À l’impossible nul n’est tenu. The “impossible” that ain’t likely to happen: domestic car makers recapturing the lion’s share of the American new car market. According to Credit Suisse, when the sales figures for June drop, New Chrysler, current Ford and Old GM combined are likely to account for around 45 percent of new car sales in the Land of the Free. Fans of the forthcoming Fiat 500, new Ford Fiesta and Chevrolet Spark note: CS reckons it would be worse if the overall percentage of truck sales (vs. car sales) didn’t increase from 44 to 47 percent. Put that in your EPA and smoke it. Bullet points after the jump.
• We expect the annualized light vehicle selling rate (SAAR) to run in a range of 10.0 – 10.3 million units in June, down from the year-ago month’s pace of 13.7 million, but up modestly versus last month’s pace of 9.9 million.
• We expect unit volume (selling day adjusted) to be down in a range of 27% – 29% versus June 2008. That compares to a year-to-date sales decline of 36% through May. The smaller decline is a result of comparisons that are getting easier, and sales that are actually getting a little better.
• June is another month filled with potential wildcards that could impact light vehicle sales for the month, including liquidation sales at Chrysler dealers, potentially delayed purchases as people await “Cash for Clunkers” legislation, disruptions in fleet deliveries due to extensive plant downtime, and GM’s bankruptcy filing in early June.
• We look for sales at GM to be down in a range of 30% – 32% in June, with market share landing at around 20.5%, which is down about 150 basis points from the year-ago month, and down modestly from about 21% in May.
• At Ford, we expect sales to be down in a range of 14% – 16%, with market share landing at about 16.5%. That share level would be down modestly from 16.8% share in May 2009, but up from 14% in the year-ago month.
• We see Chrysler sales down in a range of 38% – 40%, with market share at about 8.5%. That share level is about even versus May 2009, but is down from about 10% in June 2008.
• We look for sales of foreign brand vehicles to be down in a range of 27% – 29%, with market share landing at about 54.5%. That’s up modestly from 54.2% share in the year-ago month. The gains would be greater for the foreign brands, were it not for our truck mix forecast of 47% this year, versus 44.4% in the year-ago month.
• We expect Detroit 3 inventory to end June about 16% understocked. Specifically, we see GM dealer stocks ending the month about 6% understocked, Ford inventory ending June about 20% understocked, and Chrysler ending the month about 29% understocked.
• GM may print a third quarter production schedule in conjunction with its June sales release. We include an analysis in this report that suggests GM should build down about 60% – 70% on the car side in Q3 (versus like-2008), and down about 10% on the truck side.
How can Chrysler be 29% understocked when they were stuffing dealers with first quarter production and sales have been down 40% ? Did the two month factory shutdown (so far) eliminate the channel stuffing already?
There is no way in hell that Chrysler is “29% understocked”. Just about every Chrysler dealer I hear about is stuffed to the gills with unsold vehicles – some even 2007 or 2008 models.
Really weird is that 20+% still buy GM products. Must be the rebates. First, you never know with a bankrupt company, second they constantly try to run away from old liabilities. who knows, tomorrow they run away from warranties.
Also weird that truck sales are so high. I do understand that some people need a truck. But for most people it is just an expensive (if not fancy) fashion item to be the city cowboy. But do people nowadays have so much money or have such a secure job? Will the domestics instantly bankrupt if gas goes to $4? Ironically the bad economy with low gas prices helps them. Really, if gas was $4, what would their sales be? 0?
And didn’t they have 300+ days supply, and now after 60 days of slow sales that should have disappeared? How come they still have 2008 vehicles on the lots? those must be 9 months old. Or do they only count current models as supply????
While some truck sales are definately the urban cowboy type, a lot of people in this country still live in areas that are far from urban. We still sell a lot of trucks to people who need them to tow boats, utility trailers, farm equipment, or need them for construction.
While we are selling a good number of work trim and mid-level trim vehicles, what has surprised me is how many people are buying fully loaded $40K + Lariat, King Ranch and Platinum trim trucks.
Also interesting to know would be what Credit Suisse considers to be ‘trucks’. For a lot of these types of analysis truck means anything that isn’t a coupe or sedan, so you have crossovers, which are a huge market segment right now, getting thrown into that mix.
I always find it amusing that some folks are so quick to hammer people who buy trucks.
According to to US Government , the cost to drive an F-150 4WD app. 15000 miles is about $100/year more than it would cost to drive the same amount in a G35x.
I do not see anybody criticizing the Infiniti buyers.
http://www.fueleconomy.gov/
But for most people it is just an expensive (if not fancy) fashion item to be the city cowboy.
A pickup can also be basic transportation. A new, basic regular- or extended-cab truck can be had for under $20,000…and for a while this winter, I could get a pretty nicely equipped Silverado extended cab (V6, auto, power windows/locks) in the high $15s. If you have a short commute it’s a tempting deal, especially if you’re over 6 feet tall. And even better, a new pickup will usually hold its value better than a new car of the same price.
