In fact, sales for the Toyota brand itself (as distinct from Scion and Lexus) fell by 37.5 percent. Oh yeah? Well, Lexus’ December sales sank by a whopping 41.8 percent. There was only one– count it ONE vehicle– that experienced a sales increase. The Lexus LX, the gigantic badge-engineered Toyota Land Cruiser, increased sales from 132 to 508 monthly sales (something to do with gray market exports to the Gulf methinks). Everything else dropped like a proverbial stone thrown in a deep dark well, from the Corolla (-19.4 percent) to the Camry (-22.6 percent) to the Highlander (-47.1 percent) to the aforementioned Land Cruiser (-65 percent). The Scion xB redo is looking like a HUGE mistake, with sales off by 52.6 percent for the month, which is only slightly less bad than December sales of the Texas-built Tundra (-52.2 percent). One wonders what these numbers would look like without the Saved By Zero marketing campaign. Folks, in case you didn’t know it, it’s Hell out there.
Posts By: Robert Farago
Earlier today, we reported that rental fleet sales had fallen by 500k units in the last 12 months. Clever members of our Best and Brightest connected the dots, and wondered where that would leave the fleet queen herself, the New Chrysler Corporation. “Total sales were significantly affected by the industry’s largest reductions in fleet sales,” the official press release almost boasts. “63 percent for December and 31 percent for the year.” Yes, well, the retail end of the business wasn’t that much better; tanking by a full 53 percent. Needless to say Jim Press quickly sacrificed the last remaining shreds of his credibility to toe the company line and collect the company paycheck. ““Last year Chrysler and all of our stakeholders persevered through extraordinarily difficult economic conditions, made the necessary adjustments and always kept our focus on serving our customers,” said Jim Press, President and Vice Chairman, Chrysler LLC. “As a result, our Company and our dealer network start this year stronger and better positioned to succeed in today’s marketplace.” Let’s have a little look at where that might be…
December sales numbers are starting to trickle in. Audi’s 9.3% drop from December’s sales totals could well look like a major victory– after the big boys sign in. Well, at least that’s how Ingolstadt’s spinning it, declaring a major (if unspecified) gain in U.S. market share. One thing’s for sure: the fish-faced Q7 is floundering. Sales of the Porsche-platformed SUV (or is it the other way around?) dropped 23.4 percent from last year’s miserable totals, from1575 to 1207 units. The Q7 finishes the year down 36.2 percent. Although the TT’s annual totals are up by three percent, December inflicted a 62.8 percent ding. The only car kicking it: the A5, up 383.1 percent, and the R8, up 275 percent. But then we’re talking small numbers (657 and 115 respectively). Audi’s brand sibling VW is hurtin’ for certain. Although total sales “only” 3.3 percent for the year, December is looking REALLY scary, with sales dropping from 20,543 units to 17,577. There’s blood everywhere in the lineup…
Truth be told, there’s not a damn thing automakers can do to revive the U.S. auto market to 2007 levels. All they can do is ride out the economic shitstorm that was, in no small part, created by the lax lending standards in which they were active not to say maniacally enthusiastic participants (I’m looking at you GMAC). Who would have thought the fact that all automakers are suffering would provide the basis for an excuse for GM to extort $17.4b from Uncle Sugar? Ahem. Anyway, yes, Toyota’s going to take it in the shorts. One TTAC’s front line contacts runs a store in the DC area for the Japanese brand [NB: not the one shown], and checks in on your behalf. “We sold 428 vehicles for December. 148 Used, 380 New Toyota. We sold 625 new and used vehicles last year in Dec. Prius is selling at or below invoice, Camry Hybrid below invoice, Highlander Hybrid below invoice. Just thought you’d like to know.” Uh-oh. I make that a 32 percent drop.
Right. Let’s have it. I’m going to ask a simple question, and I’m honest-to-God ready, willing and able to hear some new information. What concessions has the United Auto Workers (UAW) ever made to the American automakers? Forget the much-ballyhooed “two tier” wage system. All that means is that new hires don’t get paid as much as the old hires. As there are no new hires, and the theoretical new hires aren’t “conceding” anything they already had, and I’ll bet the UAW’s not cutting their union dues to compensate for the reduced wage structure, I reckon that simply doesn’t qualify. Layoff? Layoffs aren’t concessions– especially when UAW members are paid 85 percent of their salary for not working. Buyouts? Not a concession. The only genuine concession I can think of: the new-for-’07 health co-pay, which stands at $252 in annual premiums for family coverage and another $500 in total annual deductibles. AND there’s a company (not union) fund to cover workers who can’t afford it. The idea that the UAW will concede anything without compensation raises all the usual questions about leopards and spots. But if you’d like to see how the game is played, make the jump for the Detroit News’ properganda [sic].
