EXCLUSIVE ANALYSIS: US October sales off 10.9%

By just-auto.com editorial team | 2 November 2005

Automakers got good news and bad news in October. The good news was the average cost of incentives was the lowest since January 2003. The bad news was American light vehicle sales were terrible.

According to WardsAuto.com, the industry moved just over 1.14 million cars and light trucks in October. Even adjusting for daily sales rate (DSR), that is 10.9% behind the same period last year.

October's seasonally-adjusted annual sales rate of 14.75 million units was the lowest recorded since August 1998. Total year-to-date (YTD) sale volume is now a scant 1.2% ahead of the first 10 months of 2004.

Toyota and Honda avoided the gloom by setting new October sales records. Other winners included Audi, where sales were up over 13%, and Mercedes with an improvement of almost 4%.

Mitsubishi got some welcome news: sales were up by both volume and DSR.

Chrysler was the only Detroit automaker to post a gain and that was because October 2005 had one less selling day, turning a 3% decline in volume into a 0.6% gain in DSR. Good numbers from the Chrysler 300 and Dodge Stratus helped the company minimise a 12.25% decline in light truck volume.

Light trucks took a major hit, down 22% industry-wide. Even Toyota was unable to escape despite a strong performance by the Tacoma which has replaced the Ford Ranger as the best-selling compact pickup in the US.

Those poor truck numbers took their toll on Ford and General Motors. Both companies missed their 2004 marks by a wide margin.

Ford's reported domestic sales were down over 23%. Light truck volume declined 32.8% as several models brought in less than half their 2004 sales. Ford did outsell Chevrolet for the month, cutting the YTD gap to just 8,958 units, and the F-Series pickup easily retained its crown as America's favourite light vehicle.

GM's truck sales were down 32.9% as the Silverado dropped to third place in the standings for the second time this year. While GM's new vehicles like the Chevrolet Cobalt, Chevrolet HHR and Pontiac G6 reported good numbers, overall sales of GM's domestic brands were down nearly 23% reducing the General to a 22.2% share of the market, an historic low.

Retail numbers are even more disappointing as GM admits a quarter of its YTD sales have gone to rental companies and public service agencies.

GM was not alone in its dependence on less profitable fleet sales. Without them, Ford says its October sales would have been down 34% and Chrysler would have posted a double-digit decline.

Bad news was not confined to Detroit. Nissan took a 13% stumble as every model except the Pathfinder SUV and Infiniti M45 missed its 2004 mark. Hyundai, Kia, Mazda, Suzuki and Volkswagen also came up short.

In October, the Detroit Big Three's domestic brands claimed just 52.5% of the light vehicle market.

In addition to a bigger piece of the October pie, imports also increased their dominance in passenger car sales to 60.6%. Cars claimed their largest share of the light vehicle market since January 2003 as sales of SUVs and pickups continued to decline.

Considering the almost legendary affection Americans have for the pickup, it is interesting that just-auto's numbers show pickups have lost more ground than SUVs for the second consecutive month.

This may be because crossovers and refreshed products are covering some of the losses generated by the traditional SUVs while consumers are rethinking image-driven purchases of fuel-hungry pickups.

Bill Cawthon

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