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

Ford Adjusts Incentive Program For Summer Season

Shopping for a new car these days means that consumers have a lot of choices on what they can buy and how much they’ll pay for their purchases. Because of the current economic doldrums, the market definitely favors consumers as manufacturers battle to increase sales while retaining market share.

Drive The Ford Difference

Although auto sales dropped by just over 24% for May 2009 (v. May 2008), Ford still managed to gain market share as its chief competitors (General Motors, Toyota, Honda, Chrysler and Nissan) each reported sharper declines than Ford. May 2009 sales were up over April sales too, the fourth consecutive month that Ford has seen its sales rise this year.

But, Ford isn’t resting on its modest laurels, seeing that current conditions mean an excellent opportunity for the automaker to pick up market share. With the Ford Taurus and Ford Transit Connect due out this month and with the Lincoln MKT arriving later this summer along with an EcoBoost version of the Lincoln MKS, Ford plans to continue providing the help customers need today in order to choose a Ford, Lincoln or Mercury product.

“We continue to introduce world class products into the marketplace and are committed to restoring that much needed confidence for the consumer through our Drive the Ford Difference event,” said Kenneth M. Czubay, Vice President of Sales and Marketing. “Our quality is unsurpassed by the best in the business and we remain focused on being the best or among the best in fuel economy with every new product introduced into the market.”

Ford’s current incentives are as follows:

• Through the end of June, Ford will cover up to 3 months worth of payments on select new Ford, Lincoln and Mercury vehicles.

• 0 percent financing is also offered through Ford Motor Credit on select Ford, Lincoln and Mercury vehicles.

• Ford continues its partnership with Susan G. Komen for the Cure® and will donate $20 in the name of each prospective customer that test drives a Ford, Lincoln or Mercury vehicle, up to $1 million.

Customers will also be able to find additional incentives on various cars, trucks, crossovers and other passenger vehicles at the dealership level. If you’re planning to buy a new car this summer, make sure that you find out what programs you are eligible for and sharpen your negotiation skills. Most analysts believe that 2009 will be a once in a lifetime buying opportunity for consumers, so make sure that you take advantage of special offers while they’re still available to you.

Source: Ford Motor Company

In An Unusual Move, Toyota Offers Big Incentives To New Car Buyers

When it comes to automakers and incentives, names such as Ford, Chrysler, General Motors, Hyundai, Mitsubishi, and Volkswagen are frequently mentioned, car companies who typically need some help moving their many different models. Honda and Toyota are at the opposite side of the spectrum, offering few if any discounts or financing incentives to clear inventory. Until now.

Incentives On Eleven Models

In a break with past practice, Toyota is now offering financing incentives on eleven different models, vehicles which all sport the Toyota badge. Not included in the mix were the company’s Scion and Lexus models, at least for now. Also absent from the offer were a pair of hot sellers: the subcompact Yaris and the hybrid Prius.

The financing incentives being offered by Toyota is for loan terms ranging from 36 to 60 months with zero percent interest. The Toyota models qualifying for this offer are: Matrix, Corolla, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra. Put into place earlier this month, the financing deal runs through November 3rd.

Clearing Inventory and New Vehicle Financing

“Not only do we have the inventory of today’s sought after fuel-efficient models, but we have the capacity through Toyota Financial Services to finance or lease them,” said Toyota Division General Manager Bob Carter.

And, it is the financial arm of the automaker that is being tapped to provide the deal to Toyota customers. As other automakers struggle to hold onto market share and provide the funds necessary to hold loans or offer leases, Toyota Financial finds itself sitting on a heap of cash, ready to step in to make this unprecedented offer.

Other Manufacturers Are Joining In

Toyota isn’t alone feeling the frigid breeze of a sales slump. Across the board average sales slumped by 26.6% in September 2008 over the same period a year earlier, with most manufacturers experiencing a double digit sales decline year to date. Just recently, GM ended its “employee pricing” initiative, but has replaced it with cash back and/or zero percent financing on a number of its own models too.

Chrysler recently raised prices for 2009 models, but discounts on most vehicles will cancel out those gains. Ford, Volkswagen, Suzuki, Mazda, Kia, and Nissan have each been offering incentives lately, offers which will only continue to grow as the year comes to a close.

So, although the Toyota move is certainly an unusual one, business certainly isn’t necessitating strong action on the part of the world’s top volume automaker.