And now, the hangover: July brings disappointing sales numbers for GM and Ford after June had surprised. GM is down 6 percent in July. Ford is down 4 percent. Even Chrysler Group reports down to earth results with July up only 13 percent after a truly ballistic series of months. In June, Edmunds Senior Analyst Jessica Caldwell politely voiced suspicions that the beautiful June numbers were the product of cosmetics:
“There was great pressure from automakers to close June strong, especially after the unexpectedly weak Memorial Day holiday weekend in May. It is the end of a quarter so undoubtedly they wanted to finish big.”
The problem with these operations is that the next month, there will be headaches. And the headaches are now. The foreigners, Subaru, Nissan, Toyota, Volkswagen all report solid double digit sales. Analysts did not predict stellar results for GM and Ford, but both came in much lower than analysts predicted. This does not bode well for the stock prices.
At the end of the day, the market rose 9 percent. Ford and GM lost market share. The seasonally adjusted annualized sales rate stands at 14.1 million, as expected by forecasters.
| Automaker | July 2012 | July 2011 | Pct. chng. | 7 month 2012 |
7 month 2011 |
Pct. chng. |
|---|---|---|---|---|---|---|
| BMW division | 21,297 | 21,409 | –1% | 147,801 | 135,114 | 9% |
| Mini | 5,855 | 4,711 | 24% | 37,914 | 34,527 | 10% |
| Rolls-Royce | 32 | 30 | 7% | 224 | 210 | 7% |
| BMW Group | 27,184 | 26,150 | 4% | 185,939 | 169,851 | 10% |
| Chrysler Division | 20,792 | 15,427 | 35% | 188,546 | 111,495 | 69% |
| Dodge | 35,630 | 33,653 | 6% | 297,208 | 263,551 | 13% |
| Dodge/Ram | 60,028 | 54,870 | 9% | 464,089 | 404,866 | 15% |
| Fiat | 3,710 | 3,038 | 22% | 24,416 | 7,982 | 206% |
| Jeep | 41,559 | 38,691 | 7% | 283,106 | 227,615 | 24% |
| Ram | 24,398 | 21,217 | 15% | 166,881 | 141,315 | 18% |
| Chrysler Group | 126,089 | 112,026 | 13% | 960,157 | 751,958 | 28% |
| Maybach | 4 | 3 | 33% | 28 | 21 | 33% |
| Mercedes-Benz | 21,514 | 20,737 | 4% | 159,391 | 138,751 | 15% |
| Smart USA | 780 | 327 | 139% | 5,528 | 2,883 | 92% |
| Daimler AG | 22,298 | 21,067 | 6% | 164,947 | 141,655 | 16% |
| Ford division | 166,507 | 172,501 | –4% | 1,264,928 | 1,199,986 | 5% |
| Lincoln | 6,975 | 7,814 | –11% | 48,937 | 49,817 | –2% |
| Mercury | – | – | –% | – | 248 | –100% |
| Ford Motor Co. | 173,482 | 180,315 | –4% | 1,313,865 | 1,250,051 | 5% |
| Buick | 14,391 | 16,873 | –15% | 104,589 | 110,472 | –5% |
| Cadillac | 13,417 | 11,119 | 21% | 76,229 | 87,241 | –13% |
| Chevrolet | 138,942 | 149,005 | –7% | 1,100,604 | 1,053,543 | 5% |
| GMC | 34,487 | 37,918 | –9% | 235,528 | 225,269 | 5% |
| General Motors | 201,237 | 214,915 | –6% | 1,516,950 | 1,476,525 | 3% |
| Acura | 12,825 | 9,402 | 36% | 85,761 | 70,082 | 22% |
| Honda Division | 104,119 | 71,100 | 46% | 732,165 | 617,862 | 19% |
| Honda (American) | 116,944 | 80,502 | 45% | 817,926 | 687,944 | 19% |
| Hyundai division | 62,021 | 59,561 | 4% | 418,690 | 382,358 | 10% |
