder why so many people are buying the Tundra but not the Titan. If I were looking for a pickup to ‘downsize’ to, the Frontier looks like it’d be a good choice, too.
The Titan (as well as Armada and the Infiniti QX56) has been extremely unreliable with lots of drive system and brake problems. The V-8 engine is loud and the truck does not have a very large payload compared to its competitors.
The Frontier (which is built on a version of the same chassis as the Titan) has been surprisingly trouble-free and is probably the best small pickup you can buy in the U.S. It doesn’t share any engines with the Titan/Armada/QX56. Reports I’ve read say that the V-6 Frontier is faster than a V-8 Dakota. The Frontier probably weighs more than it should and the gas mileage isn’t all that great, but it’s a tad better than the full-sized pickups.
Scottdb: Consumer truck diesels have almost never “made sense”, except for a *very* limited few. Even when diesel was a buck less than no-lead, the $7-$8000 premium you paid on the truck meant most casual users would *never* realize a cost savings…
The difference between a 6.0 gas and a big Duramax diesel might well be that expensive but I meant a small truck with an engine like the VW four cylinder turbo diesel. I think the last time I checked there was a $2K difference between gas and diesel versions of their car.
No way would I want to traditional diesel found in the domestic trucks. WAY too locomotive/dump truck like. Might be useful in a big truck but in a small pickup it would be like operating a locomotive.
No, what I’d want is a 2.5L turbo diesel like the VW which makes little noise, little soot, and gets outstanding mileage. It would cost somewhere between the V-6 and four cylinder to operate I’d guess unless diesel got cheaper again and then it would be really cheap to operate giving it the cost of a four cylinder and the power of the V-6.
There are diesel engines and then their are diesel engines .
There are diesel engines and then their are diesel engines .….
Thats right. And if you are buying a pickup to do “pickup” things, you know like towing, working, long distance hauling, the Duramax is the diesel. If you haven’t been in a truck with this engine, try it first. They are the torque monsters that you would expect, but they are much quieter that you think, they idle well, and they emit zero black smoke. Very fast, too, especially considering what it has to drag around. Calling this engine a lump is inaccurate to say the least. If you can get past the part that it is not made abroad, you will find the Duramax to be a pleasant engine when in docile mode, and you bet, a locomotive under full boil. Just like a real diesel should be.
golden2husky: If you can get past the part that it is not made abroad, you will find the Duramax to be a pleasant engine when in docile mode, and you bet, a locomotive under full boil. Just like a real diesel should be.
If I had a big truck (I lust after the big crew-cab non-dually trucks) it’s the engine I’d want I suppose but in a family sedan it is not the engine I’d want. I sat at a light yesterday next to a Duramax and it was like sitting next to a locomotive at idle. Inside the truck was prob pretty quiet but my windows were open and I was 4 feet from it it’s fender. That engine does it’s job well.
A VW Beetle stopped at a stop sign next to me this morning and it made much less noise. Yeah, much less power but how much power does a small car need. That’s enough for a compact. That engine does it’s job well too.
What I’d want in a Chevy S-10 (the perfect small truck for a diesel) would be somewhere in between those two. I don’t need a big Duramax, but maybe have of a bigger VW diesel like a 3.0L six with a turbo or two. GM has all sorts of diesels they could federalize from their overseas divisions. Pick a good one though GM.