Automotive News [sub] offers-up the not-so-startling fact that luxury car buyers are trading down. “Downscaling.” Common sense suggests the number one reason not to buy a high-priced luxury car: the buyer can’t afford it. As any good car salesman will tell you, “afford” is an entirely subjective, infinitely malleable term. Hence the term “consumer confidence” as a measurement of whether or not people think they can afford something. You know; even if they can’t, really. And while you’re contemplating what all that means for the American economy, how about this: the “Power Information Network” (J.D.’s mob) reckons the move down the automotive food chain is a reflection of buyers’ psychological need to NOT impress the neighbors. “Especially in this recessionary period, neighbors may not want to show up one another as ‘For Sale’ signs go up everywhere,” [PIN general manager Geoff] Broderick said.” I call bullshit. Since when do Americans tailor their consumption patterns out of sensitivity to their neighbors’ financial distress? The whole stealth wealth thing is a myth. A California Mercedes dealer disagrees . . .

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TTAC has a rule of thumb: if the Detroit Free Press is laying into GM, the trouble must be staggeringly unavoidable. And sure enough, the latest Freepian blast is the result of a predictably bad decision: cranking up production in the face of slack sales and a tough post-clunker market. GM’s decision to bump production by 45 percent next year has a host of analysts lined up to prognosticate profit-sapping incentives when The General finds that it’s building cars faster than people are buying them. “I don’t see what they’re thinking,” says a JD Power senior forecasting manager. “I’m seeing a little bit of shades of the old GM,” adds Edmunds’ Michelle Krebs. GM’s defense?

It’s clearly not the old GM because we don’t have overcapacity, which is what caused the problem before. If you look at the analysts’ own reports, we’re probably being conservative to middle of the road as to where the industry is going to be.

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Keep in mind, Chrysler’s incentives were averaging $4,908 per vehicle in September. Marchionne’s going to be singing the “ask me again in the medium-to-long-term” song for a while.

Unlike Chrysler and GM, Ford has managed to minimize the downward depreciation spiral that’s been plaguing business models across Detroit. In fact, FoMoCo has increased its net pricing by $1.9b in the first half of this year alone. Ford explains this achievement with a reach back to history: a team of 19 P.H.D.s tasked with managing pricing, production and option mixes is given credit, and compared with the “Whiz Kids” of the post-war era in the Detroit News. “They are unbelievable,” gushes Ford’s Jim Farley. “It’s very scientific. I’ve never seen anything like it in our industry.” The Global Lifecycle Analytics Department (GLAD) was formed in 2000, as a modern-day equivalent to the statistical analysis pioneers hired to bring Ford back from the brink of oblivion in the 1940s. By 2005 the team, led by Rose “The Silent Lamb” Peng, had figured out that “the resale value of Ford’s cars and trucks was being eroded by sales of poorly contented vehicles to rental agencies.” Go figure. Let’s hear it for statistical analysis.

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AutoNation CEO Mike Jackson has issues with the industry practice of maintaining 50 to 60 days worth of supply of new vehicles. In today’s Automotive News [sub], Jackson advocates for a 30-day benchmark, blasting the manufacturers for their complacency.

What other business accepts the same benchmark for 50, 60 years and says, ‘That’s fine”? As soon as you put the parts together in a vehicle, nobody cares if it sits there for 90 days. And how you can get those ideas together in the same head is beyond me

Disagree? Take a look at the latest Automotive News [sub] inventory report before you weigh in. One example: as of September 1, Buick had a 25-day supply of LaCrosse and a 130-day supply of Lucerne. Cadillac and Lincoln also had no models with fewer than 72 days of supply. It seems this Jackson character is on to something…

Brand                Mid-size                    Full-size

Toyota             Camry:25,745               Avalon:1,939

Nissan             Altima:12,149                Maxima:5,901

Hyundai             Sonata:7,898                Azera:339

Ford                Fusion:10,834              Taurus:5,077

Chevrolet       Malibu:10,479            Impala:13,047

Chrysler         Sebring:1,451              300:3,411

Fritz Henderson just confirmed in a conference call that GM’s VP for US Sales Mark LaNeve will be leaving the company by October 15. An email by Henderson obtained by the Detroit News, makes it clear just how long LaNeve outstayed his welcome. There’s damning with faint praise and then there’s this:

Mark has contributed significantly to GM in several key positions, including transforming the Cadillac brand and leading the vehicle sales, service and marketing organization during one of the most challenging periods in GM’s history. Please join me in thanking Mark for his dedication and wishing him and his family well. A replacement for Mark will be named at a later date

Brook from team-bhp.com sent us this heads-up re: the “other” burgeoning automobile market: India. “Here’s a list of the Top 20 selling cars in India. Ford doesn’t have one car in the top twenty. Chevy has one, thanks to a rebadged Daewoo called the Spark. Suzuki (Maruti) and Hyundai are the clear leaders. Tata could have done better if only the unfortunately named Indica Vista wasn’t so conservative. Most people confuse it with the older first generation Indica. Tata Nano volumes will pick up, but Jag and Landie’s owners barely make any money selling the car itself. Honda’s hawking overpriced (and poorly equipped) cars with terrible after sales service as ‘bonus,’ and Hyundai are stealing their lunch.” So now you know.

Bill Owen from Carport Confidential shares a graph comparing September 2008 with September 2009 sales.

[via The Freep]

[Thanks to Stingray for the charts]

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Volkswagen was up 1.5 percent, despite huge drops in total Rabbit (-74.5 percent) and Passat (-55.8 percent) sales. Passat CC more than made up the difference for its pedestrian sibling, selling nearly three and a half times the Passat at 2,290. Tiguan (-17.7 percent) and Touareg (-49.4 percent) tanked, but surprising Routan sales (+140 percent, 901 units) helped make up for it. Jetta wagon was down 9.1 percent but Sedan sales rose 10.4 percent on much higher volume, making for an 8.5 percent increase. New Beetle dropped 12.1 percent while Eos fell 21.8 percent. Audi was down 4.9 percent with only A3 (+26.1 percent), A5 (+37.3 percent) and R8 (+5.5 to 77 units) up on the month. Q7 (-46.7) and A8 (-28.4 percent) were the biggest losers.

Mercedes was down 9.6 percent with only the refreshed E-Class (+28.4 percent) making significant volume gains. The new GLK sold 1,558 units, but that wasn’t enough to beat ML volume which slid 14.4 percent to 2,552. Mercedes’ best seller was the C-Class, which fell 26.1 percent to 5,002. That model outsold E-Class and S-Class put together.

BMW sales increased 3.6 percent in September, including a 9.7 percent bump in MINI sales. BMW-brand cars were up 17 percent while SUVs fell 37 percent. The 3-Series was the best-selling Bimmer with 6,523 units sold.

Porsche was up eight percent, with Cayman and Boxster models gaining faster than most 911 and Cayenne models. Carrera 4S and 4S Cabriolet were exceptions to unexceptional 911 sales, recording 89 and 105 sales respectively.

Earlier this year, when sales were down almost across the board, Subaru was usually Hyundai’s only company in the sales-increase club. Subaru didn’t come close to Hyundai’s percentage increase in September, recording only one percent growth, but it’s still up ten percent year-to-date. Impreza tanked by 42 percent after the Clunker crowd binged on Suby’s smallest model last month. Tribeca also stunk it up, falling to 358 units. Otherwise things were all cheddar and gravy (so to speak). Forester, which carried Subaru’s strong showings through most of the year, edged up by one percent. But that was more than offset by a 63 percent boom in sales of the new Outback, which hit 4,268 units. Legacy added 2,762 sales, a 24 percent increase.

If Ford, Honda, Toyota and Nissan are nursing headaches after the Cash For Clunkers party and GM and Chrysler are still asleep in puddles of their own vomit, Hyundai Group never went to sleep and is still partying hard. With sales up 26 percent over September ’08, Hyundai is holding a clinic on the difference between a soft landing with an excuse and real success. And Kia [via Autospies] isn’t far behind, with sales up 24.4 percent. As if to prove that nobody has it easy in today’s global car game, Bloomberg reports that the strength of the Korean Won is gouging Hyundai’s overseas profit. Still, in the American market, Hyundai wouldn’t trade places with any other manufacturer.

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