| Kia | 48,074 | 45,504 | 6% | 336,781 | 290,607 | 16% |
| Hyundai Group | 110,095 | 105,065 | 5% | 755,471 | 672,965 | 12% |
| Jaguar | 1,011 | 984 | 3% | 7,517 | 7,394 | 2% |
| Land Rover | 3,320 | 2,811 | 18% | 24,311 | 20,103 | 21% |
| Jaguar Land Rover | 4,331 | 3,795 | 14% | 31,828 | 27,497 | 16% |
| Maserati | 208 | 199 | 5% | 1,496 | 1,296 | 15% |
| Mazda | 19,318 | 20,783 | –7% | 163,115 | 143,162 | 14% |
| Mitsubishi | 4,194 | 7,972 | –47% | 37,067 | 52,087 | –29% |
| Infiniti | 11,619 | 7,410 | 57% | 65,996 | 54,678 | 21% |
| Nissan Division | 86,722 | 77,191 | 12% | 610,066 | 534,896 | 14% |
| Nissan | 98,341 | 84,601 | 16% | 676,062 | 589,574 | 15% |
| Porsche | 2,803 | 2,768 | 1% | 19,253 | 18,310 | 5% |
| Saab Cars North America | – | 384 | –100% | – | 3,855 | –100% |
| Subaru | 25,183 | 21,730 | 16% | 189,487 | 153,779 | 23% |
| Suzuki | 2,266 | 2,447 | –7% | 15,260 | 15,849 | –4% |
| Lexus | 18,235 | 14,539 | 25% | 126,367 | 102,549 | 23% |
| Scion | 6,904 | 3,449 | 97% | 42,025 | 30,120 | 40% |
| Toyota division | 139,759 | 112,764 | 24% | 1,042,602 | 810,921 | 29% |
| Toyota/Scion | 146,663 | 116,263 | 26% | 1,084,627 | 841,041 | 29% |
| Toyota | 164,898 | 130,802 | 26% | 1,210,994 | 943,590 | 28% |
| Audi | 11,707 | 9,146 | 28% | 76,865 | 65,055 | 18% |
| Bentley | 172 | 142 | 21% | 1,249 | 985 | 27% |
| VW division | 37,014 | 29,066 | 27% | 245,739 | 183,191 | 34% |
| Volkswagen | 48,893 | 38,354 | 28% | 323,853 | 249,231 | 30% |
| Volvo Cars NA | 5,717 | 5,595 | 2% | 40,333 | 41,898 | –4% |
| Other |
278 | 256 | 9% | 1,946 | 1,789 | 9% |
| TOTAL | 1,153,759 | 1,059,726 | 9% | 8,425,949 | 7,392,866 | 14% |
Table courtesy Automotive News [sub]
OK OK not all at once now..On your mark,..Set GOOOO…
GM is really down 7%(6.53^) because Saab sales were counted in their total last year.
I realize that some, or a few, or maybe a couple of individuals, including Pch101 on TTAC (not an insult, but an observation), have declared anyone or any entity that suggests or states that the demand for new vehicles is far more lackluster than what the sales numbers are showing across the board, and that a significant chunk of ‘sales’ are:
a) Driven by channel stuffing, especially by particular large automakers such as General Motors (whereby dealers are forced to take mandated allocations of vehicles far higher than they ordinarily would, if they were allowed to stock vehicles in accordance with true demand and market conditions,
b) Driven by massive incentives, especially (but not exclusively) on leases,
c) Driven by a significant relaxation is necessary credit scores necessary to qualify for the purchase of a new vehicle (subprime financing is back, whether subsidized by government or the result of heavy application of pressure on banks or not),
-and-
d) To the degree end sales occurred, the result of large scale fleet sales as easy government printing allowed governmental entities and those who do business with them to refresh their vehicle contingents with ‘fresh’ product.
