Why, that news is so good that the Freep is happy to throw ChryCo the irony-free headline. April Fools! Sales are actually down 39 percent compared to March 2008. It’s just that Chrysler hasn’t topped 100k monthly sales since September. Does this look like a turnaround to anyone? Bueller? Jim Press? “The market is starting to show small signs of life which need to be nourished like seedlings.” What a touching image. Tiny seedlings struggling to life under a pile of government cash. Please, describe these plucky little plants for us, Mr. Press. “The fact that we exceeded 100,000 units for the first time since last fall is encouraging, and evidence that our improved quality, improved mileage as well as value represented in Employee Pricing Plus Plus are just what the doctor ordered for recession-wary customers who are reluctant to make long-term purchases. It’s too early to see a trend, but spring shows signs of hope.” If showing signs of hope is your job description, perhaps. But how did the federal proclamation (PDF) of “the poor quality of [Chrysler’s] existing product portfolio” affect the sales seedlings?
And once again, the big T (via PRNewswire) proves to not be invulnerable to the weak sales environment. Toyota division sales were down an even 36 percent, but Lexus swooned slightly more, shedding 40 percent of its sales compared to last March. Scion models dropped between 50 and 60 percent, while Corolla proved more resilient than Honda’s Civic, dropping only 7 percent. Similarly, RAV4 and Lexus RX were off only 4.5 percent and 17 percent respectively, compared to 40-75 percent drops for nearly every other Toyota truck and SUV. Sequoia was also a surprising “could be worse” example, with sales staying over 2k monthly sales, falling only 20 percent compared to last March. Still, with sales like this it comes as no surprise that Toyota is dropping its second-half dividend.
GM’s March sales (PDF chart) slid 45 percent compared to last March. As usual, the official press release is crawling with standard-issue PR equivocation. 156,380 deliveries in March? Why in a total contextual vaccuum, that sounds downright mediocre! Compared with February’s pity party, “7 of 8 GM brands saw total sales increases with total volume up 23 percent.” And Mark “Rough Chuckles” LaNeve hears a slow, government-backed turnaround coming. “We had a strong close at the end of the month as customers responded to strong incentives, President Obama’s positive statements about GM, and the government backing domestic warranties,” soliloquizes GM’s S&M masochist-in-chief.
Volkswagen’s March sales were down nearly 20 percent compared to last March, a smaller drop than many other OEMs faced last month in a tough US market. Wolfsburg’s new Passat CC had its best sales month ever at 2,351 sales, but only new models such as the CC, Tiguan, Routan and Jetta Sportwagon kept VW’s sales looking decent. Models which were on sale in March of last year are down dramatically, from the Rabbit (-60 percent) to the “new” Beetle (-60 percent) and from the Eos (-62 percent) to the Passat (-72.4 percent). The best-performing existing VW model was the Jetta sedan which lost only 27.4 percent of its sales. Otherwise, things were pretty much a bloodbath that is only barely being papered over by new-model sales.
Have Honda sales hit bottom? Their March sales press release sure wants you to think so. The 33.7 percent drop in sales last month “appears particularly steep when compared to last year’s strong first quarter,” admits Honda’s NA sales honcho, John Mendel. Compared to January’s 35.4 percent slide, though, March’s are a slim improvement, and maybe (just maybe) a tipping point in Honda’s sales results. Breakdowns reveal that, in general, the bigger the Honda the worse the sales decline. Ridgeline (-66 percent), Element (-70 percent), RL (-69 percent), RDX (-50 percent) and MDX (-47 percent) were the big losers, while only the new TSX increased its sales compared to last March, posting a 16 percent increase. The new Insight Hybrid suffered from limited availability in its first partial sales month, posting only 569 sales. Given the larger sales trends, however, there’s a good chance that the new cheapest hybrid in America will help boost Honda sales in its bread-and-butter small, efficient car sales.
April Fools’ Day is a dangerous proposition in this day and age. I mean, where does the media get off giving people the license to turn everything into a joke when just about everything is one giant joke anyway? Oh well. Post-post-post-irony’s gotta have its day in the sun too. And with that in mind, let’s set a course for the joke-or-not heart of darkness: The Detroit Free Press. The Freep is running wild with its license to giggle today, loudly proclaiming GM’s new CEO Fritz Henderson’s ability to, like, fix stuff. So is this good news for folks stuck with malfunctioning GM transmissions? Or does Fritz The Fixer just know a guy who knows a guy? No, apparently the big difference between Wagoner and Henderson is that “where Wagoner, 56, often spoke in sentence fragments that strung several thoughts together, Henderson’s answers are more direct, his speech more clipped.” Oh, yes, and “when GM defused a potentially explosive standoff between the UAW and parts-maker Delphi Corp. in 2007, union President Ron Gettelfinger singled out Henderson as the peacemaker.” So he’s a short talker that makes nice with the union. Sounds like a fixer (-upper) to us. Funny stuff, Freep.
GM Total Confidence will turn GM’s sales around! Hopefully we’ll never use it because our residuals are improving! Corvettes are great but we have to focus on fuel efficient vehicles! Yes Virginia, there is a Buick-Pontiac-GMC strategy! These are just a few of the ripping one-liners that make this April Fools interview with GM’s Mark LaNeve the funniest video on the internet. Newly-minted C&D editor Eddie Alterman plays a terrific straight man to LaNeve’s Jack Nicholson-meets-Baghdad Bob persona, asking those “just serious enough” questions with hilariously believable faux-interest. Great protection on the back end? Did someone just say bankruptcy? No? Good. Carry on, then.
