The three Japanese majors saw September sales slides that were generally closer to Ford’s mild Clunker hangover than GM and Chrysler’s cliff dive belly-flop. Honda‘s 20 percent overall decline was the worst of the bunch, and was led by a 30 percent drop in Acura sales. In contrast, Toyota-brand vehicles fell 19.1 percent while Lexus actually recorded a 7.3 percent increase. Nissan-brand sales declined a mere 5.8 percent, while Infiniti fell 15 percent.
If you’re looking for proof that shoppers are avoiding the auto industry’s bailout babies, here’s the final piece of evidence you need: Not only did Ford outperform GM and Chrysler during Cash For Clunkers, but it’s also weathering the post-clunker decline with a mere five percent September decline compared to GM and ChryCo’s 45 and 42 percent drops. Across every segment, Ford is proving resilience that cannot be explained by mere product comparisons. Perception feeds reality, and the perception that Ford has not received a federal bailout is clearly helping the Blue Oval move metal.
The bailout babies of the US auto industry took a pummeling in the post-Cash For Clunkers sales environment, as Chrysler very nearly matched GM’s precipitous decline. Unlike GM though, Chrysler isn’t predicting a turnaround by year’s end. “We believe the remainder of 2009 will continue to be a challenge for the U.S. automotive market,” says Chrysler brand boss Peter Fong [via PRNewswire]. “Credit markets have thawed slightly, but still remain tight, and consumer confidence, as we saw in September, is tenuous.” And yet nothing seems to be quite as tenuous as Chrysler’s grip on its razor-thin market share.
“I feel like the tailgunner on the Enola Gay,” was the reaction of one Robert Farago to GM’s just-released September sales data. Mr Farago’s quip does perfect justice to the breathtaking horror of GM’s 45 percent decline from last September, itself a dramatically weak sales month. Any remaining hope for GM’s market share clearly died with Cash For Clunkers, as no segment or brand was left untouched by the carnage. And what did a certain Mark LaNeve have to say about the flesh-melting awfulness on the ground in the RenCen? “September was a tough transitional month for the industry, and a difficult year-over-year comparison for GM. Fortunately, the fourth quarter looks brighter and our year-over-year comparisons should look more favorable.” Clearly LaNeve has confused a mushroom cloud for the light at the end of a long, long tunnel.
Shame on CarMax. While I trust these guys enough to buy an SUV from them, I’m not so happy about their decision to play the estrogen card for PR points. “Buying a car is a hassle for women, according to a recent poll conducted for CarMax, Inc. (NYSE: KMX), the nation’s largest retailer of used cars. When asked about their last car buying experience, a fourth of the women who responded felt a quick and effortless transaction was most missing, according to a new [online] survey of more than 500 women. Fair, low pricing and having a trustworthy salesperson were also cited as the other top factors missing when buying a vehicle.” And this is different for men, how? Rather than concentrating on what unites us, CarMax is focusing on an invidious distinction, pandering for PC brownie points. Check this: the survey asks “Thinking about the last time that you bought a car, which of the following was most missing?” (Most missing?) Only two percent said “Respect” and 13 percent said they’d never bought a car. What does that tell you?
As the Brits say, it never rains; it only pours. The New York Times reports that pickup truck sales are falling into the same bottomless pit that swallowed-up full-size SUVs. Apparently, “the precipitous decline in pickup sales has been greater than many auto executives had expected.” Sure, ’cause the domestic automakers’ suits are so good at forecasting sales, or preparing for their forecasts to be wrong, or reacting when their forecasts turn out seriously awry. I’m not so sure the decline contains as much precipitation [sic] as the Old Gray Lady suggests. “When pickup sales were at their peak in 2004, the segment accounted for nearly 15 percent of all new vehicles sold. This year, pickup sales represent about 10 percent of the overall market.” And remember: even with enough cash on the hood to test their suspensions, pickups are still Motown’s number one money maker. How scary is that, Mr. GM owner? Anyway, it’s the cultural change that intrigues . . .