I live out here in the sticks of North Carolina and I need a truck once or twice a week. And I’d prefer to drive a nice handling small car. I have to carry trash to the recycle center, pull a boat or trailer, and I’m always getting nailed at work to help somebody haul something somewhere.
Dumb question here: I remember changing shocks on my old 1980 Chevy truck years ago. I can just just unbolt the old ones and pop the new ones on, right? (I have an ’06 Dakota now.) Don’t have to block it up or nothing? Pull the rod out of the cylinder once, push it back in and then bolt ’em? Geez, I feel dumb asking this but I’d like to do it myself, and save a few bucks. Any advice appreciated.
@ Kaleun
Will the domestics instantly bankrupt if gas goes to $4? Ironically the bad economy with low gas prices helps them. Really, if gas was $4, what would their sales be? 0?
That is a fantastic observation and question.
If GM/Chrysler/Ford are “relying” on the continuing absurdity that is the Truck/SUV market then they’re history already.
@ Jimmy2x
Nice fudge work comparing the 2009 F-150 6spd with the 2008 G35x.
If you compare a 2008 F-150 with the 2008 G35x you get $514/year.
If you compare the 2009 G37x with the 2009 F-150 you get $293/year.
With CAFE looming on the horizon I can understand the uptick in truck sales. Trucks are about to get (a) Smaller and weaker, or (b) rare and extremely expenisve. Demand is going to remain the same (if you really believe the truck buying crowd wants their trucks smaller and weaker you’re a fool), but supply is going to dwindle. In light of that, purchasing a large powerful vehicle wouldn’t be a bad investment as depreciation would be minimal. There’d even be the possibility of appreciation. (Think vintage muscle cars.)
is there some reason why diesel trucks have not taken off in the US?
say 3.0 litre turbo diesel would do well in a 4,500 lb truck with < 28 mpg city cycle
@ TonyJZX
It’s because the vast majority of them are not used to do “work”, but are, as I think as John Williams said here;
“…. surrogates for the muscle car era ….”
I’d say the lack of diesel pickup sales is due to the lack of diesel pickups on the market. Currently you have to step up to the heavy duty line of pickups to get a diesel, and the engines offered are all large displacement V8s. They offer impressive numbers and capability, but come with a larger than life price as well, plus, since they are optimized for power more than efficiency, they don’t give any real fuel economy gains unless you regularly tow heavy loads.
I see Mahindra’s upcoming compact diesel pickup being a big hit.
@PeteMoran
You are correct – but I was not trying to fudge anything and think I was looking at the Silverado. In any case for the 2009 models I don’t think that the $300 differential for gas pricing per year is going to deter people who need or just like trucks.
A few salient points here.
1) Ford, if it can survive on it’s dwindling amount of cash reserves, may be headed for a perfect confluence of better product reliability and quality in comparison to GM and Chryco, a precipitous drop in sales at the other Detroit manufacturers, a rebound in the moribund economy and the perception of not having participated at the bailout buffet. My guess is that Ford has to make it to Q2 or Q3 in 2010, and it’s possible we could see Ford having more market share than GM, for the first time in 70 years.
2) I drive a pick-up. I live in suburbia and really could get by without it, but it’s reasonably good on gas (4.3 V6 with a 4 spd O/D auto tranny) and it costs 45% less per year to insure compared to my Voyager. Because I drive less than 5,000 miles a year, my cost of ownership is less than that of my wife’s car, or the Voyager. And I’m not some cowboy poseur as the truck is used by myself, my brother-in-law or my father-in-law virtually every weekend for it’s intended purpose. I’ve picked up 5 yards of soil and 27 pieces of sod, we’ve picked up 2 yards of gravel, an entire shed, the total makings for a backyard fence, several dozen patio stones; I could drone on and on for paragraphs about how my truck gets used, but you get the point by now. It’s got over 140,000 miles on the odo, and as long as I maintain it, should be good for another 100,000 or so. Over the next 10 to 15 years, as long as it’s maintained and serviced, my ownership cost should dwindle. Why would I buy a car? The truck suits the needs for why I bought it. Not everybody who buys a truck actually needs it, but it’s sure nice to have.
The reason diesel sales did not take off, is that the US had constantly changing emissions rules for diesels. Unfortunately, GM has indefinitely postponed their latest Duramax diesel 72 degree V8. This diesel was designed to fit in the same space as the Chevy small block. Ford canceled their latest diesel, Toyota canceled theirs, Dodge postponed introduction of the latest Cummins diesel.
So- If GM had any sense, they would cancel the Volt, and use the cash to bring the Duramax to market. Of course, GM is brain dead at this time. Everyone was saying the latest GM diesel was as quiet as a gasoline engine, and met the 2010 emissions.
To some degree I still believe that – some 30 years later – one reason for a lack light-duty diesel trucks from GM stems from their less-than-stellar experiece with these beasts.
It may be that customers may not remember the Olds diesel debacle, but there is/was probably still some resistance among GM management, lest they repeat the mistakes of their predecessors. Sad, really, because instead of learning from mistakes and improving the core idea, the preference is instead to take the safe, less innovative route.