As Expected, August 2010 Auto Sales Sink

All throughout the month of August, reports that the month’s auto sales would plunge surfaced time and again. This reporting was wholly unnecessary or at least overdone as an obvious factor was kicking in: August 2009 was “Cash For Clunkers” time, therefore any comparison with last year would be skewed by that federal government rebate program.

But, comparing month over month figures is how the industry rises and falls even when the numbers are skewed. One of the first to issue their sales report was Volkswagen who cut to the chase in the title of their news release: year to date sales are up by 21 percent. On closer scrutiny, Volkswagen revealed that monthly sales fell by 7.9 percent over August 2009.

Monthly Losers

Nissan went straight to the point with their news: sales fell 27 percent for the month although year to date sales are still up by 14 percent. Honda sales fell by 30 percent, but the Japanese automaker says that it is still ahead of last year’s pace though that lead narrowed to just 1.5 percent.

Toyota sales dropped by 31 percent which means that the world’s largest automaker has fallen behind last year’s year-to-date pace by 6,000 units. Blame all the recalls and bad publicity with having a net drain on Toyota whose position as the world’s largest automaker is in jeopardy regardless. Volkswagen, perhaps even GM, may unseat Toyota this year.

Fab 3

How did 2009′s winners do in August? That would be Subaru, Hyundai and Kia, the only automakers who saw their sales rise in a very depressed market.

Subaru’s sales fell by 22 percent, but they’re still up by 20 percent for the year. Hyundai reported that its sales fell by 11 percent, yet the Korean automaker is still up by 17 percent for the year and on pace to establish yet another sales record. Kia, Hyundai’s cousin, registered a 20 percent decline for the month, but they’re still up by nearly 10 percent year to date.

Detroit 3

The Detroit 3 reported mixed sales results with Chrysler sales increasing by 7 percent for the month and are now up by 10 percent for the year. Chrysler’s rise wasn’t a surprise as it basically had to sit out of  last year’s incentive programs as it recovered from bankruptcy and sought to restart production.

GM sales fell by 11 percent for its four surviving brands though the largest domestic automaker is still up by 5.4 percent for the year. Ford sales also fell by 11 percent, but the automaker is still up 18 percent for the year.

The Rest

Daimler reported sales up by 7.4 percent for the month, though when breaking things out by brand Mercedes was up 10 percent while Smart fell by 72 percent. Mercedes is capitalizing on Lexus’ woes and may regain the top luxury marque spot from its Japanese nemesis this year.

The BMW Group fell by 1.6 percent but is up 5.6 percent for the year. Mazda fell by nearly 26 percent, but they’re up by 7 percent year to date. Other manufacturers were still tabulating their figures when Auto Trends went to press with this article.

The Meaning

What does August 2010′s sales mean? Not a whole lot. Cash for Clunkers was a hard month to go up against, so a significant drop was expected. Going forward, a stale economy may keep sales down for the rest of the year, underscoring that the battered American consumer will be careful when and if they buy a car this year.

Sources: Automaker News Releases

Auto Trends We’re Following

What’s in the news?

The summer months are supposed to be fairly quiet when it comes to developing auto industry news stories, but there is enough happening this summer to keep everyone’s eyes focused.

This time last year the federal CARS or “cash for clunkers” program was heating up, introduced on July 24 and offering an artificial surge in car sales. In 2009, billions of dollars of taxpayer monies were being directed to an industry already benefiting from tens of billions of dollars in bail out bucks and other relief. What good the program did is a matter of debate, but know this: there is no desire on the part of most politicians to bring it back.

Here are some of the auto trends we’re currently following:

• The 2011 Cadillac CTS Coupe is in production and the first cars have left the factory floor and are enroute to Cadillac dealerships. This model will expand the CTS portfolio which now includes a sedan, sport wagon, the coupe and V-Series versions of the sedan and soon the wagon and coupe.

• Toyota knew about engine problems with its Lexus models as far back as 2007, but didn’t issue a recall until July 1 this year.  Automotive News reports that the first customer complaints for affected Lexus models dates to March 2007, when Japanese customers complained about defective valve springs.

• Not much has been said about Ford’s sale of Volvo to Geely in recent months, but that is beginning to change. The Wall Street Journal shared a statement from the EU’s antitrust body which said, “The Commission concluded that the transaction wouldn’t significantly impede effective competition.” Expect that Ford to conclude the deal sometime this summer.

• How will Chrysler handle the sale of the Fiat brand in America? That is a good question, one that has remained unanswered even as the Fiat 500 is being prepared for its stateside debut later this year. The Kenosha News reports that Chrysler dealers are receiving packets outlining what is required of them to be considered for Fiat dealerships. Chrysler, 20 percent owned by Fiat, will be establishing 200 dealerships in hopes of selling 50,000 Fiats annually.

• Will the Detroit 3 survive? Some people are still asking that question although Ford’s position is by far the brightest of all three. GM appears to have stabilized and even Chrysler is enjoying a boost thanks to its recently released 2011 Jeep Grand Cherokee.  The Detroit Free Press says that all three automakers appear to be able to ride out the current economic storm.

That’s it for today…new stories shared as we discover them!

December 2009 Sales Increase Likely

When the December selling period for US car sales comes to a close on January 4, 2010, there should be some good news to report. In fact, if J.D. Power and Associates projections are correct, a 7 percent month over month gain is possible. The company is a global marketing information services business whose services include market research, customer satisfaction, and forecasting.

Cash For Clunkers

Keep in mind that December 2008 was one of the worst months for car sales over the past few years. Sales cratered as the full brunt of the recession was being felt with consumers clamping their wallets and pocketbooks shut. For most of 2009 sales were truly abysmal, but they began to pick up again following the summer’s CARS or cash for clunkers program.

“The market is continuing to improve, with the relative strength of December sales supporting a year-end rally,” said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. “The December selling rate is tracking at 11.2 million units-up nearly 1 million units from one year ago-which sets up 2010 for further recovery.”

If these prediction ring true then December could be the turning point that automakers have been seeking. Sales began to dip in late 2007 and continued to drop off in 2008, before collapsing following the financial crisis of September 2008. Most analysts believe that the low point was reached in March 2009, with a gradual recovery beginning soon thereafter.

A Brighter 2010

Total sales should hit 10.4 million units for the year, with 8.7 million units being retail sales. The difference, of course, is fleet sales. For 2011, J.D. Power and Associates believes automakers will sell 11.5 million units, a far cry from the 17 million units sold earlier this decade, but a market improvement over 2008 and 2009.

Importantly, automakers are learning how to turn a profit with fewer vehicles sold by reducing incentives and upping content. That can help sustain automakers in the years ahead as consumers carefully weigh jumping back into the market.

Source: J.D. Power and Associates

Photo Credit: Chrysler Group, LLC