If any or all of the above are truly contributing factors to the stronger sales reported lately, one would expect to see a surge in vehicle securitized loans defaulting over the next2 to 5 years, a significant downturn in sales soon (even gaming the numbers through the methods outlined above is unsustainable over the long or intermediately long time horizon), and a whole lot of other ‘payback’ as a result of governmental and central bank interference with the natural clearing function of markets based on true price/demand and demand/supply curves.
I realize that at least one person may, based on past episodes, accuse me of “wishing for economic armageddon” because I’ve written this, but in reality, I wish for only for a real, sustainable recovery in automotive sales and the economy at large, which I think is impossible until government and central banks quit radically tampering and interfering with the natural flow of markets (pumping heroin into a junky’s veins may temporarily sto their withdrawal symptoms, but it only complicates, delays and even sometimes makes impossible their recovery).
By the way, I post this on a day when a data release (PMI) shows that U.S. manufacturing has hit a 3 year low, which is pretty amazing when one considers that three years ago was August of 2009, which was an incredibly weak period that was near the height of the contraction in the Great U.S. Recession.
a. Channel stuffing does NOT influence these #’s as these are sales to customers/companies…not units shipped to dealers.
b. Agree. Some auto companies are much heavier into leasing than others.
c. this answers a lot of your questions on the state of auto loans:
http://www.experian.com/assets/automotive/white-papers/2012-q1-state-of-automotive-financing.pdf
d. would really love to see Chrysler list out fleet sales the way GM does each month. It also would be nice to see TTAC (or someone) do a good investigation on fleet #’s breaking them down by government/Daily Rental/Commercial sales. Maybe that info is out there but I haven’t seen it.
Sunridge, thanks for that link (added to my bookmarks, reserved for truly useful data).
One of the things I found fascinating is the very significant upswing in the % of auto sales (NEW and used) generated by deep subprime borrowers, which now stand at nearly a quarter of all motor vehicle sales.
I find this number extraordinary for a number of reasons.
I do wish they broke down those subprime segments by lenders..that would be interesting.
Seeing VW Credit and Hyundai Credit at 53% lease mix….Honda Finance at 43% lease was a bit revealing too. That certainly doesn’t mean that those brands have those % mixes overall. When you start looking at the incentive $ VW and Honda are spending…it definitely starts to tell a picture.
As near as I can tell, people taking delivery of Hyundais are either:
A. leasing it with good credit
or
B. Financing subprime
30% of Hyundai/Kia’s portfolio is subprime and 53% of their portfolio is leasing.
I wouldn’t ring too many alarms on the subprime…PCH said it best… as long as those segments are properly scored (and appropriate high APR to offset the default rate) then there is nothing wrong.
I doubt the car loan business is giving away stupidly low APR’s to risky candidates like the mortgage business was prior to the bust.
Ford gained 2% retail, but a slowdown in fleet purchases led to an overall drop.
Odd how Caddy had a great July but a lousy year. Too early for a bump from the ATS isn’t it?
I drove by the local Cadillac dealer this past weekend, and it didn’t have an ATS on the lot. I would imagine that the car is just being shipped to most dealers now.
XTS?
ATS hasn’t started shipping to dealers yet.
2012/2011
CTS:4,743/4,449
DTS:20/715
Escalade:1,123/914
Escalade ESV:711/605
Escalade EXT:163/171
SRX:4,911/4,133
STS:7/132
XTS:1,739/0
Cadillac Totals:13,417/11,119
11,995 of the 13,417 Cadillac sales were retail. So, 11% fleet for Cadillac.
Thanks. So DTS-to-XTS accounts for half the bump but even without that Cadillac would be up. Almost every model is improved …
Its really not that simple…Cadillac was actually down vs June 2012. The drive by analysis that occurs when taking a quick look at sales is often wrong.
