In a market trending down, as darker and darker clouds gather on the economic horizon, it is telling – not to mention entertaining – to see how the US auto industry’s spinmeisters comment on the monthly sales results.
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Actual numbers cited each month by the various interested parties usually vary a bit depending on how they’re segmented and crunched, and whether the variable number of available selling days month by month is factored into the statistics (eg WardsAuto, Reuters) or not (eg The Associated Press [AP]). There were 26 sales days last month compared with 28 in March 2007, AP said.
But there was no sugar-coating the bald March facts – WardsAuto.com calculated total industry light vehicle sales off 5.3% to 1,351,864 for March with cars down 1.7% to 583,780 units while ‘light trucks’ (mostly pickups and SUVs/crossovers but not unknown to include the likes of Chrysler’s PT Cruiser) were down a hefty 11.5% to 688,084.
Domestics v imports
Wards also splits the numbers into domestics and imports (ie foreign-owned brands, rather than overseas-made units). And there was more to furrow brows in Detroit last month: domestic cars off 0.6% to 455,360 units while imports picked up 6.7% to 228,420; US light truck sales fell 12%(!) to 553,715 while domestics were off a lesser 9% to 114,369.
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By GlobalDataQ1
Now the first quarter is under the belt, the Q1 YTD numbers are showing clear(er) trends: Wards says total light vehicle sales are down 8.1% to 3,562,680 (suggesting recent estimates of a full year as low as 14.5m units were about right).
Cars are off 3.2% to 1,742,300 and trucks, no surprise, down 12.3% to 1,820,380. Domestic and import car sales falls are only 0.1% apart at 3.1 and 3.2% respectively, but the domestic truck slump leads imports 13% to 9.2%.
Brands – Detroit
How individual brands fared last month gets interesting depending on who crunched the data. AP reckons Ford sales were off 14% while, significantly, Toyota’s fell 10% and Honda’s 3%. But WardsAuto.com, factoring in that daily selling rate, says Ford was off only 7.4% and Toyota 3.4%, while Honda posted a 4.2% rise. As the Americans like to say: “Go figure.”
We’ll go with the Wards numbers: Chrysler was down 13.5% to 165,851 in March and off 15.8% to 452,414 YTD; General Motors off 12.5% to 280,834 (March) and –10.9% to 800,682 (YTD); Ford 7.4% down to 222,123 last month and –7.4% to 569,379 in Q1.
Imports
Key imports? Toyota’s March sales again trounced Chrysler (off 3.4% to 217,730) and were off 5.6% to 571,748 YTD; Honda was up 4.2% to 138,734 in March and off only 0.4% to 352,642 YTD and Nissan was up 3.6% to 106,950 last month and down 3.3% to 269,801 for the first quarter.
And, apart from Porsche (off 19% to 2,467) the Germans did well in March and are faring OK YTD: Volkswagen up 17.4% to 27,574 last month and off 0.3% to 71,111 YTD; Daimler up 12.4% to 22,556 in March and up 9.2% to 61,154 YTD while BMW boosted March sales 1.8% to 27,404 and is off 9.2% to 68,529 for the year so far. Porsche is down 17.6% to 6,777.
The spin – Ford
The way the automakers spun the March results was interesting. Ford, unusually, issued a press statement with sound bites from in-house sales analyst George Pipas.
“Although Ford Motor Company’s total sales in March were down 14%, both the Focus and Edge were the highlights of March,” Pipas said, adding the redesigned Focus and new Edge crossover “are more than holding their own in a difficult economy”.
Then the emphasis switched. “They (Edge and Focus) are out-performing a really strong small car market. Now the Focus, redesigned and equipped with [new] features… is gaining share in the small car market and its sales are up six months in a row and [on] a year-to-date basis is up well over 30% at the retail level,” Pipas added.
Having the right car at the right time is crucial for the future of Ford, he said. “So we’re really pleased with the performance. We’re really getting ourselves back into the small car market which is very, very crucial because that’s going to be a growth market not only this year, but in years to come.”
NAFTA-region small car production expansion – before the end of the decade – also got a mention. As we’ve reported previously, the Verve global concept car shown at Detroit will revive the Fiesta nameplate in the United States after a 20-year absence and, Pipas was keen to stress, will “add to our presence in this really important lineup because that’s the segment where a lot of the first time buyers go”.
