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USA: Big incentives beat big storms as September light vehicle sales confound the sceptics

By just-auto.com editorial team | 4 October 2004

September was one for the books. In spite of a string of hurricanes and tropical storms that swept the Southeast, U.S. light vehicle sales rebounded smartly from a disappointing August while delivering a few surprises, writes Bill Cawthon.

According to Ward's Auto, automakers moved over 1.4 million car and light trucks in September, a 5.6% improvement over 2003, based on daily sales rate (DSR). The results yielded a seasonally adjusted annual sales rate of 17.51 million light vehicles, second only to May's outstanding results.

Confounding the analysts while proving that big incentives can beat big storms, General Motors was the big winner last month. The General's 19.9% improvement garnered a 31.8% share of the total market, its best showing this year.

Leading the pack was Chevrolet, up 36% over September 2003. With strong sales of both cars and trucks, Chevy was the top brand with buyers and now trails archrival Ford by just over 8,300 units in year-to-date (YTD) sales. September sales of the Chevrolet Impala passed those of the Honda Accord, though still trailing the Toyota Camry.

GM light trucks had a record month. The Silverado brought in a 46% improvement for the month, hitting its best numbers of the year. Even sales of the large Chevrolet mass-market SUVs, which had been slumping in previous months, snapped back with double-digit increases in almost every model line. GMC added its own good news as the full-size Envoy SUV came up with a 61.8% boost, the biggest gain among all of GM's light trucks.

The only area where GM's magic failed was in its premium lines. Saab was off by 31.9% in September and now has a 22.9% deficit compared to the first nine months of 2003. Hummer continues to be a problem with YTD sales now down 20.3%. Cadillac had some soft spots, too. Though the CTS and SRX continue to be strong, the Escalade stumbled in two models out of three and Cadillac car sales were down by 10.3%, led by a 29% drop for the flagship DeVille.

Chrysler Group enjoyed another good month as sales increased 10.1%, led a 43% jump for the Chrysler brand. The 300 sedans continued zooming off dealer lots and most other Chrysler models posted double-digit gains. Dodge had strong performances from the Durango SUV and Caravan, which easily kept its crown as America's favourite minivan. Sales of the Ram pickup were up slightly, though it is still about 2% behind its 2003 mark in YTD sales.

Among the Big Three automakers, only Ford lost ground as its domestic lines posted a 6.8% decline, adjusted for DSR. Sales of Ford's Explorer, Expedition and Excursion SUVs took double-digit hits. Even the Escape, the only Ford-branded SUV still in positive territory in YTD sales, missed its 2003 mark by almost five percent.

Ford's PAG brands had a disappointing September. Even while it posted a new sales volume record for the month, Volvo's total was down almost 2.9%, accounting for the extra selling day this year. Using the same criteria, Jaguar and Land Rover results were positively grim, down 41.6% and 45.6%, respectively.

It wasn't all doom-and-gloom in Dearborn. The F-Series set both September and nine-month records as it scored 99,720 sales, accounting for 37.6% of Ford's total American brand sales and virtually guaranteeing itself a twenty-third consecutive year as the nation's favourite vehicle. Mercury and Lincoln posted gains in September with improved sales of their large sedans and good results from the Mountaineer and Navigator SUVs.

Contrary to analyst predictions of an improved market share, imports actually lost ground in September, dropping below 40% for the first time this year even as several companies set new monthly sales records.

Toyota led the pack with a 10.3% gain and records for both its Toyota and Lexus divisions. The Scion line continued to meet Toyota's expectations, led by new xC, which passed the boxy xB in monthly sales. Prius numbers remained strong; Toyota has sold more than 35,000 of the hybrid sedans in the first nine months of 2004. Camry numbers were off slightly, based on DSR, but it remains the one to beat as the best-selling car in America.

Lexus car sales slumped 5.6%, as volumes for every model except the LS430 were down. However, strong sales of the GX470 SUV, combined with a good showing from the popular RX330 were enough to give Lexus a 2.3% overall improvement and another monthly record.

Toyota was joined in the record books by Hyundai and Kia. Suzuki is also on a record-setting pace this year with its GMDAT Forenza and Verona sedans.

Honda's premium Acura marque set a new September record. Total sales for American Honda's two divisions hit a new volume record, even though September 2004's extra sales day put it in the loser's column by 2.4 percent. Honda division sales were off by 5.6% as the Accord, Civic and Odyssey failed to match their numbers from 2003. The Pilot bucked the trend, up 31.6% compared to last year.

Mitsubishi and Isuzu continued their downward spirals. Trouble-plagued Mitsubishi is now 35.1% behind 2003 in YTD sales and Isuzu is off 8.8% with the lowest nine-month total sales of any major automaker.

Daily sales rates were unkind to most of the German carmakers. Only BMW came up a winner, capturing the top spot among premium brands for September with a 26.4% boost, built on improved sales of the 3-Series, 5-Series and the contributions of the new 6-Series and X3 SUV. The new cabrio added welcome numbers to Mini sales, which had fallen behind their 2003 pace.

Mercedes sold more cars in September 2004 than they did in the same period last year, but the difference wasn't enough to beat the DSR adjustment and Mercedes came up 2.7% short.

Porsche also came up short by 5.2% as lagging sales of the Boxster and 911 dragged down good numbers from the Cayenne.

Volkswagen continues to struggle in spite of an incentive program which includes low-cost leases. Even Touareg sales fell short last month. Audi fared somewhat better, with good marks posted by the A4 and A8. Overall, VW/Audi was down by 24.9% in September.

The September breakdown was very interesting. Light trucks took their largest share of the total market since last December with improvements in every segment. Pickups racked up the largest gains, upping their 2003 share by 2.4% to claim about 22.1% of the market. SUVs and crossovers gained about 0.9% and grabbed almost 28.4% of total light vehicle sales last month. Even full-size and minivans made small improvements.

One big surprise was last month's drop in the luxury segment. Premium brands had been gaining share for most of the year, but dropped below 10% in September, their lowest percentage of total sales since February 2003.
 
September light vehicle sales put the industry in the black for the first three quarters of 2004 and automakers are looking for a good end to the year. If the weather cooperates, there should be especially good sales from Florida, Georgia and other southeastern states as buyers replacing storm-damaged vehicles join other new-car customers.

Even so, Detroit is taking no chances. GM announced a new incentives program even as it rolls out the new Pontiac G6, Chevrolet Cobalt and an improved Saturn ION. Chrysler's new product push continues with the Dakota mid-sized pickup and Jeep Grand Cherokee and Ford is banking on the new Five Hundred, Mustang and refreshed Super-Duty pickups to give its sales a much-needed shot in the arm.

Bill Cawthon