GM’s grand experiment with Ebay will be over by the end of the month, reports Automotive News [sub]. GM had extended the program once, and was considering continuing it into October. So why didn’t they? Paging GM spokesfolks… we have a cleanup on aisle nine…
The need to roll eBay out nationally isn’t there as it was when we first rolled out the pilot. At the time we had no large, national marketing programs in the system, so that made sense at the time. What we’ve come up with since then are two large, national programs that are already in place.
In other words, failure was not an option… but only because there were no parameters for failure. Gosh that sounds exactly like what Mark LaNeve said when he was asked why the program was being extended despite generating what can only be described as weak sales. Come to think of it, how was the California-only Ebay experiment a substitute for a “large, national marketing program?” More importantly, did GM sell a single vehicle on Ebay?
This pitch for a car sales seminar is based on one single assumption: car buyers today are better informed than ever before. Mr. Rodgers even raises the specter of 83-year-olds armed with information they found on the Internet, in hopes of convincing dealership sales staffs that it’s a whole new world out there. Of course the fact that car sales are at their worst levels in years probably helps his argument, but is it true? After all, as TTAC commenter Mike In Canada points out in our most recent Sebring/Avenger bashing post:
Here at TTAC we all love badmouthing these two hunks of junk (God knows I do). But, we are missing the trees for the forest.
Someone is actually buying these things….!
So there are still suckers born every minute, but on balance are car buyers better informed than they used to be? Is that coincidental to the car market’s recent downturn, or did one phenomenon cause the other? Personally, I don’t see a lot of “civilians” making particularly well-informed car-buying decisions because they usually believe a quick decision will be less stressful than taking the time to make the right decision. What are you seeing?
GM’s executives are well-known for their optimism, a tradition that has been maintained throughout nearly 40 years of sales and market share decline. But in an interview with Reuters, GM CEO Fritz Henderson curbed his enthusiasm, predicting US sales in 2010 will be “between 10m and 10.5m units” this year, and reaching 13m to 13.5m units in 2011. That prediction is considerably less than Ford CEO Alan Mulally’s recent assessment that 2009 sales will hit 11m, and climb to 14.5m by 2011. Henderson blames a weak projection for September sales for his seasonally adjusted annual sales rate (SAAR) realism, telling Reuters the September SAAR would not top 9m units. But GM’s relative pessimism doesn’t mean GM couldn’t be in for a nasty surprise once annual financial information is tabulated.
In case you hadn’t noticed, Ford is in a [familiar] race against the clock. Pre-economic meltdown, it mortgaged everything up to and including their logo. Under ex-Boeing exec Alan Mulally, the Blue Oval Boys have cut costs, improved efficiency, launched new products and gained relative market share. But Ford’s still a gi-normous company that takes in less money than it spends. The Department of Energy’s $10 billion twenty-five year, no-to-low interest loan didn’t hurt The Glass House Gang’s bottom line, but there’s only one way for Ford’s going to become profitable, to begin to pay off their debt and stave off bankruptcy: volume. Specifically, they need the U.S. auto market to recover, in a big way, for them, and quickly. So it’s no surprise that that’s exactly what CEO Alan Mulally says is gonna happen . . .
Not THIS HUMMER (that would be a bit of a stretch). But a HUMMER nonetheless. The Associated Press reports that “Data released late last week by the Department of Transportation shows that tens of thousands of trucks, minivans and SUVs with relatively low gas mileage were among the nearly 700,000 vehicles sold under the program in late July and August. It even included a handful of Hummers, a hulking vehicle not usually associated with fuel economy.” I guess the AP couldn’t say “including a big ass gas-guzzling military-themed HUMMER, the vehicle most reviled by people who thought (even for a second) that the $3 billion Cash for Clunkers program’s real goal was improving the fuel efficiency of America’s automotive fleet to help reverse the irreversible catastrophe of global warming.” Now, there’s a lot of parsing and wrangling and finger-pointing to be done here, as usual. But let’s not lose sight of the salient fact: A HUMMER! Why not? Lest we forget, “for buyers of SUVs, pickups and minivans, that difference [between the trade-in and the new vehicle’s mpgs] had to be only 2 mpg.”