Automotive News [sub] reports that car rental companies have dialled back their orders by 500k new vehicles. In ’07, they hoovered-up 1.9 million cars, trucks, minivans and vans for their customer’s delight. Last year, that number contracted violently, to 1.5m units. According to Robert Barton, president of the American Car Rental Association, it’s one damn thing after another. “Many rental companies can’t borrow money to finance the inventories they would like, Barton says. At the same time, he says, many franchised dealers cannot get financing to buy thousands of retired rental vehicles at auctions. As wholesale used-vehicle prices and demand fall, Barton says, rental companies are denied another source of money to buy new vehicles. That’s bad news for automakers, especially the Detroit 3, that traditionally have relied on rental companies to soak up their excess inventory.” Ya think? And what’s the bet bailout boys’ bulk biz will be even worse in ’09? Make the jump to count the cost.
I get it! Instead of putting the hate on owners of import-branded cars (as opposed to say imported Fords), supporters of the Big 2.8 could offer special membership benefits to those consumers who chose to support Chrysler, Ford and GM by buying their products (as opposed to say paying their taxes). We’ll have to see how this plays out in Farmington Hills, Michigan, where the owner of The Tribute restaurant is holding the antithesis of hot import nights. You can read the full offer to American-branded car owners (the cars, not the owners) after the jump. Meanwhile, rest assured this is no redneck truck stop. “Each night, executive Chef Rich Travis oversees the creation of eye-opening flavor combinations, pushing the boundaries of innovative cuisine to enthrall diners. His exquisitely detailed food, distinguished by diversity, inventiveness and spectacular presentation, are perfectly complimented by Tribute’s award-winning wine list.” Personally, I recommend the Grilled Honey Chamomile Glazed Duck Breast Duck Confit and Morel Wonton, Parsnip, Carrot, Wild Rice, Chamomile-Citron Gastrique. But then I’ve never eaten there. And I drive a Honda minivan, which, although it’s ranked number seven on cars.com’s American-made index, doesn’t qualify me for a 50 percent discount. Although… “In addition, during the week of Jan. 25-31, Tribute will recognize all American car-markers and offer a 50 percent discount on food purchases to anyone who drives an American made vehicle, including American automotive suppliers and dealers.”
I’m not sure why The Wall Street Journal thinks Germany is the next Japan in the U.S. new car market. For one thing, the market itself is lying in the gutter, naked, hungover and bleeding. In this environment, cutting capacity, protecting market share and not losing too much money (a.k.a. eliminating all but essential expenditure) is the only sensible plan. In fact, this article– “Europeans Raise Pressure on Detroit”– would be better entitled “Detroit’s Dead, VW’s Arrogant, BMW’s Hopeful and The Japanese are Hunkering Down.” Scribe Kate Linbaugh is content to take VW’s pre-crash, snicker-worthy “1m Vehicles or Bust” proclamation at face value, and extrapolate from there. “VW is investing in its first U.S. factory in two decades and expects to triple U.S. sales to one million vehicles by 2018. BMW is introducing a new small car and expanding its distribution network.” Never mind those previous, abortive efforts to make the U.S. Germany’s Land of Plenty (excluding Bimmer’s two-mode hybrid SUVs or VW’s Phaeton). “This time, European car makers insist more diverse product lines, healthy marketing budgets and access to nonunion labor can overcome past stumbles. VW is developing specifically for the U.S. several new models, including a family sedan. [VW Routan shown, irony be damned.] A new American manufacturing operation will free it from the currency swings that have hampered its U.S. sales in the past.” Do I detect a thinly-veiled attempt to say Japan and now maybe even Germany have a better U.S. business model than Detroit; a theory made on the cusp of December’s disastrous sales numbers to create maximum embarrassment for Motown? Well duh.
Warren Brown is nothing if not ambitious in his defense of the indefensible (i.e. GM CEO Rick Wagoner). Rather than just raise a[nother] cheer for the man who’s spent the last decade-plus jamming the yoke forward on General Motors’ inexorable descent into bankruptcy, the Washington Post carmudgeon decided to rewrite the entire history of the Japanese “invasion” of the American automotive market. But before he does that, Warren upbraids those who’ve called for Toyota Prez Katsuaki Watanabe to resign, suggesting that Watanabe and Wagoner are birds of a feather, getting flocked together. “GM, as we all know, has lost substantially more than $1.7 billion. In fact, it has lost $72.3 billion since 2004 under Wagoner’s reign. By that measurement, applying Fire the Coach rules, Wagoner is 40 times more deserving of dismissal than Watanabe. But here’s arguing that all of that is sloppy logic and in many ways inherently unfair. Here’s also suggesting that Fire the Coach management will solve nothing — or remedy very little — in an arena where game policy is athwart common sense, as it is and has been in a United States absent effective industrial and energy policies.” Same old you-know-what, different wrapper. Brown is once again, blaming everyone BUT Wagoner for GM’s chronic, shameful self-destruction.
