August was a tough month for automakers in the United States. Disappointing economic results, a devastating hurricane in Florida and two fewer selling days hurt sales volumes, which were not only 12.4% lower than last August’s numbers, but lower than any month since April this year.
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The slump left the US light vehicle market just 0.2% ahead of the first eight months of 2003.
Adjusting the figures for the shortened month takes some of the sting out of the results, but that may be cold comfort for the car companies as most of the major brands reported sales declines.
Ward’s Auto reported that Americans bought 1.424 million light vehicles in August, down 5.6% from 2003 and the market’s second-poorest showing this year. Even traditionally strong performers like Toyota and Honda missed their marks. Of all the Japanese brands, only Nissan and Suzuki showed improvement and Suzuki’s growth came solely from its rebadged GM Daewoo-built models.
Mazda, Mitsubishi and Subaru all had double-digit sales drops.
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By GlobalDataBut August was not all doom and gloom. Both Volvo and Honda’s premium Acura brand set new August sales records while BMW, Lexus, Mercedes and Porsche joined Nissan and Suzuki in reporting higher sales.
Chrysler was the only American brand to beat its 2003 record, up 1% on continuing strong sales of its new 300 sedan line, which carried the Chrysler brand to a new August sales record. Things weren’t so good at Dodge, where sales of the Ram pickup have dropped to the point that year-to-date (YTD) sales are 2% behind the same period last year.
Even the new Durango SUV, which had been one of Dodge’s hottest models, missed its August 2003’s numbers by 10%, adjusted for daily sales rates (DSR).
GM and Ford both had another disappointing August, though Ford’s 6.9% drop wasn’t as bad as the 11.9% decline in August 2003. Sales at GM, on the other hand, took a 7.1% hit, the worst of the domestic automakers, compared to a small half-percent last year.
GM was especially hurt by weak truck sales, which were 10% off last year’s pace, in spite of a continuing programme of aggressive incentives. Both Ford and GM are now in the red in YTD sales.
GM’s results are even more discouraging because over a quarter of its August sales were low-profit fleet and rental sales. While they are great for volume numbers, they are not so impressive to Wall Street analysts.
As first reported in just-auto in April, some of the American passion for large, truck-based SUVs seems to be cooling. While this is likely due to a variety of factors, sales of Ford and Chevrolet midsize and larger models have declined from last year.
YTD sales of the once-hot Hummer brand are now off 21.6%, even with the addition of the new pickup version of the H2. GM is insulated by strong sales of its upscale Cadillac and GMC brands, but Ford’s SUV sales are now over 4% behind last year’s total, with only the smaller Escape showing improvement.
Ford’s Premier Automotive Group brand Land Rover is also struggling, with YTD sales now more than 15% behind those recorded last year. (The company has just announced equipment upgrades at no extra cost for 2005 model year Range Rover and Freelander.)
The American SUV brands are not alone; sales of Toyota’s full-size Sequoia are down 13.9% for the first eight months of 2004.
The phenomenon is not universal; some upscale SUVs, like Cadillac’s Escalade, Porsche Cayenne and Volkswagen Touareg, are posting solid gains. Toyota’s Lexus SUV models are also in good shape. This may well be due to the fact buyers of premium models are not usually influence by petrol prices.
In fact, premium brands claimed a higher share of the total light vehicle market than they did a year ago. Nearly 11% of all light vehicle sales were luxury models. Lexus has a commanding lead in the segment, followed by BMW, Cadillac and Mercedes. Volvo has solidified its lead over Lincoln, which lagged behind Infiniti in August sales.
Ford’s F-series continued its domination of the American light truck and total light vehicle markets, with a double-digit sales improvement over August 2003, well ahead of the 6.3% drop posted by the perennial runner-up, the Chevrolet Silverado. With nearly 600,000 F-series pickups sold since January, Ford looks like a shoo-in for yet one more year as America’s favourite vehicle.
The Honda Accord beat the Toyota Camry and Dodge Ram to claim third place in total sales and the top spot among passenger cars.
Best-selling American model was the Chevrolet Impala, which was fourth in passenger car sales after the Camry and Honda Civic.
The pickup and minivan segments showed the most improvement in August. Total SUV and crossover sales were up only 0.01% ahead of August 2003, as a percentage of total light vehicle sales. Passenger car sales continued to decline, down over a half-percent of market share since last August.
Import brands, including those owned by Ford and GM, claimed nearly 42% of total light vehicle sales in August, up over 2% from last year. As might be expected, the imports have their best showing in passenger cars, where they are closing on 60% of the segment, but they are making serious inroads into the light truck market, as well. The Toyota Tacoma outsold the Ford Ranger and the combined total of GM’s four small pickups in August.
All the automakers are hoping for better results in September, which this year will include the traditionally strong Labour Day sales period. Beyond that, industry executives and analysts alike are looking forward to the coming months, when a number of significant new models with begin appearing on dealer lots.
Ford has a lot riding on the new Five Hundred and Mustang while GM is looking for good things from its new Cavalier-replacing Cobalt, Pontiac G6 and a line of four new ‘sport crossover’ minivans. Still, both Ford and GM have cut fourth-quarter production plans, hedging their bets and hoping to ease a glut of unsold vehicles.
Bill Cawthon
Poor August prompts GM & Ford Q4 cuts