In other news, the final sales numbers are out. The Chevy Silverado pipped the F-150 at the C4C post. The manly man’s pickup picked-up 16,330 sales, vs. 16,263 for the tuff enough [sic] F-150. What does that tell you? As the Silverado is a high profit vehicle for its nationalized manufacturer, the taxpayer-funded sales surge has certainly helped the taxpayer-funded automaker stay alive. How great is that? Oh, and HUMMER is still owned by GM, in case you (or GM’s management) forgot.
Scanning the autoblogosphere, I did a figurative double-take on Autoblog’s headline: 2010 Detroit Auto Show main floor is full, recession officially OVER. Since when does Autoblog do irony? Since never, apparently. Here’s the genesis . . . After a disastrous 2009, where major manufacturers pulled out of the North American International Auto Show (NAIAS) like a recently divorced billionaire riding bareback, the event’s organizers are fighting for their employer’s survival. Like any marketeer steeped in the ways of Motown, they’re going on all-out with their primary weapon: lies. I mean, baseless hype. Kool-Aid anyone? First to drink: the Detroit Free Press. “‘Every space on the main floor is full,’ a marked departure from the gaps that dotted Cobo’s display space this year because of the disappearance of brands including Nissan, Infiniti, Mitsubishi and Suzuki, show chairman Doug Fox said in an interview at the Frankfurt auto show. Fox declined to name any brands that could return because negotiations are ongoing. One leading possibility might be Porsche. The German sports car specialist abandoned the NAIAS for the Los Angeles auto show a few years ago but has been disappointed that its events in L.A. generate less global news media coverage than it received from Detroit.” That doesn’t sound smell like victory in the morning to me. A full main floor—at what price? How many carmakers? In fact, I smell something else. Not Autoblog though.
So, Roger Penske is going to buy Saturn from GM. “Is going to” being the operative words. With the US automotive market sinking to record lows, musical chairing towards a long-overdue “contraction,” one wonder if Mr. Penske is playing the “waiting is winning” game. The New York Times article on Penske’s Saturn plans doesn’t pierce the veil surrounding the devilish details. But we re-learn the fact that Saturn is working towards that glorious day when it no longer sells badge-engineered Opels. “’We’re going to have GM to start with in this business, and then we’re going to move on to another manufacturer in the future,’ he said in his call with analysts.” Which raises the obvious question: whom? “Speculation in the industry has centered on the French carmaker Renault, which has ties to both Nissan in Japan and Samsung in South Korea, and several Chinese auto companies as possible partners for Mr. Penske in the venture. But would Saturn loyalists consider a Chinese-made car a Saturn?” Renault, no. But it’s still an excellent question. The answering of which depends upon The Big One: what IS a Saturn?
Automotive News [sub] brings glad tidings for auto execs drunk on Clunkers: “September’s light-vehicle sales rate will fall to 8.8 million units, consumer auto site Edmunds.com said. That would be the lowest rate in nearly 28 years, tying the worst demand on record.” Well, I did predict an 8m seasonally-adjusted annual sales (SAAR) rate. But did they listen? Noooooo. “They” had to spend $3 billion of taxpayers’ money on a cash infusion that did nothing—zip—to improve the industry’s long term well being. Or even longer. In fact, what’s the bet that the news (which hits for real on October 1) will trigger MORE federal spending on the ailing American automakers? You ain’t seen nothing yet. “Many people regard February as the darkest month of the recession, but even then the SAAR was higher, at 9.1 million units,” Edmunds.com senior statistician Zhenwei Zhou said in a statement. Expect to hear more apocalyptic pronouncements at an MSM outlet near you soon.
“It’s our company’s long-term target, to be China’s No. 1 automaker by 2015 and to be the world’s leading car maker by 2025,” Build Your Dream’s marketing reps tell the AP. Ready for a reality check? BYD sold only 400k units last year, almost all of them in China. In fact, just a few years ago BYD wasn’t an automaker at all, but a battery supplier to laptop and cell phone companies. Several years and a big investment from Warren Buffet later, BYD is getting all kinds of cocky.
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