New car sales in Japan have dropped for the fifth straight year, to their lowest level since 1975. Thomson Financial (via Forbes) cites a Japan Automobile Dealers Association study which points to high gas prices as the prime culprit in recent sales losses. Even Japan's 660cc kei car category is feeling the hurt, dropping for the twelfth straight month. Japanese automakers have been fighting sliding sales aggressively, rolling out new models and pouring money into marketing gimmicks like Toyota's Auto Mall . But there's nowhere to run in such a saturated market. Honda, Nissan, Subaru and Suzuki posted modest sales gains in March, while Lexus dropped nearly 18 percent, Isuzu dropped 12 percent, and Mitsubishi lost nearly 14 percent of sales. The biggest losers? Truck manufacturers, who saw between 12 and 27 percent losses. If economic misery loves company, America and Japan could be best of friends.

Automotive News [sub] reports that the strike at American Axle (AA) will soon claim its 31st and 32nd factories: the Orion and Fairfax plants that manufacture the Chevrolet Malibu and Pontiac G6. "GM is fast running out of an American Axle-supplied knuckle used in the rear suspension of the Malibu and Pontiac G6 sedans, said Mike Dunn, shop chairman of UAW Local 5960. The local represents some 2,900 hourly workers at GM's Orion (Mich.) assembly plant. The plant makes about 1,000 G6 and Malibu sedans per week. Dunn said a shortage of the knuckle also will shut GM's Fairfax assembly plant in Kansas City, Kan., by mid-month." As predicted, the AA strike's impact has spread from GM's slow-selling SUVs and pickups to cash-flow critical cars; the Detroit-Hamtramck assembly plant (Buick Lucerne and Cadillac DTS) stopped operations today. You've got to wonder: is this the bus GM didn't see? And if so, why not?

As the latest GM Death Watch predicted, the GM apologists are getting warmed-up. Note to The Big 2.8's PR departments: hire the Detroit News' headline writer. Better yet, don't. Why risk losing such a public champion? After all, there is no evidence that GM, Ford and Chrysler ARE successfully clinging to their U.S. market share. Or WILL cling. And while you're wondering who to thank for cutting the words "try to" from the headline, it's best to keep scribe Sharon Terlep happy. Ms. T starts, helpfully enough, by moving the goal posts: "But preventing foreign-based rivals from stealing more buyers will be crucial to putting Detroit's automakers in a good position once sales eventually rebound." And then she trots out Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide. "Robinet said GM is likely in the best position to hang on to market share with a string of popular new products such as the Chevrolet Malibu, Cadillac CTS sports sedan and the Buick Enclave crossover." None of which are conquesting transplant buyers or setting the sale charts on fire; all of which are the GM turnaround poster girls. And just because GM may be in the best position relative to Ford and Chrysler doesn't make it a good position relative to say, Toyota. Or Honda. Or Nissan. Or Hyundai. Or Lexus. Or… 

Fact: Jaguar sold 54k cars last year. Fact: Jaguar sold 70k cars in 2006. Fact: Just-auto [via Motor Authority] says Jaguar sales "could potentially double within the next couple of years." How's that? "Forecasts compiled by just-auto map out Jag's production future for its four main models – the X-type, XF, XK and XJ – and foresee volume rising to a more sustainable number closer to the magical 100,000 mark." Sorry, but no fucking way. But wait, there's more! "Possible new models in the Jag product plan, which await the green light from Tata, could further lift this figure towards 150,000 by 2012/2013" The XJ is an albatross and the X-type is the brand's cancerous Achilles Heel. I'm just going to start playing it their way. I'm predicting that Chrysler is going to launch an unspecified new model at some future date and they will sell more cars than Toyota. Like, lots more. In the future. Lamborghini, too. Man, this is fun. Hey Farago, where's my check?

That, my aspiring plug-in friends (2010), is a Hell of a lot of Priora. Nikkei English News [via Bloomberg] reports that Toyota's ramping (amping?) up Prius production at its two Japanese factories to increase overall output by a full 60 percent. ToMoCo's aiming to shift 450k gas – electric hybrids worldwide in '09. No word if and when (not to mention why) Toyota will expand the Prius into its own sub-brand, as rumored on the internets. And the U.S. market for Priora has suddenly gone soft. Although Toyota's sold 181,221 Priora in '07, and the model's up 8.5 percent year-to-date, February sales declined by 10.9 percent. Could we about to see another price cut to move the metal? It sure worked last time.

