Audi’s quest to become America’s upmarket alpha has hit the wall. It might be the same wall Mercedes, BMW, Lexus, Cadillac et al. have struck, but it’s b-b-b-b-b-bad. You know sales suck when Audi PR doesn’t mention the actual percentage drop and headlines A5 and, worse (better?), R8 sales. “The Audi A5 posted a 76.3% increase over last January with 603 units sold in January 2009. The Audi R8 broke its January sales record with over 107 units sold, an increase of 75.4% over January’s sales a year ago.” Woo-hoo! Meanwhile, A4 sales evaporated, down 29.4 percent. The high profit A8 is DOA: sales off 65.1 percent. Sales of the TT roadster (-51.8%) and Q7 SUV (-44.7%) indicate two other dead models not selling.
Honda reported in with their sad sales numbers with unadjusted monthly sales down 27.9 percent. Fit sales were steady, up 5.9 percent. Accord and Civic took drubbings of minus 31 and minus 32 percent respectively, with the Civic Hybrid down 62 percent. Light truck sales were down 27 percent with the Odyssey minivan trailing an unusually heavy 38 percent hit. (The number one selling minivan nameplate just took a back seat to the rebate-stuffed Toyota Sienna.) Over on the Acura side, TSX buyers ignored TTAC reviews and sent sales up 16 percent, which comes out to a little over 300 cars. The more expensive numb-feeling, shovel-nosed sedan, the TL, was down 40 percent. The Acura CUVs got similarly neglected, down 46 percent. Needless to say, Honda’s management team is on the case. Well, someone’s case.
The fact that BMW’s sales are down compared to January of last year should come as no surprise. These aren’t just cars, they’re luxury goods. What’s significant is the breakdown of model sales. The 3-Series and X5 sold 5471 units combined—44% of BMW’s entire sales for the month of January. Add in the 2596 units of 5-Series sold and between those three models (3, 5, X5) you have twice as many cars as the rest of BMW’s lineup combined. To wit: the 1-Series sold 716, the BMW Z4 roadster and coupe sold 45 units (down from 363 last January), the putrid X6 managed only 266 sales and the spine-crunching X3 registered 394 sales. And then there are the 6-Series (304 sold) and the 7-Series at a whopping 23 units. The explanation is that the next-generation 7-Series hits BMW dealers in a few months; same for the next-gen Z4. It’s not all bad news for BMW though—the M sub-brand had a record year in 2008, with its sales rising 50% over 2007. Dealers report that the boost in sales came from offering to throw in a free tub of hair gel with each sale.
Well, you knew it was going be ugly. This one’s Medusa class. January sales fell 54.8 percent vs. last January, from 137,392 to 62,157 vehicles. Breaking that into bits, car sales sank 66 percent (15,747) while trucks tumbled 49 percent to (46,410). Chrysler fingered two culprits. First up, fleet sales. Believe it or not, the company claimed credit for the 81 percent fall from their “normal” fleet sales total. Apparently, the drop “aligned with the Company’s sales strategy helping to maintain or improve the overall residual value of Chrysler vehicles for our customers.” Second, tight credit.
“Chrysler LLC received the first $4 billion installment of our $7 billion bridge loan from the U.S. Treasury in early January,” said Jim Press, President and Vice Chairman – Chrysler LLC. “However, it wasn’t until later in the month that Chrysler Financial received its $1.5 billion loan, greatly enhancing its ability to support our dealers and provide credit to our customers. We were very encouraged and working closely with Chrysler Financial, were immediately able to introduce our zero percent financing for customers.”
Ok, 48.8 percent, actually. Or, as GM’s Mark LaNeve puts it in the company press release, “We’re attacking this unprecedented market as aggressively as possible, while offering more vehicles than ever that provide great value and that Americans enjoy owning. Our retail market share is a bright spot, holding steady above 21 percent for the second month in a row. That’s a full point above the trailing 12-month average. It’s important to realize that we accomplished this retail performance as the overall market ran about 6 million vehicles behind where it was last January (on a seasonally-adjusted annual rate) and every manufacturer was deeply impacted.” And that’s about as positive as it gets, folks.
