If this is a dead cat bounce, then it is a dead cat on steroids: German new car registrations jumped an unbelievable 40 percent in March. This according to data released by the Verband der Internationalen Kraftfahrzeughersteller (VDIK). Taking the Easter holidays in to account, which were in March in 2008, the gain still is a very impressive 20 percent, Automobilwoche [sub] writes. In the same month, sales in the USA continued to crater. The German sales blitzkrieg comes on the heels of a 22 percent jump in February.
The main reason for the incredible increase is the cash-4-clunkers Abwrackprämie. Buyers of a new car receive €2.5K if they retire their old one. Sellers of small cars profited most. French and Italian cars dominate this segment. In Germany, volume manufacturers Volkswagen, Ford, and even Opel profited. Even makers of luxury wheels see some improvement: Porsche reports an increase of 15 percent. Even BMW sees “first signs of an improvement.”
I’m down with Eddie on this one: how can you tell the difference between April Fool’s Day and the normal cavalcade of pap? The above bon mots arrive courtesy Jim Press, via theDetroit Free Press. The paper reassures its remaining readers with the news (well it’s news to me) that the shockingly bad March sales numbers—down 36.8 percent overall—are actually good. “Industrywide auto sales are usually about 20% higher in March than in February, largely because March is a longer month and people begin to buy more cars as the snow melts and spring arrives. But this year, industry-wide auto sales increased 24.5% from February to March, according to Autodata Corp. of Woodcliff Lake, N.J.” That’s what I call a stretch. Reuters journeys all the way to Italy to find its silver lining, revealing that the government’s market distortion has created a 0.24 percent rise in new car registrations. And The Gray Lady feels compelled to dignify the Chrysler–Fiat link with pre-pack PR. “‘We’re not doing this because we’re good Samaritans,’ Mr. Marchionne told a New York Times reporter in an interview this year.” Sometimes old news is the only good news, I guess.
Seriously, who can tell anymore? Is there a sad robot somewhere that is programmed to lavish praise on used Sebrings? Surely, in this economy, Tacoma Dodge could find a human being desperate enough for cash to talk up a nice silver ’bring for the camera. Then again, even the robot sounds like it deals with a lot of professional self-loathing. Moving on, GMAC doesn’t really want to spend $5B of its $6B bailout on “subprime auto lending,” does it? That’s got to be a joke, right? And is Carl Levin for real when he tells the DetN that the mere discussion of Chapter 11 for Chrysler and GM is “self-defeating”? Or is the Senator from Michigan in posession of a sharper sense of humor than he is typically given credit for? Now I’m seeing that Automotive News [sub] is running a headline that reads “Wagoner Gets Pension, But That Is All.” Because he somehow deserved more than $20 million? What a bunch of kidders. Yikes! What’s gotten into people? Did the CAW just really tell GM to go NSFW itself? Is Obama’s new Director of Recovery for Auto Communities and Workers’ actually comfortable with openly telling Michigan that he will be a devoted stimulus wetnurse to that great state? Humor just doesn’t need this kind of competition from reality.
The New York Times is reporting a deal struck by the Treasury Department and Cerberus Capital Management which will lead to Chrysler’s second failed marriage in three years. Cerberus (and the co-investors it convinced to come along for the wild ride) will give up their 80.1 percent stake in the company. Anyone who thought Rick Wagoner got the bum’s rush at GM can now say, Wow. Obama’s kicking out the whole freakin’ parent company. Cerberus stands to lose billions. Just how many is tough to glean at the moment. Plans to shore up GMAC and Chrysler Financial—Cerberus’ other Detroit darlings—might help them turn some kind of profit in some kind of future. The dog would like to merge the two lenders into a new hybrid financial institution. The feds aren’t all that thrilled with the idea, but who knows. The word “hybrid” usually gets their attention.
I know, huh? And there I was thinking that easy credit and bad loans were a main contributory factor to our current economic doldrums (aren’t euphemisms grand?). But after the Fed changed its rules at the eleventh hour (behind closed doors) so that GMAC could avoid bankruptcy and become (of all things) a bank, after Uncle Sam pumped $6B worth of taxpayers’ money into the privately-held company’s coffers ($1B of which went straight to GM), the failed “bank” has reversed its reversal of its lax lending practices and opened the taps. “We want to do our part to support both the U.S. auto industry and individuals in the market for a car or truck,” said GMAC President Bill Muir, in a prepared statement. “GMAC now finances a broad spectrum of auto buyers, similar to traditional levels.”
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.
Or not. I mean, it’s got to be an April Fool’s joke, right? With Aston Martin desperately seeking suitors, with cars sales in general and luxury car sales in specific in free fall, could there BE a worse time to announce your intention to enter the supercar arena? (And I sincerely hope the answer to that question is no.) And yet Autocar tells us that “McLaren is planning to claw its way back to the very top of the supercar ranks with an extended range of high-performance models, including a hi-tech successor to the legendary F1.” But be very, very quiet; they’re hunting Bugattis. “Details of the plans have been outlined to Autocar by a high-ranking official with intimate knowledge of the company’s secret business plan.” McLaren’s man in the know says that the P11 will be joined by a new F1, called the P1 (of course). And more! “The Woking firm will use its new mid-engined 430 Scuderia and Gallardo LP560-4 rival, the P11, as the springboard for the eventual introduction of a complete range of cutting-edge supercars designed, engineered and produced in the UK.” As JP said, dreamin’ just comes natural, mate.
The Detroit News has secured GM’s 17-page “progress report” to the U.S. Treasury (link anyone?). Somewhere within that riveting document’s revelations: “GM’s hourly employee costs in 2003 were $18.4 billion in 2003, including its so-called legacy costs. Last year, hourly costs fell to $7.6 billion and the company projects they can be further trimmed to $6.5 billion this year, and to $4.8 billion by 2012.” Sorry, guys, a billion dollars ain’t what it used to be. For comparison, yesterday, GM CEO Fritz Wagoner—I mean, Henderson just kinda glided over the fact that GM will need somewhere between $2 billion and $4.1 billion for the next sixty days. Oh, and by the way? “GM also disclosed it has now sought a total of $10.3 billion in Energy Department loans from the government’s $25 billion low-cost loan retooling program.” The News is non-plussed. “But because the Obama administration said GM’s viability plan isn’t currently viable, and rejected that proposal Monday, it’s unclear if the Energy Department can legally go ahead with any loans to GM.” Sure! Why not!
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.
Detroit’s “last man standing” has taken another one in the chest, as March sales stats reveal a 41-percent drop compared to last year. The Blue Oval Boyz are in full spin mode, proclaiming an enlarged (if unspecified) retail market share, “growing awareness and consideration of Ford and its high-quality, fuel-efficient products” and, oh, yes, have you heard about Ford’s Advantage Program? Still, there is a bounce here, as dead cats GM and Chrysler take it on the chin (exact facial damage to follow). “Ford sales increased 30 percent compared with [a thoroughly miserable, unprofitable] February 2009 with retail sales up 34 percent [compared to February’s thoroughly miserable, unprofitable stats] and fleet sales up 22 percent [compared to February’s thoroughly miserable, unprofitable stats]. As incentive spending is also up, those numbers don’t do much for that whole viability thing. High profit SUVs’ 73.2-percent nosedive can’t help the bottom line, either.
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.
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