The United Auto Workers (UAW) strike against American Axle (AA) will claim its second automobile plant next week. In addition to the Cobalt/G5 plant, Automotive News [sub] says the strike threatens GM's Detroit-Hamtramck assembly plant (Buick Lucerns, Cadillac DTS). Buick probably won't mind the shutdown; they're in the same boat as Chevy and GMC with a 100-day supply. Cadillac isn't in quite as good shape, with a 59-day supply of DTS'. Automotive analyst Erich Merkle doesn't think losing a second car plant will be enough to get GM involved in the strike settlement. "It's a little bit of an 'ouch,' but it's certainly something that's survivable. GM could still probably afford to stand on the sidelines a little while longer." While the strike is a relatively inexpensive (and entirely blameless) way for GM to reduce bloated inventories, keep in mind that the American automaker counts a "sale" when a vehicle leaves the factory. When the new quarter starts (April 1), the strike will whack The General's bottom line. That means interceding in the strike, encouraging AA to ramp up offshore production or facing Armageddon. If (and most probably) when production restarts and GM begins channel stuffing replacing inventory, you can bet they'll crow about record production and sales for that quarter. 

In a move sure to annoy potential GT500KR owners– who were banking on the supply – demand equation to protect their $65k-ish (plus premium) investment– Ford has announced they're gonna build more examples than previously announced. The original plan, from the caption of their PR photo: "Featuring classic Shelby KR design cues and Ford Racing performance upgrades, the GT500KR will be produced in a limited-run of 1000 units arriving spring 2008." Ward's Automotive reports the new plan: an additional 746 GTK500Rs. "Of the additional 746 units, 571 will be allocated to U.S. customers, thus equaling the 1,571-unit production run of the original ‘68 Shelby GT500KR." So that's alright then. “I’m glad we can share it with more Mustang enthusiasts,” 'Ole Shel says in a statement. “This car is really special to me and my bank account demonstrates that when Shelby Automobiles gets together with Ford SVT and Ford Racing, we can deliver a Mustang that will compete with the best in the world.” Roush and Saleen would agree, albeit through gritted teeth.

We reported earlier that the smart money is getting out of OEMs and into parts and used sales.  Business Week confirms that while new car sales are tanking, used car sales are on the rise. A Wachovia survey of 40 vehicle retailers shows an increase in used car sales; 28 percent of dealerships indicated that their used car sales were above expectations. Dealers are also reporting greater inventory pressure for used cars, along with greater than expected demand for pre-owned vehicles. Online research companies are also showing significant increases in searches for information about used cars. "Although there was some seasonality, we believe many dealers have lowered their expectations and new car intenders maybe switching to used cars," says Wachovia's Richard M. Kwas in a letter which accompanied the report. "In general, dealers conveyed that prospects are more interested in used vehicles over new." Good news for some, bad news for others.

Saturn is planning on launching a new web-based purchasing scheme which will place even more of the buying process online. The plan is aimed at moving functions like checking dealer inventories, applying for credit and scheduling a test drive to a unified Saturn online platform. Down the road, the website could also be used to handle the evaluation of customers' trade-in vehicles and to negotiate price using online chat and e-mail. Although this last goal is particularly strange given Saturn's "No Haggle" pricing. Of course, this program is not being pitched as "the end of the Saturn dealership," although Edmunds AutoObserver notes that it came out of efforts aimed at "developing the Internet as a tool that might someday enable them to eliminate the middleman entirely." Since these efforts were thwarted by legal concerns, Saturn will just be centralizing a few online capabilities which most dealers already offer. At enormous expense.

Not that the average American Lexus buyer could give a damn, but Toyota's luxury division has singularly failed to gain traction outside the U.S. market. Which is exactly the point: Americans are far less bothered by issues of provenance (i.e. or lack thereof) than any other developed automotive market. Business Week reports that the analysis applies to Lexus' home turf. "When Toyota (TM) introduced its Lexus brand in Japan three years ago, the company was hoping drivers like Masayoshi Haku would swoon over the luxury lineup. The 46-year-old doctor is a car lover with a $110,000 BMW 750 sedan and a $60,000 Porsche Boxster, so he should have been a prime customer for Lexus. But Haku hasn't taken the bait. Why? Lexus is too Japanese for his tastes… 'Foreign brands have more individuality.'" Sales reflect this non-import bias; Lexus sold just 34,800 cars in Japan last year. As Biz Week points out, Lexus did itself no favors with its initial lineup, featuring "the $52,000 GS sports sedan, the $68,000 SC convertible, and the entry-level IS sedan, starting at about $40,000. All three had previously been available in Japan under the Toyota nameplate— for about 20% less than the Lexus models." Oops. [thanks to stalightmica for the link]

