And the scramble for ways to say “it’s not that bad” is on. GM’s Press Release suggests pointing out that deliveries are up compared to October and November. Just don’t bring it up around your friendly local GM dealer/overstock storage depot. They’re still trying to forget October and November. And a four percent drop in inventory compared to last December doesn’t really make their collective 872k unsold units look any better. GM unit Meanwhile, GM’s total annual vehicle sales for 2008 fell below three million, at 2,980,688. That’s a 23 percent drop since 2007.
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Have we mentioned recently that selling cars is difficult these days? Honda sales dropped 34.7 percent in December compared to the previous year. And that’s despite being one of the few automakers to run car-as-stocking-stuffer ads. Like this little beauty which reminds Americans that inside everyone one of us lurks a small, toy-crazed child who knows that he wants an MDX. But even “low finance and lease offers” couldn’t cut through deathly silence in credit-fueled consumptionland this holiday season, and holiday non-sales dragged Honda to its first annual US sales decline since 1993. A 34 percent monthly and 6.7 percent annual drop may look good in this market, but Honda is doing some serious stretching to proclaim the “joy” to be “back.”
Or, as the FoMoCo PR types put it, “F-Series Drives Ford To Higher Market Share For Third Straight Month.” And, to be fair, this is the first time since 2001 that the company’s Fourth Quarter market share was higher than a year ago. As usual though, the real story comes in the final sentence of Ford’s press release, which reveals that “for the full year of 2008, Ford, Lincoln and Mercury’s market share is estimated at 14.2 percent, down 0.4 points versus a year ago.” On the bright side though, “this marks the company’s smallest decline in market share this decade.” Party!
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…
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’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.
The federal government buys GMAC and the MSM says huzzah! The credit taps are slowly starting to reopen! Meanwhile, on the front lines, the same scum-bags who helped cause this economic crisis by pushing people into cars (and houses) they couldn’t afford are busy reinventing the same wheel that came off before. In other words, predatory lending is back (did it ever leave?). And it’s bad! The Orange County Register lifts up the rock to reveals the slugs underneath (now with federal backing). In Q & A format, no less.
Sales is one of the few professions where employees must maintain a positive attitude– no matter what. John Candy’s curtain ring sales in the movie “Planes, Trains and Automobiles” exemplifies this “never say die even when you’re dying” job requirement. Arthur Miller’s “Death of a Salesman” is the excruciatingly pathetic flip-side. MLive gives us sample of latter day unfettered optimism. “‘Traffic started picking up with the announcement that GM had the loan money,’ said Bob Johnson, new car sales manager at McDonald Pontiac, Cadillac, GMC Truck, 5155 State in Saginaw Township. ‘Then they came back with the GMAC rates. People are starting to loosen their belts.'” ML pauses for a quick reality check: “The Detroit automakers are trying to weather the biggest automobile sales slump in more than 26 years. Forecasts for December range near 10 million and actual sales could prove the lowest since August 1982.” And then we’re off for another spin around fantasyland. “Savvy buyers know the kind of deals available, said Rob Roy, news car sales manager at Draper Chevrolet, Dodge, Toyota, 4200 Bay in Saginaw Township. ‘They’re aware of the incentives,’ he said. ‘But it doesn’t matter what brought them in. Business has been good since (Dec.) 26th.'” For which part of the biz, Bob? Chevrolet, Dodge, Toyota or all three? Not specified. More of the same after the jump, plus doom and gloom and things go boom– in Bloomberg’s blog!
You just know they’re going to get it wrong. And so they do. Number One: Full-Size Pickup Trucks. Huh? If any market segment is likely NOT to restore The Big 2.8 to glowing good health, it’s the PU segment. But no. I mean yes! “The Dodge Ram is new for 2009, as is the top-selling Ford F-150, while the Chevy Silverado and GMC Sierra twins combine to sell more than any of them. With the Toyota Tundra in retreat and Nissan ready to surrender the segment (they’ll be getting their next generation of Titans from Dodge), cheap gas should keep buyers putting their money into these profit centers.” And if the housing market stays in the toilet, the market remains saturated with trucks or the price of gas goes up? * crickets chirping * No wait! Number Two: American Muscle. Huh? Talk about carving-up smaller pieces a decreasing pie. Nope. Fox is saying halo to the new Camaro, Challenger and Mustang. “Forget for a moment all of the goody two-shoes environmentally conscious cars Washington wants the Detroit 3 to build: These are the ones that look best in the commercials and get shoppers into showrooms. They may not sell in huge numbers, but you can’t pay for the kind of pride they bring to a brand’s image.” Apparently, you– I mean “we” can. Number Three…
The analysts at Credit Suisse (CS) get no points for predicting the continued cratering of the U.S. car market [full report after the jump]. But one has to wonder just what in the Hell GM was thinking when it predicted 12m unit sales in the U.S. as late as late summer. No matter how you cut it, or what incentives GM’s offering, the American automotive industry is looking at sustainably low numbers. And speaking of “sustainability,” CS is now starting to factor in consumer fears of bankruptcy. When the words “bailout backlash” start to appear, as they surely will, it’ll be all over bar another $50b or so in taxpayer subsidies. Sorry, loans. Meanwhile, there is some good news here: CS reckons The Big 2.8’s production cutbacks will clear their 35 percent overstock. And “all else equal, GMAC’s increased access to funding could increase GM’s sales by several hundred thousand units in 2009.” Good luck with that.