Not everyone can weather an economic downturn with the grace of, say, a Ferrari. Even with Wall Street bonuses under fire from DC, The Scuderia’s North American boss tells Wall Street Journal that “our customer base is not mainly those people. Our people have serious money.” No, really. Giant, heaping piles of it. Which is nice for them, but we’re not all in that boat, ne’est-ce pas? For the “less insulated” portions of the economy struggling to make payments on our less “investment grade” vehicular assets, the new economy is here to make things more efficient. For the people to whom you owe money. The Journal explores the rise of vehicle disablers, small satelite-linked devices with which your loan holder can “turn off” your vehicle when you miss a payment. The logic goes that people miss fewer cell phone bills if they know they will instantly lose service. And if it comes to reposession, satellite tracking makes the job easier and less expensive. Some customers complain that the ever-present reminder of their indebtedness is unwelcome, but lenders and dealers are finding them harder to resist every day.
No, they’re not brushing off the old 1907 plans, so Zap’s Xebra won’t be the target competition. Financial Times reports that the reborn EV firm has moved on from its Zap Alias escapade (due, uh, now to quote RF) “to buddy up” with Malaysian OEM giant Proton. The cunning plan? Sell Protons with DE’s drivetrain, for cheap and cheerful “real car” EVs. “We believe in an affordable, practical, everyday electric car,” says Detroit Electric’s (it’s so hard to type that without scare quotes) Albert Lam. “It’s not a high-end vehicle we are targeting or a short-range city car.” The one wacky part of this otherwise seemingly sensible plan? They plan to sell them in the US.
Ousted GM CEO Rick Wagoner is being posthumously hoisted onto a cross by Michigan’s Governor Granholm and the Detroit News, which is running a piece today entitled “GM Workers Upset That Wagoner Became Sacrificial Lamb.” Huh? Better him than them, right? “Here we got past all the bad media, all that fury during congressional hearings, and now they want him to resign,” says UAW Local 599 (Flint) Chair, Terry Everman. “It’s really a setback, because you don’t know what new direction GM will take.” And it’s not just the uncertainty that has workers in a kerfuffle over the Wagoner pink slip. “It just didn’t seem appropriate for the administration, rather than the board, to dictate,” says OnStar Manager, Bryan Bateman. “I think Rick was a sacrificial lamb in all this. I think he took one for the company.” Except that Red Ink Rick should have been dumped years ago, and the irresponsible board members that kept him around have been canned by Obama as well. Oh, yeah, and GM turned its fate over to the feds the second it took public bailout money. But, hey, one man’s sacrificial lamb is another man’s tasty entrée. To (you guessed it) more government intervention on behalf of the General. Of course.
Chevy’s Volt “will likely be too expensive to be commercially successful in the short-term,” reveals the PTFOA in what amounted to stunning news for Volt boosters and no one else. Wasn’t the Volt supposed to justify the whole bailout in the first place? The DetN‘s Scott Burgess takes the “yeah, but” tack, spinning expensive impracticality into farsighted vision. With a little help from his friends, of course. “In hybrid technology, it’s hard to argue that we’re not behind,” GM’s Rob Peterson tells Burgess. “But we believe we have a better solution.” And what of that $40K price tag that the government says will require “substantial reductions in manufacturing cost in order to become commercially viable?” “It’s a transformational technology,” says Peterson. “That’s part of the reason the cost is so expensive. But we believe if you start in the right direction, as the supply base matures, the volumes of the vehicle increases and the costs will go down.” If. As. Will. As in “we hope.” Meanwhile, someone has to pick up the bill and worry about the viability of a firm that is staking everything on an unprofitable-at-$40K moon shot. Needless to say that someone ain’t Bob Lutz . . . .
Ford apparently isn’t the only firm that “speaks car.” The ChiTrib reports that a Pennsylvania parts dealer is suing Ford for using the line “we speak car” in recent ads, claiming it has used the phrase for six years. Frank’s Auto Supply of Uniontown, PA uses wespeakcar.com as its website, and has used the trite neologism in advertising since June of 2003. The parts dealer is suing Ford in federal court, seeking unspecified damages and a ban on Ford’s use of the phrase. The upside to ripping off another marketing tagline? No one really misses the unoriginal ad when it gets pulled.
Automakers are cutting second quarter production plans by double digit percentages, as the US auto market continues to contract. Automotive News [sub] cites CSM Global’s estimate that North American auto production will not top 2.07 million units, the lowest level since “at least” 1981. And though GM, Ford, Toyota, Nissan and Honda are expected to cut production in the 30-40 percent range, the worst news comes from Chrysler. The Cerburian dog is “selling the majority of their vehicles out of inventory,” says CSM’s Michael Robinet. “They are trying to get much more realistic about production levels.” How realistic? Expect a 60 percent cut in production for the second quarter, and under one million units of total North American production on the year, reckons CSM. That’s well below Chrysler’s 1.6m annual production plan from its original viability plan.
The U.S. government (ostensibly representing “the taxpayers”) is right to insist on conditions to the second round of federal loans to Chrysler and GM. As always, the devil is in the details. As always, the government has put politically motivated strings onto every moving appendage in this latest example of federal largess. The fundamental question here is not whether or not these strings– from a shotgun marriage between Chrysler and Fiat to a GM bondholder haircut– will rescue either company from liquidation. It’s whether or not the federal government should be involved in bailing out any company in any industry. Period. Though others may disagree, I believe that only companies absolutely essential for national defense/security might qualify for direct taxpayer support. Might. Otherwise, NFW.
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