Not unexpectedly, Chrysler's results once again tumbled into terrible. The ailing American automaker's sales fell 28.8 percent overall. Sadly, the sales breakdown doesn't look much different than last month's. But that should come as little surprise; absolutely nothing has changed. Thanks to ChryCo's uninspiring and truck-heavy product mix, the sales chart again lists a whole bunch of double digit percentage drops.  Overall, cars were down almost as much as trucks:  28.2 percent for cars vs. 29 percent for trucks. The minivans have switched places – T&C up a few thousand, GC down a few hundred. Dodge's big hair van (the Journey) is selling slightly better than the brand-new Challenger. The smallest cars are again underperforming, with only the Jeep Patriot in positive territory, up a paltry 4 percent. A gaggle of discontinued vehicles– Chrysler Crossfire and Pacifica, and Dodge Magnum– are down in minus 80 percent territory. The Durango, which has not been discontinued (yet), due for Lame Duck Dual Mode hybridization, is also down 84 percent. Just 384 trucks left the lot. Chrysler's Project D fuel-sipping mid-size sedan can't come soon enough. Literally.

Despite predictions to the contrary, Honda reported a sales loss this month compared to July 2007, down 1.63%. Total car sales went up 14 percent, but were outweighed by a 22 percent drop in truck sales. Accord sales led the pack with a very healthy 41,382, Civic further behind 29,125, and both up over the year before– but not enough to boot Ford F-Series from the sales throne. Fit posted an all-time high at 12,266, and Acura's sole bright spot was a 25.6 percent rise in TSX sales. Almost every other vehicle was down by double digit percentages, including all CUV's.

No excuses needed here. Nissan's sales are back from the dead. (Did someone say truck incentives?) Even with three fewer selling days for July 2008, Nissan division sales were up 9.9 percent (unadjusted) over last year. Versa and Sentra's double-digit percent sales increases led the pack, Altima sales were basically unchanged at an impressive 24,429, and the brand spanking new Maxima was up a few percentage points from last year. Truck/CUV sales were up, thanks to sales of the new Rogue as well big gains by the Frontier, Pathfinder, and Quest (all three vehicles were roadkill last month). On the other hand, Infiniti sales were down 2.9 percent; all cars save the G Coupe had declining sales. Rising sales of the new(ish) EX and FX CUV's were not enough to offset the drop in cars sales.

After two months of declining sales, analysts are losing faith in the European market. They predict that the down cycle could last until sometime in 2009. That's bad news for everyone, but it comes at a particularly bad time for America's automakers, who are banking on overseas sales to make up for a moribund US market. The Detroit News reports that Europe accounted for nearly a quarter of GM's global sales last year at 2.2m units, while Ford's (non Jag/Landie) brands sold 2.4m vehicles in the Eurozone. And though overall European sales are down only two percent on the year, declines have been increasing, with eight percent drops in May and June. The European automakers' association predicts a 2.7 percent decline this year, though individual executives say it could be as much as four percent. "Having seen the developments in some European markets in the last six to eight weeks, I think it could be worse than that (four percent decline)," Daimler's Dieter Zetsche told analysts during a quarterly earnings conference call. Even the once-hot eastern European markets are declining, eliminating further opportunities for European sales growth. Which means the D3 have less opportunity to squeeze sales from abroad while the American market corrects itself. Not good.

Ouch. The Summer of Detroit's Discontent (not to mention everyone else's) continues to hammer the worst laid plans of truck-heavy automakers. And while everyone gives FoMoCo CEO Alan Mulally credit for being the most "realistic" of The Big 2.8's helmsmen, he ought to have a word with his PR department. Do they really think headlining their all-caps press release "FORD FOCUS CONTINUES TO SURPRISE, OUTPACE SEGMENT" is going to distract anyone from the fact that Dearborn's darlings' overall sales are down by 14.7 percent versus last year? On second thought [via The Detroit News]… "Car sales were up 7.8% in July compared to a year ago. Meanwhile, sales were down 7.8% for crossovers, 54.4% for SUVs and 18.1% for pickups and vans." FYI, Focus sales (a horrible car by my snobby estimation), totaled 15,200 units. Toyota shifted 34,438 Corolla's in the same time period. Just sayin'.

Click here for Ford's sales press release 

(Note:  The numbers in the press release are adjusted for sales days, so they will vary from the unadjusted numbers reported here.)

