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

Flex Fueled: The Current Crop

E85 capable vehicles available today.

There is a segment of American drivers who are interested in buying a car capable of running on a strong blend of ethanol and straight gasoline. For them, utilizing a home grown fuel is better than feeding the foreign oil habit, their personal declaration that American energy independence is possible.

Ethanol Ready

All cars built today are able to run on E10 fuel — 10 percent ethanol, 90 percent gasoline; but few can run on E85 fuel — 85 percent ethanol, 15 percent gasoline.

That’s because certain corrosion prevention measures need to be taken to protect the fuel line and gas tank. When in place, placarding in the area of the fuel tank and a notation in the owner’s manual signifies that fueling with E85 is an option.

Oil Dependency

E85 enthusiasts love the fuel for a few other reasons including enjoying a slight boost in performance, low prices where widely available and the support it offers farmers who grow the corn which comprises the fuel. But, there is a loss of fuel efficiency, somewhere between 20-30 percent which makes E85 unattractive for many. And, the fuel is hard to find in areas where corn is not king, diminishing the attraction of E85 further.

For the 2010 model year, a number of vehicles are E85 capable. Let’s take a look at the run down:

Chevrolet — Select Malibus with the 2.4-liter four-cylinder engine paired with a six-speed automatic transmission or 3.5-liter V-6 paired with a four-speed automatic transmission. HHR FWD or Panel FWD with the 2.2-liter four-cylinder engine paired with a five-speed manual or four-speed automatic transmission. Chevrolet Impala equipped with a 3.5-liter or 3.9-liter six-cylinder engine paired with a four-speed automatic transmission. Various Silverado, Avalanche, Tahoe, Express and Suburban models. Lots of Chevrolets! Indeed, Chevrolet claims to have produced 2.5 million FFVs to date.

Ford – Front- and all-wheel-drive Fusion with 3.0L V-6 engine paired with a six-speed automatic transmission.  Ford Escape in 2WD or 4WD with 3.0L V-6 engine paired with a six-speed automatic transmission. Select F-150 and Expedition models.

Chrysler — Sebring hard top sedan and convertible with 2.7-liter V-6 paired with a four-speed automatic transmission. Town & County minivan with 3.3-liter V-6 paired with a four-speed automatic transmission.

Dodge — Avenger with 2.7-liter V-6 paired with a four-speed automatic transmission. Grand Caravan minivan with 3.3-liter V-6 paired with a four-speed automatic transmission. 2WD and 4WD Dakota and Ram pickup trucks outfitted with a 4.7-liter V-8 engine and paired with a five-speed automatic transmission.

Other GM — Buick Lucerne equipped with a 3.9-liter V-6 paired with a four-speed automatic transmission. Numerous GMC models paralleling offerings made by Chevrolet trucks. Various Cadillac Escalade models.

Other Ford — Select Mercury Milan, Mariner and Grand Marquis models. Lincoln Town Car and Navigator.

Foreign Manufacturers — Nissan, Toyota, Mazda and Mercedes models.

FFV vehicles were offered as far back as the early 1990s and new models are being added or existing models subtracted depending on model year. Check with the manufacturer to find out affected models or visit the Environmental Protection Agency list for more information.

New GM Marketing Strategy Begins To Take Shape

Joel Ewanick Joins GM

You need a scorecard to keep track of all of the changes made at General Motors since former president and chief operating officer Rick Wagoner was removed from his position in March 2009. Fritz Henderson took over from Wagoner then forced out in December while Bob Lutz announced and then delayed his retirement, but is now once again winding down his tenure at GM.

Further down the management chain, numerous people have come and gone with some people holding a variety of positions over the past fifteen months.

Docherty Demotion

Susan Docherty has gone from General Manager, Western Region VP for Buick-Pontiac-GMC to heading up marketing sales. A few months back the sales part of her title was taken away and given to Mark Reuss, but now Docherty’s marketing title has also been taken away.

Still employed by GM, a new place in the GM collective is being prepared for Docherty although Ed Whitacre and company have yet to announce what that job will be.

Hyundai Star

The most significant personnel news for GM is the hiring coup scored this week when the automaker wooed Joel Ewanick (pictured) away from Nissan. Ewanick left Hyundai for Nissan in March, shocking automotive analysts by quickly abandoning Nissan in favor of GM mere weeks later.

According to The Wall Street Journal, Ewanick’s three year tenure helped transform the Korean automaker from a backwater brand to a global force. Notably, Ewanick was behind the “Hyundai Assurance Program” introduced during the worst of the recession early in 2009.

Under Hyundai Assurance, customers were given a pledge that if they purchased a car and later lost their jobs, Hyundai would take their car back with no hit to their credit. That move fueled Hyundai sales, helping the automaker increase market share even as its competitors lost 25, 30, even 40 percent or more of their business.

In 2009, Ewanick and Hyundai won numerous marketing awards including the prestigious Advertising Age’s Marketer of the Year award. That recognition increased Ewanick’s stature in the industry leading to the eventual poaching of the marketer from Nissan.

GM Impatience

Ed Whitacre is not patiently waiting for sales to improve at GM. He wants results and he wants to see those results now. Though GM still sells more passenger vehicles than its two strongest rivals, Ford and Toyota, the automaker cannot afford to miss a step as its Chevrolet Cruze line goes into production later this month and for when the Chevrolet Volt goes on sale later this year.

Will Ewanick turn GM around by himself? No, but this move isn’t just about him. Rather, removing Docherty, moving Reuss and Ewanick in place and terminating the services of GM dead wood, Whitacre has signaled that everyone is on a short leash and results is all that matters.

BTW, Joel, please update your LinkedIn profile. It still shows you as VP Marketing for Hyundai.