Toyota sold 117,287 vehicles this January, falling 34.4 percent compared to January 2008. Losses were split relatively evenly between the Toyota/Scion division (down 34.9 percent) and Lexus brand (down 30.3 percent). Toyota doesn’t break out Scion brand sales for its press release, but all of its models are down between 41.8 percent (xD) and 59.5 percent (tC). Corolla (down 10.8 percent), Lexus RX (down 7.2 percent) and FJ Cruiser (down 18.7 percent) were the best performers in the ToMoCo lineup. Elswhere, sales drops by model were as bad as 67.2 Percent (Land Cruiser), 61.6 percent (Lexus SC) and 63.6 percent (Lexus GX). Hybrid sales hit 11,876 in January.
Automotive News [sub] reports that US-market sales of Ford, Lincoln and Mercury-branded vehicles fell 39 percent in January, to 90,131. “Retail demand appears to have stabilized,” Ford sales analyst George Pipas told AN before those numbers were announced “Regrettably, but understandably, it stabilized at a low rate. But before you can begin to improve, things have to bottom out.” And have they ever. Ford’s press release is a roiling sea of not good, with Volvo down 64 percent, Mercury down 44 percent, Lincoln Down 23.7 percent and the Ford brand 39.5 percent versus January 2008. Fusion was the only significant seller that dropped less than 20 percent (Volvo V50 was down only 16.6 percent with a big 136 models sold, and the Towncar is up 147 percent at 510 units sold).
Despite looking at a half-sized Q1 production plan, GM says it will bump truck production in the month of March. Production will be restored and escalated in March at GM’s Flint and Arlington truck plants, meaning there will be more Silverado, Sierra, Tahoe, Yukon and Escalade models. So, uh, why? “As far as our 2008 and 2009 mix goes, we’re significantly down on 2008 models, where most of our competitors have a lot of 2008 to get rid of. So anticipating a spring selling season, we’d like to increase our 2009 inventory,” GM’s Pete Ternes tells Automotive News [sub]. GM’s truck inventory has dropped noticeably, from a 122-day supply on December 1. But with 90 days of light truck supply, there’s still no real reason to increase production. Most industry-watchers consider a 60-day supply ideal. So what’s up?
Following the Scottsdale auction season, dealers at the top end of the collector car market breathed a collective sigh of relief. As the the New York Times headline put it, the auction action proved that prices “Soften but Don’t Crash.” Maybe so, but there’s a hidden dynamic involved. “People tend to forget that the auction houses work just as hard at reducing the sellers’ price as they do on getting the buyers to pay it,” says Mike Nicholl, proprietor of Las Vegas’ Classic and Collectible Cars. In other words, the results simply reaffirm that car sellers’ willingness to take a hit currently matches buyers’ bargain-hunting budgets. The General Manager of Lamborghini Bergen County (NJ) agrees. He says pre-owned inventory levels are up, but the deals are still going down. “More people are hurting, looking to get out of their cars,” Alan Greenfield says. “But the lower prices are attracting new buyers.” Despite the market’s recent diet of anti-gravity pills, or at least away from the people dispensing same, there are signs that the high end market is headed for collapse.
Holy lack of internal controls Batman! Automotive News [sub] reports the “now it can be told” story behind the story of a Minnesota mega-dealer’s collapse. Chrysler pulled the plug on Denny Hecker last fall, forcing Hecker to close six of his 16 dealerships and sell three others. Turns out Chrysler Financial lent the “flamboyant 56-year-old entrepreneur” $550 million. And get this: $50m of that went to Hecker personally. The information surfaced after Hecker sued Chrysler Financial for canceling his dealerships’ credit lines “without warning.” Chrysler countersued, revealing that it loved them some Hecker. Post-Cerberus, ChryCo threw money at—I mean, “invested”—in Hecker’s dealerships, a rental car agency (since bankrupt), real estate and “investment firms.” Ford was behind the curve on this one; they’ve sued Hecker for a relatively paltry $3.1m for missing vehicle and parts payments. As the Detroit-shaped crater grows larger, look for more “revelations” from American automakers’ go-go past. Others may have done the same thing, but they won’t be facing the same volume or genre of music if/when their dealers end up in bankruptcy court. Meanwhile, Denny better hope his tagline doesn’t apply to his forthcoming court battles: “Nobody walks!”