Never mind what they said before. GM is joining Chrysler on the huge-incentives-for-2008-trucks bandwagon. Starting today, they'll bump the rebates on GMC Yukons, Yukon XLs, Chevy Tahoes and Suburbans from $2k up to $6k. And get this– the Hybrid models are included. Envoys and Trailblazers will get the same $6k discount, with another $2k tossed in as a lease "pull-ahead" bonus. Avalanches and crew cab/extended cab trucks have $5k cash on the hood. In lieu of the rebates (or in addition to, in some cases), they're also offering low-to-no-percent-interest financing. On the car side, Chevy's offering 0 percent financing for 48 or 60 months on Corvette coupes (including Z06) and convertibles, respectively. Pontiac is bribing offering buyers a $1k bonus on the G8 sedan. Other GM models offer varying interest rate and/or nominal cash back offers. However, according to Automotive News [sub], GM spokesman Pete Ternes warns these figures could change "after GM releases its [Q2] earnings." If anything, you can probably expect them to sweeten the deal in a last ditch, damn-the-profits attempt to clear the '08s from dealer lots.

Despite the fact that SUV are PC pariahs in The Land of Hope and Glory, despite the fact that unleaded costs $8.74 per gallon, SUV sales are up 11 percent on the year. Londoners are buying up SUVs faster than any other municipality. As London's roads haven't reverted to potholes and cobblestones, there must be some other way to logically explain this trend-defying headline. Are the expat Russian billionaires beefing-up their security entourages? Are conservatives celebrating the demise of Ken Livingstone and his $50/day C-charge plan? Is Clarkson on a Landie kick? Why is Old Blighty leading the Charge of the Light Truck Brigade while we here In The Land of the Free run for our Priora at first sign of $4 gas? Whatever the reason keep in mind that Britons consider things like the Daihatsu Terios an "SUV"– even though it sports a 1.5-liter engine and gets a combined 35mpg. Um, not that there's anything wrong with that…

Why would anyone gloat about The Great American SUV's spectacular fall from grace? Why wouldn't they? As for San Francisco Chronicler Mark Morford's gleeful epitaph, the main question here is, "Dude! What took you so long?" Whatever your take on the topic, you gotta admit MM dances on the SUV's grave with pugnacious panache. "Who didn't note the beginning of the end when, five years ago, the world's worst consumer vehicle ever took its place as the poster child for all that went wrong with the condescending American ethos, the oil-sucking war-drunk Bush-mauled mind-set? Ah, the Hummer H2. Has any consumer product embodied our misguided arrogance better? The ridiculous scale, the horrible handling, the contemptible road manners, the false machismo, the Cro-Magnon design, the ability to traverse 60-degree rockslides in a hurricane even though all you ever really needed to do was run over those little concrete bumps in the Wal-Mart parking lot. Dude! Righteous!" And here's the really scary part: Detroit Free Press' Matt Helms' po-faced, mea culpa response. Has Motown's mauling put it into a terminal funk?

WSBTV.com seems somewhat surprised by a J.D. Power study that shows the obvious reveals a new trend: sporty crossovers appeal to younger women. Roger that. Women are generally attracted to the appearance of sportiness (witness the VW Tiguan's 61.7 percent female ownership and relatively dismal performance). J.D.'s mob says they also go for utility. Also "revealed:" women like 'tried and true' safety features (newer technological safety advancements tend to come with high price tags– something more 'rational' women tend to avoid when purchasing vehicles. No doubt crossovers appeal to women who are a bit gun-shy on a gas-guzzling SUV, but still want space, a higher riding position and the eventual child-hauling ability (yes, some women do think that far in advance). Another non-stunner: 90 percent of Corvette and Porsche 911 purchasers are men. Mid-life crises? What mid-life crisis? The real surprise: automakers still aren't marketing to women. J.D. reckons women account for about half of all auto purchases, and influence 80 to 90 percent of all auto-purchasing decisions. You'd think they'd be marketing something more than Beetles and Mercuries to the ladies by now…

To all U.S. Dealers:

The announcement last week that Chrysler was discontinuing all leasing in the United States was big news and widely covered. You may also be aware that Chrysler had previously announced the discontinuation of incentivized leasing in Canada.  Yesterday, GMAC in Canada announced it will exit incentivized leasing on August 1. Further, it is worth noting Ford Motor Company and Honda Motor Company recently announced they were taking an impairment against their lease portfolios. Suffice it to say, numerous factors are driving up the risks and costs of leasing and therefore, it is coming under increased scrutiny across the industry.

All of this has prompted numerous inquiries from our dealers regarding GM vehicle lease business in the United States.

Obviously, current financial pressures will continue to affect our perspective on leasing. That said, while we obviously can't make guarantees, we are in the market today with competitive programs to make GMAC leasing more affordable and plan on continuing to offer this financing alternative as part of our August incentive play on '08 and '09 models (with some adjustments and exceptions).

