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General Motors’ March Sales Up 21%

For first time, GM’s incentives below industry average.

by on Apr.01, 2010

Dealers for General Motors delivered 189,000 vehicles during March of 2010, up 21% from March of 2009. Total combined sales for GM’s Chevrolet, Buick, GMC and Cadillac brands in the U.S. were 185,406, up 34% from February.

Combined Total and Retail sales for Chevrolet, Buick, GMC and Cadillac have increased year-over-year for six straight months. Inventory is half of what it was a year ago, and 94% of it is  comprised of current models, a much healthier level than at any time in the recent past.

In a more important development for taxpayer owners, GM’s incentive costs dropped below the industry average for the first time in history according to J.D. Power figures. GM spent on average $2800 for incentives this March, down $2,000 from March of 2009 when it was insolvent and its future was in doubt. Six new relatively hot products contributed significantly to this improvement.

The average transaction price for the four brands is up $4,200 year-over-year, and according to Susan Docherty, vice president of marketing, is $4,000 higher than an unspecified industry average.

It is too early to tell if GM was able to increase its market share, an important indicator of its ability to grow, which is key to its ability to return to profitability and pay off its taxpayer loans.

Chart follows. (more…)

March New Vehicle Retail Sales on Rebound

Both retail and fleet sales are projected to improve from February. Incentive war looming because of Toyota?

by on Mar.19, 2010

U.S. Retail SAAR from January 2009 to March 2010, in millions of units.

New-vehicle buyers are returning to dealer showrooms so far in March, lured by huge incentives, after Toyota recall news and bad weather kept them away in February.

March new-vehicle retail sales are projected to increase by 25%, compared with the same period one year ago, according to J.D. Power and Associates, based on transaction data from more than 8,900 dealers.

Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles, according to Power.

Most manufacturers’ retail sales are up so far in March, with Toyota, Ford and VW leading the major makers.  Toyota appears to be rebounding – in both sales and market share – to its late 2009 levels.

March new-vehicle retail sales are expected to come in at 883,300 units, which represent a seasonally adjusted annualized rate (SAAR) of 9.9 million units. This reflects a retail SAAR increase of nearly 2 million units, compared with February 2010. Compared with March 2009, retail sales are projected to increase by 2.3 million units.

“New-vehicle retail sales increased robustly during the first half of March, and are expected to remain strong throughout the remainder of the month—setting the industry recovery back on track,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates.

“March sales could outperform projections if the pace does not level off as expected for the remainder of the month. However, there is some risk that the incentives offered by Toyota could spark an incentive war among several automakers. While this may lead to a temporary increase in sales momentum, it could also potentially slow the pace of long-term recovery.”   (more…)

U.S. Feb Sales Shuffle: Ford leads GM, Toyota Third

Better than expected month, in spite of snowstorms and recalls.

by on Mar.03, 2010

Click on the chart to enlarge it.

U.S. light vehicle sales in February were better than analysts had predicted, and a definite improvement compared with a year ago, but the industry remains adrift with no end to the Great Recession in sight.

With total sales of 780,000 vehicles, up 13% from a year ago, the seasonally adjusted annual  selling  rate came in at just over 10 million units, far, far below the halcyon days of 15-17 million units that the industry grew fat on just a few years ago.

The snowstorms in my view affected the major makers equally. And in the face of this chilling weather Ford, General Motors, Nissan, Honda, Hyundai and BMW — achieved double-digit percentage growth when compared with a dreadful February 2009.

The big news was that Ford Motor Company – helped by resurgence in passenger car and fleet sales – just edged out GM by fewer than 500 units to move into the Number One spot for the first month since August of 1998, when GM was closed by a bitter UAW strike. GM, in its thus far unsuccessful quest for profitability, had trimmed incentives, especially on its pickup trucks.

The real titleholder is debatable. When the final numbers were tallied last night, it emerged that rounding to 142,000 vehicle sales for each means a dead tie. And one month does not a sales race make. Moreover, I am reminded of the advice of the all too rare one-handed economist – use quarterly data to make trends clearer and eliminate monthly noise. Surely, this applies here.

Still, this is a momentum business.  GM with yet another North American reorganization, split sales and marketing management responsibility, in the process eliminating the once powerful, Baron-like divisional manager positions. It is a recognition by post-bankruptcy management that GM remains severely wounded and has a steep climb in front of it. Mark Reuss, GM North America president, put it succinctly yesterday. “GM was not moving forward fast enough or with enough success.” He also promised that his starting lineup is now finally in place for the duration. (Click Here)

While a cursory analysis led writers of some of the early stories to portray a 9% decline at Toyota Motor Sales as an unmitigated disaster, they ignored several mitigating  aspects. Not least, of course, was the “stop sale” of its most popular products because of accelerator pedal recalls at the beginning of the month. This will not apply to March sales numbers when they come in. In fact, it is amazing to me Toyota in the face of unrelenting media criticism, and with its dealerships overwhelmed with recalled cars, that Toyota sold as many vehicles as it did. (Click Here) Nonetheless, Toyota’s year-to-date numbers -  with a -22% total swing to the negative in sales, and a drop of almost three percentage points in share – are awful.

In response, Toyota also put in place record levels of incentives late yesterday, which will continue through April 5. These include no interest rate financing, as well as low lease rates.  (Click Here) If Toyota with its large and still largely loyal owner body starts to turn things around, other automakers will be forced to counter, despite early assurances from executives that they would not.

One potent weapon deployed by Toyota, which makes competitive bean counters blanch, is two-years of free maintenance for returning  buyers. We await replies from the marketing executives at Ford, GM and Chrysler about this. No one is going to follow willingly this one.