A fully ramped XTS (especially when livery fleet sales kick in) along with a fully ramped ATS will tell more of the story for Cadillac. That probably won’t be until 4th quarter at the earliest. Then comes the new 2014 CTS a year from now.
Cadillac far from recovered and the story isn’t written. But, if they can fight their way to 18,000-20,000 monthly (profitable) units moved (note I didn’t say sales) , then they can start to feel better.
If they can’t succesfully lease the ATS they might as well not try. That segment is 60%+ lease between BMW and Mercedes and Cadillac is much lower today with lease penetration.
What’s the deal with Dodge/Ram, Dodge and Ram? Isn’t Ram a brand of it’s own now? The sum’s get pretty strange/unclear for the Chrysler group as the sales are presented now.
“Dodge” always seems to be in the “Ram” fine print somewhere.
The radio station where I work is participating in a “Ram Jam” invitation-only Country Music concert in Nashville at the end of the year. All the associated internal paperwork refers to “Dodge/Ram”.
Separating the two has to be one of the most senseless marketing decisions in the history of marketing decisions.
I still don’t understand this. To everyone, a Ram is still a Dodge. It doesn’t strengthen the Ram name, nor did the Ram weaken Dodge. Was there any kind of a point?
Wasn’t last June artifcially inflated for Ford and GM because of shortages of Japanese models?
Yes and No.
When you take out fleet, GM took their hit this month in trucks.
Compared to July of 2011, retail passenger car sales were up 3 percent, retail crossover sales were up 2 percent and retail truck sales were down 12 percent.
channel stuffing and fleet sales aside, every “group” except 5 is positive for the 7 month totals year over year. excepted are daimler which is always late to report but likely positive, suzuki where the death watch continues, saab which is dead, mitsubishi, and volvo.
gm and ford posted positive ‘sales’ growth for the first 7 months, albeit not at the same pace as the other manufacturers.
volvo, cadillac and lincoln should be worried, they are the only luxury brand that saw negative growth year over year and it is during a period where the greatest gains were made by luxury brands.
Does anyone care about Lincoln these days?
I test drove an MKZ that had came in off a lease. Cold air on my bum on a sweltering day was nice. A decent price for a decent used car, my how the mighty have fallen.
Ford and GM are doing fairly badly(exception: China and that applies to everyone else as well)outside NA.
Interesting how well VW is doing. It is outpacing Toyota on both a month to month comparison and the YTD as well as Honda on the YTD. Those companies are bouncing back from a poor 2011 whereas VW is not. Which makes it more impressive. Now all they need to do is get a competitive compact SUV and they will continue (the Tiguan doesn`t cut it).
When you start to compete for real in new segments, these sorts of things happen.
YTD thru July VW is up 62,548 units
YTD thru July Passat is up 62,725 units
Jetta is actually down YTD…new Beetle helped a bit. Its not as big a miracle as it seems when you look at the details. Not knocking VW, but looking at the whole picture usually tells the whole story.
Is there a way to get retail sales per model per month? That is the core of what automakers sell their cars for (fleet is only for economies of scale or to move inventory that the retail channel won’t take). Retail sales champs are the true profitable vehicles – not total sales. Often if you take these into account you’ll see that the #1 seller in a category does not make as much money as the #2 and on seller which has better retail sales / higher profit.
I’ve never seen it all in one place…you see pieces of information from time to time. Some of it at the brand level….others of it at the vehicle level.
My ideal chart would have:
*Total Sales
*Average Transaction Price (which I believe covers only retail transactions)
*Average Incentive for Retail
*Fleet mix (broken down between Daily Rental/Government/Commercial)
*Lease/Purchase mix
It would tell the whole story. Volume isn’t everything. But, when you can mix good volume, high transaction price, low incentives (especially in the ratio of incentives to transaction price) and low fleet mix….its a winner across the board.
Coming to understand that “double digits” means double-digit percentage growth… always?