October 2011 Sales: VW, Chrysler Up Big as Market Levels

It was a good month despite the numbers. Automakers said October’s Seasonally Adjusted Annual Rate (SAAR) was the best of the year, at roughly 13.5 million including medium- and heavy-duty trucks, up from 13.2 million in September. Ford and GM cited somewhat encouraging job growth and looser credit for stronger sales.

It’s like malaise; only it looks pretty good next to 2008.

That means that seasonally, Octobers never are terribly good for selling cars and trucks. Another anomaly is that General Motors’ sales rose just 2 percent, though the automaker held on to its 19.4 percent market share, which is up roughly one point for the year to date.

This is the type of confusion car sales numbers cause. That 2 percent increase compares October 2011 with October 2010, of course, and SAAR numbers don’t really mean anything by the time you get actual annual numbers.

What the GM numbers mean is that GM has found its natural level, just under 20 percent share. Chevy sales were up slightly while every other division was off slightly. Buick, for one, ended a long streak of year-over-year gains as it sold down the last of its outdated products, the Lucerne, and built on the Enclave, LaCrosse and Regal. GM says Cadillac struggled amidst a strong product and marketing attack from BMW.

Other news outlets have trumpeted Chrysler Group’s “sensational” 27 percent sales hike, but that’s compared with a very lean 2010 number. Last year, Chrysler was slowly getting back on its feet and trying to hang on to a base number of sales as it got production levels back up. Most of its new or refreshed product was still a month or more off. A 27 percent hike looks good until you consider that Chrysler was the number-five automaker in October ’10, somehow keeping ahead of Honda last year.

That’s not to detract from Chrysler’s success this year. It has managed to reach a five-figure number for its midsize Chrysler 200, and Jeep and Ram pickup sales are strong. You’re getting a pretty good indication of how well the top six or seven automakers will do going forward, though Honda will continue to have shortages because of the Thai floods. Hyundai and Kia will continue to eat into competitors’ market share, and based on a strong start-of-production month for the VW Passat, I think that car could get into the top-five list of midsize cars. Which midsize will it dethrone?

This remains far more important for the U.S. market than competition in the compact class. Forget what GM and Ford say about us moving to c-segment cars, like the Europeans. In October, the top-five bestselling midsize cars outsold the top-five bestselling compacts by a margin of 41.2 percent. That’s up from a 28.3 percent margin in September, which admittedly was closer than August’s 34.5 percent. But in July, when gas prices were still about $4 per gallon in most parts of the country, the gap between the top five-bestselling compacts and midsize cars was just 22.8 percent, with the d-segment cars always leading the c-cars.

With EPA fuel mileage numbers pretty close, mostly in the 30s for both midsize and compact highway figures, price in the current economy has had a bigger effect than fuel efficiency in getting more families into compact cars. Compacts like the Chevy Cruze and Ford Focus cost about as much as a mid-trim level midsize five or six years ago. So it’s no surprise that compact crossover utilities, from the ancient Ford Escape to the fairly new Chevy Equinox are doing well. The bestsellers in the category, the Honda CR-V and Toyota RAV4 have been in very short supply since the Japanese earthquake. Americans looking for a bargain are choosing to pay midsize sedan prices for an Equinox or Nissan Rogue, to get the kind of roominess and versatility that makes c-segment hatchbacks so popular with Western European families.

By the way, you can read my sales reporting day updates and other breaking auto industry news by following me on Twitter at MT_Lassa.

And so, to the numbers …

1. GM: 186,895, up 2 percent.

*Camaro up 22.1 percent, to 6,119, versus Mustang, off 7.9 percent, to 4,898, versus Challenger, off 3 percent to 3,097.

*Chevy Cruze was up more than 104 percent versus Cruze and Cobalt in October ’10, to 14,295.

*Equinox outsold it, though, at 15,108, up 18.3 percent.

*Chevy Malibu was off 17.1 percent, to 10,239.

*Chevy sold 3,833 of its new Sonics, 116 Caprices to cop shops and 2,140 Captiva Sports to fleets.