The Financial Post reports that car prices in Canada have plummeted 6.8 percent last month, the biggest drop since 1956. The number comes from Statistics Canada's February inflation report, which reportedly shocked even the economists who collect the data. Vic Singh, chief economist at the Canadian Auto Dealers Association explains the phenomenon as an "accumulation of several months of falling prices, as the soaring Canadian dollar forces auto dealers to cut sticker prices in an effort to keep consumers from heading south of the border to get a better deal." A strong Canadian dollar, aggressive manufacturer incentives and increased demand for compact cars are also cited as reasons for the sharp downturn in prices. Of course, good old Econ 101 analysis indicates that this is what the textbooks call market self-correction, as Canucks have been paying high premiums on their vehicles for years compared to their American neighbors despite the strong loonie. Check out a slideshow comparing prices in  Canada vs. US in November, 2007 here to see what we're talking about.

Speaking at the Morgan Stanley Global Automotive Conference in New York, Ford CEO Alan Mulally confident predicted that Ford's global rationalization (i.e. same vehicles, different wrappers) will allow the embattled automaker to make money on its small cars in the American market (providing they sell enough of them). The AP [via The Houston Chronicle] reports that Big Al told the assembled throngs he'd been surprised (surprised I tell you) by the complexity of Ford's assembly process. "For instance, the Lincoln Navigator large sport utility vehicle had 128 possible console combinations," roughly one per customer [kidding, I think]. Since taking the reins, Ford has reduced complexity by "up to 80 percent" on "some" models. "You can imagine what that means to the cost structure worldwide," he told the analysts, who tend to prefer hard numbers to vague assurances. Still, Mulally confidently predicted– well "hopes"– his employer will equip 500k vehicles per year with EcoBoost engines by 2013. "It's absolutely going to be a competitive advantage," Mulally asserted. Meanwhile, FoMoCo's CEO conceded that "Ford's market share in trucks and sport utility vehicles has slipped recently, which he attributed to competition." So now you tell us.

As the American Axle strike stretches into its fourth week, GM still maintains it's not affecting them. Not that they'll admit, anyway. With truck sales (real trucks, not them sissified half-breed crossover things) down 20 percent last month, they've weathered the storm pretty well with what they had on hand when the strike started. As the strike progresses and the inventory starts getting picked over, they're going to start feeling some pain as buyers look elsewhere for their $50k crew-cab, long-wheelbase, four-wheel-drive, six liter commuter vehicles. Since The General counts a "sale" when they ship a vehicle to a dealer, this quarter's sales will look really bad (but they'll have the strike to blame it on). Once production resumes and they start stuffing the supply channels again, you can bet GM'll be bragging about their best truck sales in years. But now CNNMoney reports Standard & Poors placed GM's ratings (as well as those of American Axle, Lear and Tenneco) on "creditwatch with negative implications" because they "believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker." I wonder how Rick Wagoner will spin that one!

Previously, on "this is going to get really bad," analysts had predicted that the U.S. new car market in '08 would crater to 15.7m units. According to Dealer magazine, J.D. Power's mob have had another look at the situation and shaved another 800k units from the annual sales forecast. J.D. reckons the industry will only shift 14.95m "light vehicles" (cars, SUVs, minivans, etc.) this year. To put that in perspective, U.S. dealers moved some 16.15m light vehicles in 2007; down 2.5 percent from 16.56m in 2006. Or, less statistically, "New-vehicle sales in 2008 are expected to reach their lowest levels since 1994." J.D.'s executive director of automotive forecasting says the trend established in the last two months is a sign of things to come– only more so. "While the automotive industry's slow performance in January and February certainly contributes to the anticipated drop in new-vehicle sales," Jeff Schuster warned. "Declining consumer confidence and spending, as well as turbulent financial and economic market conditions, are primarily driving the decline." The good news: J.D. is predicting a "slow rebound" in auto sales during the second half of '09 into '10. The bad news: they could be wrong.