The Detroit Free Press reports that early August sales estimates show a 14.4 percent drop in new metal moved. But don't turn off your pacemaker yet; the biggest shocker is that Detroit is bearing the overwhelming brunt of the downturn. Estimates from Edmunds show that Chrysler sales dropped 34 percent, GM slid by 27.5 percent and Ford endured a 16.3 percent drop compared to August a year ago. Toyota continues to shed sales but grow market share, slipping by half the industry average at 7.2 percent. The winners in August were Honda, which posted a 0.9 percent increase, and Nissan which defied the market to bump sales by 2.3 percent. On the whole, the market appears to be picking up slightly, with a 13.1m seasonally adjusted annual sales rate (SAAR) up from 12.6m in July. With consumer confidence rising in August, the overall economy appears to be taking its Prozac, but don't expect an auto sales turnaround this year. GM's sharp losses show that even with once-popular "employee pricing" incentives, consumer demand for cars isn't what it once was.
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I’ll be on vacation and Internet-less next week, but it’ll be interesting to see the sales results when I return home. Sounds like the same thing again though. GM, Ford and Chrysler down severely, while the non-domestics are either down slightly, or up slightly. It’s going to get much worse before it gets better. Lack of new, fuel efficient product isn’t helping the domestics. 2010 can’t come soon enough for those geniuses.
Its going to be interesting to see the devastation caused by Chrysler’s pull out of the lease market. I live in Detroit and can attest that just about every dealership in southeast Michigan thrives off leases. GM and Ford too, but so far as I can tell, they are still offering leases on most products.
Taking a look at the numbers just from Michigan would be an interesting story for you guys. I think the state as been a dumping ground for new trucks for a long time. Family and friends of employees have always been able to get EXTREMELY low lease rates on new cars and trucks. Everyone drives a new car around here. I suspect every two out of three Chrysler dealers in Southeast Michigan will go belly up without leases.
Could you post Subaru’s sales numbers too?
” This month’s new vehicle sales (including fleet sales) are expected to be 1.26 million units, a 14.4 percent decrease from August 2007 but an 11.4 percent increase from July 2008…..
Ford will sell 178,000 units in August 2008, down 16.3 percent compared to August 2007 but up 12.9 percent from July 2008. This would result in a new car market share of 14.1 percent of new car sales in August 2008 for Ford, down from 14.4 percent in August 2007 but up slightly from 13.9 percent in July 2008…..
Edmunds.com predicts GM will sell 280,000 units in August 2008, down 27.5 percent compared to August 2007 but up 19.9 percent from July 2008. GM’s market share is expected to be 22.2 percent of new vehicle sales in August 2008, down from 26.2 percent in August 2007 but up from 20.6 percent in July 2008.”
So, while the industry grew 11.4% compared to July 08, GM sales increased 19.9% and it gained 1.6% market share. So the employee pricing certainly did something for them….whether thats enough I dont know…I wonder what the inventory numbers look like
http://www.pr-inside.com/edmunds-com-forecasts-august-auto-sales-r777671.htm
It’s interesting to contrast the TTAC headline with, say, Forbes…
“August auto sales to get boost from GM promotion”
Does anyone track Edmunds estimates to see how close they usually are, because I seem to remember them missing the mark by a good deal.
A little research:
July estimates – Ford: -7.4, GM: -15.7, T: -3.3, H: +13.3 N: +0.2
July actuals – Ford: -17.1, GM: -26.1, T: -11.9 H:-1.6 N: +8.5
Wait until Honda starts getting volume Civics out of its new Indiana plant. Then even the Focus and Cobalt will get hit. What is left for the domestics?
I see a lot of new Civic Hybrids and Versa’s with paper plates driving around.
Somewhere it’s written that Mitsubishi has 1% of the US market.
They plan on initially making a whole 2,000 MiEV’s then later ramping up to a big 10,000 units. What a bunch of schmucks.
Those Asian auto manufacturers are so timid, cautious, patient, and hesitant. Chicken shit, that’s what they are.
Where’s all their gusto, bravado, and testosterone. Don’t they have any desire to change the world, rule the world, or be number one? They don’t want to be the best?
I want to see some radical aggressive action taken by these lax auto manufacturers. The market needs some excitement.
GM may have once again proved that a fire sale moves the merchandise. This is a failed policy dating to the 1990’s. With materials and energy costs going up how do they make money with 20-40% taken off cars and trucks?
Further, after all the brave commentary from the domestics that no more fleet sales, no more give away discount programs, we find that the same old unprofitable ways continue. It can be safely said that if the domestic three tried to hold anything like the gross profits of the foreign builders the stuff would stay forever on the dealers lots.
Further, no one goes domestic shopping until the fire sale sign goes up. Is this a formula for the future? I know, it’s just until we move the current bloated inventory, then we will sin no more.
How much will the domestics have to raise actual prices to make money. They are selling cars but taking a terrible loss. Either they have to raise prices considerably or cut quality/costs. They can’t continue indefinitely to sell as they have been. Oh, I forgot, washington will give them money so they can continue their wasteful ways!!!
I’m not sure GM sales tanked in August.
I’ve been shopping for an HHR. Most dealers only have a few on the lot. And no dealer I spoke to would budge one dollar from the Employee Price. Same for Cobalt and Malibu. They come in, they get sold.
The salesman told me GM trucks are starting to move again.
But what happens when Employee Pricing ends?
Limmin, the GM employee price takes the dealer markup to “0”. They are left only with the 3% hold back. If you are buying say a $15,000 econobox, the dealer gets $450.00 for the salesman, operations, floor plan interest and you name it. No, I guess that will be the bottom number. The real benefit to the dealer is it unloads his bloated lot until the 2009’s come and fill it up again.
@ Jerry –
There are still factory to dealer or customer cash incentives that are additive to further reduce the transaction price below the “Employee Program.” For example – a few months ago before this program was in place, you could have received massive incentives on a Tahoe. These incentives effectively put the transaction amount of the Tahoe many thousands below dealer invoice. So The dealer could sell the car way below invoice, but still pocket some $$$ if they did not pass the full amount of the incentive to the customer. And, they still keep the 3% holdback at the original invoice amount. I would imagine incentives are different today, but they did not go to zero.
Messing around with interest rates and lease rates (well, only with certain automakers) is another way to further juice the transaction, and the gravy-interest-rates often change quite substantially when these nationwide gimmick events get launched.
Anyway – anyone who straight up pays the dealer invoice in the new campaign gets hosed.
@ MattVA –
I’m not completely sure how Edmunds does their estimates… but I think one key component of their forecast error was an inability to estimate fleet sales. No automaker has to report a split out of their fleet registrations separate from retail sales. And systems that guesstimate sales as the month is still in progress do not have the ability to accurate include fleet. So no one can prognosticate industry-wide numbers if automakers change fleet mix (that is, reduces the fleet percentage as a part of their total sales). Many Domestics are taking this number down while companies like Nissan are taking theirs up.
“GM’s sharp losses show that even with once-popular ’employee pricing’ incentives, consumer demand for cars isn’t what it once was.”
Maybe that’s because “employee pricing” isn’t all that great. GM’s own price quotations show the $21,399 “employee price” on a base LaCrosse is 14% under sticker. A base Lucerne goes for 14.6% off MSRP. Those are slow-selling models that really needed help, but they’re still too costly to pull in more buyers. Sadly for Buick, which likes to says it’s a “premium American motorcar,” few people will pay more for a LaCrosse than the cost of an Accord or Camry.
In hindsight, it seems the LaCrosse should have been the new Century–and priced a couple grand less. You say it wouldn’t have made a profit at that price? Well, is it now?