Chevy sold 1,108 Volts, for 5,003 to date. GM sales chief Don Johnson maintains his prediction that Volt sales will total 10,000 by the end of the year. Just 4,997 to go in two months.

*Chevy Silverado, at 36,656, up 6.9 percent, plus GMC Sierra, up 2.9 percent, at 13,362, combined for 50,018, still short of Ford F-Series.

*GMC overall was off 4.6 percent, to 31,609.

*Buick was off 7 percent, to 11,687. Regal was its only gainer, up 39.6 percent, to 2,281.

*Cadillac was off 11.9 percent, to 11,795. Its only gainer was the SRX, up 12.7 percent, to 4,984. Despite heavy advertising, CTS sales fell 7.6 percent, to 3,918.

2. Ford Motor Company: 167,803 up 6.2 percent.

*Ford brand totaled 161,709, up 12.6 percent.

*That means Lincoln struggled at 6,094, down 10.8 percent.

*F-Series had a great month, at 52,511, up 7.1 percent.

*Fusion again was the bestselling domestic midsize sedan, at 18,094, up 4.2 percent.

*The aged, soon-to-be-replaced Escape remained one of Ford’s strongest non-truck models, up 30.6 percent, to 19,046.

*Explorer was up 224.7 percent over the old body-on-frame model year ago to-date, with 11,987 sold. That compares with 7,197 Chevy Traverses, off 12.8 percent, and just 1,910 Ford Flexes, off 6.2 percent.

*Focus was off 0.1 percent, to 12,386.

*Lincoln MKZ was up 5.6 percent, to 1,953, and MKX was up 5.4 percent, to 1,765, though MKS was off 9.6 percent, to 981 and MKT slid 27.1 percent, to 369.

3. Toyota-Scion-Lexus: 134,046, off 6.8 percent.

*Camry was off 9.5 percent, to 22,043 as production of the new model continued to ramp up.

*Corolla was off 9.5 percent, to 16,244. Toyota says this model was among those most affected by parts shortages due to the Japanese earthquake.

*Prius was off 2.6 percent, to 11,008 and included a couple of Prius-vs sold near the end of the month.

*Tundra was off 6.1 percent, to 6,496.

*RAV4 freefell 24.5 percent, to 10,680 units in October.

*Lexus division was off 10.9 percent, to 18,092. The brand’s “December to Remember” annual sales “event” began November 1. That’s a long December.

*RX, Lexus’ bestseller, was off 18.9 percent, to 6,681.

*ES was off 13.3 percent, to 4,300.

*IS was off 11.4 percent, to 2,640.

4. Chrysler Group: 114,512, up 27 percent.

*The 200 was a strong seller, at 11,205 versus 2,221 Sebrings last year.

*Ram pickup remains Mopar’s bestseller, up 21 percent to 21,037.

*Though Grand Cherokee was Jeep’s bestseller at 11,084, off 13 percent, Wrangler continues to sell well, up 25 percent to 9,892.

*Town & Country was off 25 percent, to 6,338.

*Avenger was Dodge’s bestseller, at 7,136, up 145 percent. Caravan was off 13 percent, to 7,100.

*Dodge Journey was up 36 percent, to 5,028.

*Fiat sold 1,965 500s, for 15,826 year-to-date.

5. American Honda: 98,333, off 0.5 percent.

*Accord was up 9.4 percent, to 22,589, edging Toyota Camry by 546 units.

*Civic was off 1.9 percent, to 16,173, which was 71 units below the Toyota Corolla.

*Odyssey was up 8.6 percent, to 10,415.

*Acura sales rose 4.8 percent, to 11,115.

*MDX was off 2.8 percent, to 3,691.

*TSX was up 37.3 percent, to 2,977, and 259 were wagons. Of 24,698 TSXes sold this year, 2,691 have been wagons.

6. Nissan North America: 82,346, up 18 percent.

*Despite several strong months in a row, Nissan has been unable to catch shortage-plagued Honda.

*Altima was up 15.1 percent, to 21,838.

*Rogue recorded a strong 10,034, up 13.2 percent.