Coming of age in the 70’s (lucky me), Cadillac represented everything I didn’t like about American cars. Like its lesser-priced sibs, it was an anti-sports car. With the possible exception of Lincoln’s Continental Mark My Words This Car is as Good as a Cadillac, a Caddy was THE anti-sports car. The idea of hustling one of those land yachts around a corner was laughable. And for me, it was all about the handling. (Driving a Dino had changed my life.) I remained contemptuous of America’s love affair for Caddy’s “sofas on wheels” right until the moment I met a girl in Aspen who drove a meticulously maintained 1962 Cadillac convertible like the one shown. Suddenly, all the curves I needed were inside the car. You know that song Slow Hand by the Pointer Sisters? It was on the Caddy’s radio during one especially memorable drive. I got it. And Caddy, I reckon, has lost it.
From Auto Letters by Jim Mateja in the Chicago Tribune: Q I purchased a new 2009 Chrysler 300 SRT8 a few weeks ago from dealer stock. The rear license plate was on, but the front wasn’t. The plate bracket was in the trunk, but I was told that nobody was available to install the front plate. I was told not to worry because I wouldn’t get pulled over and it looks better without the plate. If I wanted, I could bring the car back to get the plate installed. When I got home, I looked at the bracket to see whether I could install it and found that Chrysler changed the grille on the 2009 300 SRT8. The directions show the bracket is made to attach to the old grille. The parts department said the bracket is the correct one for my vehicle. I took the car back to dealer, and they agreed it couldn’t be installed, but there was nothing they could do. They said I should display the license plate on my dashboard. How can Chrysler produce a car that doesn’t and can’t conform to the state law, which requires a front plate? A How could a dealer tell you not to worry and that you wouldn’t get stopped for driving without a front plate that’s required by law in Illinois? And how could a dealer tell you to display the plate on your dash when all it takes to attach the bracket is cutting it to fit the mesh grille that replaced the egg-crate grille for 2009? ‘It just takes a little initiative by the dealer,’ Al Wagener, a salesman at Knauz Chrysler in Lake Bluff, told us when we called to ask how Chrysler could have goofed.”
GM’s scaling back its presence at this year’s don’t call it the Detroit Auto Show. Reports suggest a 32 percent reduction in shrimp size during press days and swag bags filled with actual brochures. You know austerity is the profligacy when Cadillac– GM’s top brand– decides to e-unveil their all-new SRX ahead of its Motown debut. Be that as it is, the formerly narrow-hipped Caddy will come in two flavors: a 3.0-liter direct injection V6 (260hp and 221 ft.-lbs. of torque) and a 2.8-liter turbocharged six (300 horsepower and 295 ft.-lbs. torque) Caddy promises that both aluminum-engined models will achieve fuel economy “in the 20s”– which is a bit like saying nothing much at all, really (low, mid or high; highway, combined?). The SRX faces stiff competition from existing players: the Lexus RX, BMW X3, Acura MDX and consumers’ existing vehicles (thanks to a moribund market for new cars). With optional 20″ wheels, LED brand boasting kick panels and the now signature cow-catcher prow, Cadillac seems to be hoping SRX’ image will move from invisible and soccer-Mom-station-wagon-on-stilts to Escalade-lite. (Low taste, less filling.) Can the SRX command a premium, or will it be another Art and Science of the deal job? They’ll announce the all-important price just as soon as the first tranche of bailout money– sorry, press coverage is spent.
The basic idea behind Hyundai’s new Assurance scheme: if you can’t afford the payments on your new Hyundai-financed Hyundai within the first year of financial servitude, just drop it off and walk away. No debt. No ding to your credit rating. No charge. The devilish details might not keep the Charmed Ones busy, but they’re worth a closer look. For example, you can only boomerang your Hyundai if you’ve experienced “involuntary unemployment, physical disability, loss of driver’s license due to physical impairment, international employment transfer, self-employed personal bankruptcy, accidental death.” One wonders about the importance of credit ratings to someone who’s just shuffled off this mortal coil, but that’s just quibbling. And, of course, there’s a few Hyundai-shaped hoops you have to jump through even if you are dead.
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