12/30/2008
To: All GM Dealers
Subject: GMAC APR RATES
Date: December 30, 2008
I wanted to update you on the recent actions that have taken place with regard to GMAC obtaining bank holding status.
We believe GMAC’s ability to extend financing will be greatly enhanced.
To that end, I am pleased to tell you that starting today, GMAC will be offering reduced rate financing as low as 0% APR for up to 60 months on select new cars and trucks. The reduced rate financing is available to qualified buyers (S, A, B and C tiers) through January 5, 2009.
In addition, we have stackable bonus cash and/or dealer cash of $500 to $4,250 on some models.
Following are examples of the supported rates being offered:
KBB/Carmax
1. Honda Civic /Honda Accord
2. Honda Accord/Honda Civic
3. Toyota Camry/Toyota Camry
4. Toyota Corolla/Ford Mustang
5. Nissan Altima/Nissan Altima
6. Honda CR-V/ Chevrolet Tahoe
7. Toyota Prius/Ford F-150
8. Toyota Highlander/Toyota Corolla
9. Toyota RAV4/Toyota Tacoma
10. Mazda3/Nissan Maxima
11. Toyota Yaris
12. Ford Escape
13. Honda Odyssey
14. Honda Pilot
15. Honda Fit
16. Ford Mustang
17. Chevrolet Malibu
18. Toyota Sienna
19. MINI Cooper
20. Volkswagen Jetta
“Politicians and pundits always like simple answers. Unfortunately simple answers, as appealing as they are, are usually wrong. Life is inherently messy and complicated, which is something die-hard conservatives and liberal politicians never seem to understand.” Uh, OK. That’s the coda to an article by Joseph Szcesny. ToMoCo’s rise the top of the global pile and Detroit’s plummet into the depths of bankruptcy (in all but name) inspired the Oakland Press scribe to chastise all and sundry on a mid-winter Sunday. Be that as it may, it’s certainly true that “Toyota Motor Corp. is very likely to replace General Motors Corp. as the world’s largest automaker next month once all the sales for the 2008 are finally totaled up by both companies. Toyota is also expected to emerge for the first as the best selling brand in the U.S. for the first time ever, beating out both Chevrolet and Ford.” In fact, on the world stage, this is a repeat performance. Last year, GM used weasel words to cast aspersions on Toyota’s claim to the world’s largest automaker crown (GM added a minority joint venture in China to their global totals). At the time, GM CEO Rick Wagoner said the title wasn’t important; profits were. You can almost hear Red Ink Rick’s Szcesny-like refrain. Hey! Life’s complicated.
Successful GM, Chrysler Dealership
Location: Mississippi > Confidential
Industry: Auto Related > Auto Dealers
Financials
Asking Price: $1,500,000
Cash Flow: $776,677
Cash Flow Comments: EBITDA
Real Estate: $2,000,000 (Not Included in Asking Price)
Seller Financing: Maybe
Business Summary
This is a very well established dealership that continues to have strong profits and sales. The area is growing and strong economically with job growth. Strong service department and parts sales departments are very profitable and enjoy a great reputation. One owner is willing to continue to operate as a minority partner. Only serious inquiries please.
About the Business
Year Established: 1955
Facilities: Great
Market Outlook and Competition: Strong
About the Sale
Management Training and Support: Yes
Reason For Selling: Retirement of majority owner
In a broadcast to dealers, GM marketing maven Mark LaNeve has reassured Saturn store owners that The General has no plans to send the brand to the firing squad. In fact– no. That’s it. “General Motors’s US sales chief has played down speculation the automaker will axe Saturn,” just-auto [sub] reports, “hinting instead a new business model for the ‘no-haggle’ brand would be developed.” And that would be…? “We have a very successful consumer brand with Saturn,” LaNeve lied. “We need to find the right business model.” What’s the rush? After all, “GM is focused on clearing 2007 and 2008 model year vehicles from showrooms by the end of the year.” LaNeve reiterated that point several times, telling dealers GM would like to add more discounts on 2009 vehicles– but they’ve got to sell the remaining 2008 cars and trucks first. (Doh!) “We need to sell to generate cash. We will be aggressive [on incentives],” he added. “Please, sell like crazy.”
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