Over the last few years and months, lease vehicles have become a smaller percentage of our sales, and we do see this trend continuing due to the relative high cost and risk compared to traditional cash or APR business. This is why we offer a balanced menu of cash incentives, APR and leasing programs to make GMAC financing an affordable alternative on almost every product in our lineup.

Rest assured we will make every effort to stay aggressive in this hypercompetitive market.
Thanks for your support.

Mark LaNeve
Vice President
Vehicle Sales, Service and Marketing

While Chrysler and GMAC are cutting out leasing altogether, Ford is just raising lease prices on its sucky-residual trucks and SUVs to make them "lease proof." The Wall Street Journal reports Ford officials sent a memo to dealers Monday that said "due to extreme losses Ford Credit is taking on off-lease vehicles, it will be necessary for Ford Motor Credit Company to adjust residuals mid-quarter on the following vehicle lines." The memo specifies the Ford F-150 and Super Duty pickups, and the Ford Explorer and Sport Trac SUVs. They're raising lease prices so high customers won't agree to the terms. [NB: We've predicted this de facto exit from leasing for GM.] Last week, Ford revealed that average auction values for 24- and 36-month lease vehicles were down $2.7k and $2.4k each, respectively. In its recent financial statements, FoMoCo wrote-off $2.1b for leasing losses. 

How can Dodge dealers offer trucks for 50 percent off of sticker price, as several have done in the past month? Money from the mother ship. Right now, Chrysler is offering up to $5k – $6k rebates to customers buying a Ram 1500. At the same time, ChryCo's kicking-in up to an additional $9.5k in "dealer incentives." The extra cash is a desperate move to clear th decks before the new Ram arrives; helping dealers to do what's got to be done to sell their moribund Rams without going out of business (ostensibly). So when you see a $35K Ram for $17.5K, Chrysler's subsidizing the bulk of the difference to the dealer. Great for generating dealership traffic, great for bargain hunters. Not so great for Chrysler's finances or future.

The WTF factor out of GM simply knows no bounds. The AP reports Saab's decision to reduce warranties for 2009 and later model year vehicles. Saab already is in a sales tailspin and is losing GMAC lease support. It seems to me that if a vehicle is designed, built and maintained properly there should be very few powertrain failures between the four year, 50,000 mile "new" Saab warranty and the five year, 100,000 mile warranty in effect for 2008 model year vehicles. True enough, most of Saab's competitors offer warranties similar to the new Saab plan… but Saab is very much the underdog is this market and needs some kind of persuasive selling point. Why exactly does ANYONE buy a Saab instead of a Lexus, Infiniti, Acura, Audi, BMW, Mercedes or even Volvo? GM spokesperson Joanne Krell "said lower costs and a more competitive edge over other importers were factors in the decision." Apparently Saab expects a lot of powertrain failures between years four and five, otherwise there wouldn't be much cost savings to be had. As to the "competitive edge", WTF indeed.

By some accounts, the new Australian Ford FG Falcon is a good car. It's said to have earned Ford Australia the right to develop Ford's new global rear wheel-drive (RWD) architecture. Former Lexus driver FoMoCo CEO Alan Mulally claims he covets the G6E Turbo model. So it's selling well, right? In a word: no. The Australian reports that the FG Falcon has "flown into a perfect storm, with high petrol prices and tumbling trade-in values conspiring to slam the brakes on sales of the new large sedan." Though sales are technically up eight percent over last June, Ford has moved only 4k of the new RWD sedan since its launch two months ago. There's been no appreciable bump typically associated with all-new products. Even Ford Australia boss Bill Osborne is worried: "The underlying market for large cars is even weaker than what was on display in June, and that's cause for concern for us." Ford is confident that they can "build momentum" because turbo models weren't available at the launch, but they also won't rule out layoffs or production cutbacks because they "don't know where fuel prices are headed." Anyone want to help them out on that?

Auto Motor und Sport reports on a cautionary study by Bain & Company on the Chinese automotive market. According to the report, automakers estimate that the Chinese market will demand 9.3m new cars in 2010. Nein! "Our study shows that automakers are overestimating the Chinese market and are calling for too much production," says analyst Jörg Gnamm. "We're talking about an overestimation of 1.5m vehicles. That's half of Germany's annual sales, and the production capacity of four to five car factories." In other words, they reckon the Chinese market will grow by "only" about 12 percent per year to 7.9m units. Did  Jörg mention increasing competition for those sales? Yes he did. Volume automakers like Toyota, VW and GM are the ones who will face the toughest pressures. The warning comes shortly after Renault-Nissan CEO Carlos Ghosn predicted that the Chinese market could cool off in the next few years. And it doesn't factor in any Chinese government move to favor home-grown automakers over mandatory joint-venture "foreign partners." On that score, it's only a matter of time…