*Sales of the new Versa sedan reached 8,889 in its second full month.

*Leaf sales totaled 849 for the month, 8,066 for the year so far.

*Infiniti sales accounted for 6,862, off 13.5 percent.

7. Hyundai: 52,402, up 23 percent.

*Hyundai already has passed 2010’s full-year sales of 538,228, with sales of 545,316 through October.

*Sonata was up 3.9 percent, to 18,192.

*Elantra was up 37 percent, to 13,000.

*Combined with Kia, the company sold 90,092, good for sixth place.

8. Kia: 37,690, up 21 percent.

*Kia sold 8,616 Optimas, versus 1,630 at model changeover in October ’10.

*Forte sales slipped 18.1 percent, to 4,712.

*Sorento slipped 4 percent, to 10,178, though Soul was up 15.8 percent, to 7,109.

9. Volkswagen of America: 28,028, up 39.6 percent.

*New Passat sales of 5,040, best month for the midsize car since December 2005.

*Jetta was up 9.1 percent, to 13,058,with 1,709 of those wagons.

*Diesels accounted for 20.5 percent of all VW sales in October.

10. BMW Group: 27,288, up 17.5 percent.

*Mini sold 5,415, up 37.1 percent, including 2,012 Countrymen. Countrymans?

*BMW X5 was up 25.6 percent, to 3,997 and X3 was up 2,244 percent, to 2,321.

*BMW brand sold 21,873, up 13.5 percent

11. Mercedes-Benz: 24,449, up 28.2 percent.

*Benz highest U.S. October on record.

*Bestseller C-Class was up 87.9 percent, to 7,084.

*M-Class was up 44.8 percent on the strength of the new model, to 4,091.

*E-Class was off 18.9 percent, to 4,516.

*Mercedes sold 1,485 Sprinter vans, up 104.8 percent, and 327 Smart Fortwos.

12. Subaru: 20,081, off 11.6 percent.

*Subaru says its production levels are back up.

*Bestselling Outback was up 2.3 percent, to 8,891.

*Forester was off 18.9 percent, to 5,385.

*Undergoing model changeover, Impreza was off 45.8 percent, to 1,993.

13. Mazda: 18,326 up 1.7 percent.

*Mazda3 was off 8.4 percent, to 7,095.

*Mazda6 was up 38.8 percent, to 3,438.

*CX-7 was up 13 percent, to 2,807.

*CX-9 fell 1.3 percent, to 2,465.

14. Audi: 10,225, up 25.8 percent.

*A4 sales rose 5.8 percent to 2,613, edging out Q5 at 2,610, up 24.3 percent.

*A5 was up 21.5 percent, to 1,394.

*A6 was up 43.9 percent, to 1,186, on the strength of the new model.

15. Mitsubishi: 4,378, off 14 percent.

*Bestseller Lancer was off 19.6 percent, to 1,064. Lancer Sportback was of 40 percent, to 75, and EVO was off 11.2 percent, to 166.

17. Porsche: 2,270 off 14 percent.

*Cayenne off 9 percent, to 1,032.

*Panamera was off 18 percent, to 611.

18. American Suzuki: 1,947, off 5 percent.

*SX4 continues to lead, at 945, off 5 percent.

*Kizashi was off 18 percent, to 480.

Jaguar/Land Rover: N/A.

Volvo: N/A.

Saab Cars North America: N/A.

Bestselling midsize models:

1.)   Honda Accord           22,589

2.)   Toyota Camry            22,043

3.)   Nissan Altima 21,838

4.)   Hyundai Sonata         18,192

5.)   Ford Fusion               18,094

Bestselling compact models:

1.)   Toyota Corolla          16,244

2.)   Honda Civic                16,173

3.)   Chevrolet Cruze        14,295

4.)   VW Jetta                     13,058

5.)   Hyundai Elantra        13,000

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GM market share in jeopardy?

Friday, May 13th, 2011 @ 2:23 p.m.

General Motors’ current 19.4 percent market share isn’t far off from the 19.6 percent slice of the market it owned in 2009 — when it still had the Pontiac, Saturn and Hummer brands — but that figure could be headed for steady decline as GM customers defect to other brands.