Friends’ star Jennifer Aniston crashed her Jaguar back in the 00’s. Since then, Jennifer has kept the PC flame alive with her Toyota Prius. Courtney Cox crashed a white Bimmer in Hawaii, but she’s normally seen driving a Range Rover (even if she isn’t sure which one’s hers). Sarah Jessica Parker got to keep her clothes from Sex and the City; here’s hoping Ms. Cox added an Audi R8 to her Dirt contract. Lisa Kudrow snagged a car out of her deal with Lexus’ internet-only L Studio. Matt LeBlanc races for fun, and fessed-up about running a Porsche Turbo on Conan O’Brien. Well, not on him… Matthew Perry also crashed a BMW, but moved on to a Porsche Cabriolet. David Schwimmer’s first car was a 1976 Chevy Monte Carlo. Pause. He also dated Minnie Driver. Pause. And that’s enough for the guy who went from being a poster child for sarcasm to the whiniest man on planet Earth. Now, ALL of them can get do the right thing for American manufacturing (whatever that is) AND get a discount on a GM product simply by finding a “friend” who works for the company. For people who pay people to get rid of stalkers, how hard can that be? And you can get the same deal too! Not on stalkers but GM products! GM’s announcement to its employees after the jump.
Well that didn’t take long. From stupid-ass dealer mark-ups to employee pricing discounts and/or zero percent financing in just over a year. Those fire-sale prices include the Dodge Challenger SRT8, despite the website’s fine print. In fact, the word on the street says you can get $4k off said top-of-the-line pavement smoker without much haggling. More if you’ve got a hard nose and cold cash (preferably financing, but beggars can be choosers these days). If you were waiting for the Challenger SRT8 to get some much-needed handling updates (e.g., a real limited slip diff), let it go. Saying that, who gives a NSFW about corners? I want me one of them 1000 NHRA Drag Race package Challengers, with added lightness, a shortened wheelbase and, uh, stuff. The livery’s not the worst I’ve ever seen. Okay, it is. But. I mean. Well. Anyway, it’s time for those TIWWRS (this is what we’ll really sell) six-cylinder Challengers to see if they can play Hertz. Only, the Challenger makes a lousy rental car with its challenged packaging and not-so-hot fuel economy. Oh, and the reason I’m blogging this now? A friend tried to sell me an immaculate a 10k mile Challenger SRT8 for $25 grand. Ouch. Quick aside. Is it me, or do all these guy vs. guy, middle-of-the-night drag race ads have a homosexual subtext?
Rumors of GM channel-stuffing became reality when we heard that the General was forcing dealers to take on unwanted inventory to qualify for incentive cash. And while the smaller dealers are stuck between a rock and a hard place, big boys like AutoNation at least have enough clout to make a choice. And CNN reports that AutoNation has told GM where it can stick its overstock. GM and Chrysler “have implemented wholesale incentive programs where they basically say to get the incentives for the inventory you want, you have to buy more inventory,” AutoNation CEO Mike Jackson said Thursday with his trademark subtlety. “The channel is full, and they are trying to stuff more in. I think this is the wrong thing to do. We are not playing that game.” Meanwhile, GM and Chrysler are exhorting their dealers to take more unwanted inventory. While on a sales drum-up dealership tour last week, Chrysler Vice Chairman Jim Press said the automaker needs dealers to begin ordering vehicles because the “downside could be a lot worse” if orders don’t increase. For the OEMs, anyway. AutoNation’s fourth quarter sales dropped 34 percent, although $200 million in cuts and $750 million in debt paydown last year have helped keep the retailer afloat. “We do believe that there’s the possibility of an improvement in March if credit really begins to thaw, but we are taking a wait-and-see attitude,” Jackson said. “We want to see it before we’ll stop at that level.”
Gentlemen, start your “German Engineering” jokes! The Windsor Star reports that Chrysler’s Windsor Assembly Plant has received a “no build” order for Routans in the month of February, despite workers returning from a long winter break on February second. According to a union local official, VW requested a month’s furlough of Routan production, “in order to adjust their inventory. Sales are slow across the board and VW is no different.” Local 444 President Rick LaPorte calls the no build order “worrisome in terms of volumes.” Windsor had been assembling 300 Routans per day, but with 30k of the rebadged Caravans sitting in the VW dealer net, slow sales are becoming a major concern. VW sold 8,812 Routans last year, falling well short of the pace needed to meet sales goals of 35k units per year (3k-4k per month). Read TTAC’s review of the Routan here.
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