Pipas said first time buyers are crucial to Ford’s growth “which is why this segment is so important in the long run to the company. If we don’t get the first time buyer, that means they go somewhere else and they’re more likely to stay there. So we feel like our product line up is fully competitive, our quality has improved to the point even recognised by third parties as worthy of consideration. Now, if we can get that consideration and translate that to many purchases over the buyers life-cycle, that’s really an important step for our ultimate goal which is to achieve growth.”
Noting that Edge retail sales were up 35% in March with 10% of that growth coming from outside the Midwest truck/SUV stronghold, Pipas said Ford is seeing stronger sales growth in coastal areas: “In California and the northeast sales are up over double a year ago and that compares to the national of 50% increase growth.”
Chrysler
Chrysler vice chairman and president Jim Press stayed off the numbers as well he might with March sales down 13.5% and volume off 15.5% YTD: “We are in a period where the public hears news about the economy every day and it is clearly having an impact on our industry,” he said in a statement. “At the same time, this market environment is driving more customers to our newest value-oriented, fuel-efficient products…”
Chrysler calculated its own March sales at 166,386, down 19%, vs Wards’ adjusted figure of 165,851 and –13.5%.
Chrysler also emailed auto journalists comments by North American sales chief Steven Landry first published on its Firehouse weblog.
“The market is tough right now for certain vehicles, especially pickup trucks, and we have reduced our daily rental fleet sales, which make our sales numbers lower,” said Landry. “However, cutting daily rental sales keeps the residual values on our vehicles higher, and that’s added value that our customers appreciate.
“The overall economic situation is causing many consumers, at all manufacturers, to either delay purchases, or shift to a different vehicle segment, but to one where we have new products,” Landry added. “That segment shift is especially true with pickups. But we’re pleased with the consumer response to our many new vehicles, especially our new minivans, compact vehicles and mid-size sedans.”
Imports
Dick Colliver, executive vice president of American Honda took a similar stay-off-the-numbers approach in his official comment:”The Honda product portfolio is adapting well to the current direction of the marketplace,” he said. “People are clearly being more strategic with their money as parts of the economy seek balance and other parts adjust to record-high gasoline prices.”
“The weakening economy is causing a ripple effect that’s hurting all industries, including automotive,” said Mazda North America president and CEO Jim O’Sullivan. “As we close our fiscal year, I can look back and say it was a successful one for [us] from a sales and product perspective.
“With the record sales we had last March, we knew this month was going to be tough – now we need to focus on moving forward, keeping our heads down, and remembering that the car business isn’t a sprint, it’s a marathon.”
“We are very encouraged by our March results, especially considering the challenging market we are in,” said Hyundai Motor America’s vice president of national sales Dave Zuchowski.
According to Wards, the Korean brand, now making its Sonata and Santa Fe models in a ‘greenfield’ plant in Alabama, boosted volume 9.8% to 42,796 though Q1 sales were off 8.5% to 95,338. “Our redesigned Sonata posted a solid seven percent increase over a year ago, while Accent, Elantra and Azera all saw double-digit growth compared with March of last year,” added Zuchowski.
“We are cautiously optimistic and feel our brand is very well positioned to respond to the emerging spring selling season.”
BMW’s US unit said March results reflected its “expectations for the month”.
“As planned and already communicated, BMW of North America expects a stronger increase in sales in the second half of the year. Sales will be driven by new products coming to market this year.”
A “minority of one”
Perhaps the final word should be given to veteran US auto columnist Jerry Flint writing for Forbes.com this week.
“It is amazing. Unemployment is still relatively low. Farm prices are at record levels, the economy is not growing fast, but there is little evidence that it is in sharp decline. Still, every bit of financial news gets a negative twist. According to the media, falling unemployment is bad news, because it means people have given up looking for work. A pickup in home sales is worrisome because it means prices are still falling,” he begins.
“The estimates of auto sales this year keep sliding, too. Instead of earlier forecasts of 16m units in the US, many estimates have fallen from 15.7m to 15.5m. I have even seen estimates below 15m. Personally, I still think that the industry can sell more than 16m units, similar to what it did last year, but I am clearly a minority of one.”
Later, he notes: “I say that if it is a lousy year, it is not because of the cars. I have just returned from the New York auto show, and can say with certainty that if this year is a flop, it is not the fault of the car companies. They have the right stuff.”
Graeme Roberts
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