However, the fact that Toyota did not extend its warranty, as was widely – and erroneously- speculated in mainstream auto media, says something. The question is what: Are longer warranties not an effective marketing tool, or, more worrisome for Toyota and its future buyers – the quality emperor might truly have no clothes?

Analysis from Data!

Companies to watch after the new Big Three of Ford, GM and Toyota, include Number Four Chrysler, which at 84,000 units is just treading water, and with dim short-term prospects due to the lack of fresh product.

Looking much, much stronger are Number Five Honda and Nissan at Six, which is now only 10,000 units behind it. Both could easily surpass Chrysler later this year if their trends hold. Honda’s Accord outsold the Camry as it became the second best selling vehicle behind the Ford F150 pickup.

Other runners, much farther back in the pack, to keep an eye on include Hyundai, Volkswagen and Subaru, all of whom are posting strong sales gains on admittedly small bases.

Chart Follows:   (more…)

Ford Motor Sales Flat in November

Modest gains for cars at Volvo and Ford brands canceled by the ongoing collapse of trucks and SUVs, and a 20% drop at Lincoln.

by on Dec.01, 2009

A basic family car is a winner for Ford.

A basic family car is a winner for Ford.

Ford Motor Company reported today that November sales were even when compared with 2008. While car sales were up 14% and crossovers were up 26% for the month, total sales of 118,536, equaled year-ago levels.

Significant drops averaging -20% in sport utility, truck and van segments, where Ford is still heavily invested, essentially canceled the crossover and car increases.

In bright spots, Ford Fusion set a full year sales record, year-to-date 2009 sales are 161,819. The previous full-year record, set in 2007, was 149,552.

Other Ford, Lincoln and Mercury cars posting increases included Ford Focus (+24%) and Mercury Milan (+40%).

However, Lincoln sales dropped 20% from year ago levels, led by a stunning decrease of 69% for the aging Town Car to 454 vehicles compared with 1,454. The MKS was off 27% and the Navigator dropped 20% compared to what were already depressed levels a year ago.


November U.S. Vehicle Sales Down

More of same doldrums predicted as market languishes.

by on Nov.19, 2009

November new-vehicle retail sales are expected to decline compared with one year ago, according to J.D. Power and Associates, which gathers real-time transaction data from more than 8,900 new car dealers across the United States.

November new-vehicle retail sales are expected to come in at 547,800 units. This represents a seasonally adjusted selling rate (SAAR) – take a deep breath — of 8.2 million units. Total sales for November are projected to come in at 687,800 units, up 0.4% from November 2008, with fleet volume expected to increase by 3.5% from one year ago. Automakers and dealers continue to be punished by the ongoing Great Recession and a jobless recovery.

Latest Score Good or...

Latest Scores Good or...

The latest prediction confirms the cautious attitude of most industry executives, who while trying to talk the market up, are extremely conservative in their private statements to media, as well as with their production scheduling. As always, follow the actions of corporations not their pronouncements.

Severely depressed sales would normally be good news for consumers, as it would prompt higher incentives, thereby decreasing prices.

However, the drastic cutbacks in production and factory closings that have occurred during the past several years and loss hundreds upon hundreds of thousands of autoworkers’ jobs has changed the old marketing equation. Inventories are now being tightly controlled, and the amount of incentives is decreasing as most makers try to bolster bottom lines by increasing prices.


Ford Motor Slowly Recovering Share in Europe

With GM’s Opel in disarray, Ford is gaining ground.

by on Oct.13, 2009

With one of is principal competitors, Opel-Vauxhall, in the midst of a corporate transformation, Ford of Europe increased market share to 10.1% in September; its best share for any month since September 2001. It is now the number two automaker in Europe.

It remains unclear if the company, which posted record losses in 2008, is returning to profitable operations since Ford has not changed its guidance to analysts during its second quarter earning results press conference, which said it would continue to lose money this year.

Still, year-to-date Ford’s share in the so called Euro 19 markets is just over 9% — the best performance in a decade.

Volkswagen by far remains the dominate producer in Europe. VW Group was in the black during Q2 to the surprise of some analysts. This  positive result came from strong performances by the VW brand in Brazil (+7%) and China (+23 %), now VW’s largest market. Financial results were also good for the first half of 2009 as the Group made a €1.2 billion operating profit. VW’s global market share is now 12%, which makes it number two in a close race with Toyota.

Overall, Ford of Europe sold 152,600 new vehicles in its 19 main markets in September, a gain of 12.3% over the same month a year ago, and better than the industry increase of 2.9%. Ford has now reported year-over-year sales gains for four months in a row, and small market share increases for nine consecutive months.

The Euro 19 markets are: Austria, Belgium, Britain, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland. Ford reports sales for Estonia, Latvia and Lithuania through its Finnish National Sales Company, so sales data for the Baltic States is included within Euro 19.


U.S. August Sales Results

Full and final sales results for a wild taxpayer funded month.

by on Sep.02, 2009

Now what?

Now what?

In our monthly Joe Friday “just the facts” section we present the final results for U.S. light vehicle sales for the month of August 2009. With a seasonally adjusted annual selling rate (SAAR) of just over 14 million it was by far the strongest month of the year.

The 40% increase was almost all attributable to taxpayer money under the CARS — Clunkers — program, which handed out up to $4,500 rebates — tax free — to the purchase of a new vehicle with no matching funds required from automakers who stood to gain the most from it.

Small car sales were up. Truck sales were down. Luxury makers languished.

Some makers did add incentives, notably Chrysler which doubled the government match on some vehicles to what appears to be little positive effect.

Get Results!

Get Results!

The big question remains what happens in September? Our dealer friends are reporting that their showroom traffic died after the frenzy caused by Clunkers  expired.

The results are in the chart below.