During its 2009 bankruptcy GM was forced to shutter its Pontiac, Saturn and Hummer divisions, leaving the Detroit automaker with a looming question – would it be able to retain owners of those defunct brands? GM managed to keep some customers in the GM family through incentives programs, but those deals have since expired, with most Pontiac, Saturn and Hummer owners now defecting to other automakers.

So far this year, 70 percent of Pontiac owners that have traded in have moved to a non-GM brand. The defection rate for Saturn owners is even higher, with 71 percent choosing a non-GM vehicle.

GM is working closely with its dealers to make Pontiac, Saturn and Hummer owners aware of its current Chevrolet, Buick and GMC offerings, but the effort has proven to be a bigger struggle than expected.

“Hopefully with the breadth of the Chevrolet line and new vehicles from Buick, we can bring those owners into the fold,” said H. Douglas Knust, owner of Harry K Chevrolet Buick in Chamberlain, S.D.

GM’s sales continue to rise with the overall market, but it remains to be seen if defecting owners will eventually undermine those efforts.

References
1.’GM Struggles to…’ view

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GM’s $3.2 Billion Earnings: Profit Over Market Share

Seven years ago, General Motors executives wore lapel pins bearing the number “29.” Market share had just dipped behind that number, and Rick Wagoner was trying to encourage his minions to work harder and push market share back above that number.

Didn’t happen, of course. Four-and-a-half years later, GM’s share had sunk to the low 20s and “29” would have meant the year the stock market and economy were emulating.

Thursday morning, GM announced $3.2 billion in net profits for the first quarter of 2011, with $1.5 billion of that attributed to sale of Delphi preferred shares and of its Ally Bank, its reconstituted GMAC financing arm. Including those special items, this marks GM’s best quarterly profit since 1990, according to Bloomberg Business Week. With or without the Delphi interest/Alphi sale, it’s GM’s fifth consecutive quarterly profit. Net revenue was $36.2 billion, $4.7 billion better than the first quarter a year ago.

GM says it did this with 19.0 percent share of the U.S. market, a full 10 points below the hapless plea of those executive lapel pins from 2004. North American share was 18.3 percent in the first quarter and its global market share is 11.5 percent.

Who cares about market share? GM made money as gasoline in the U.S. crept up toward $4 per gallon. Like everyone else in the U.S. market, GM still has way more margin on body-on-frame trucks and SUVs, but Wagoner promised us years ago as CEO that the company would make money on the Chevy Cruze, thanks to reduced fixed costs and the 2007 United Auto Workers contract.

He wasn’t allowed to stick around long enough to see how a U.S. Treasury and Canadian/Ontario bailout, a Section 363 bankruptcy reorganization and more concessions from the UAW would help make the small car profitable for the company.

And I can’t avoid mentioning the Chevrolet Cruze’s latest recall, announced the same morning as the fifth consecutive quarterly profit. Chevy is recalling 154,112 of them, which includes 99,860 sold in the U.S. since last year, plus Cruzes sold in Canada and those still on the ground, from factory to showrooms. This’ll cost GM, though recalls affect every brand in the industry. These days, as long as you don’t handle recalls the way Toyota did in early 2010, you’ll probably get through them okay.

GM Chairman and CEO Dan Akerson, though he’s no stranger to victory lap hyperbole, called the Q1 results “steady progress, but with more work to do.” On Tuesday, GM reported that it has as 48-day supply of cars, a 52-day supply of crossover utilities and a 111-day supply of trucks. By Thursday, Automotive News reported GM would cut production of its full-size pickups to reduce stock. That means some variable cost cuts, potentially reduced incentive expenditures and lower net revenues. It can’t be overemphasized how profitable big trucks and SUVs are. Even with big incentives GM can make big money on Chevy Silverados, Tahoes, Suburbans, GMC Sierras and Yukons, etc.

It could mean another downward blip in market share, but again, who cares?

Wall Street cares. Its analysts are the most concerned about market share, because it is  “metric” they can understand. I’ve been saying for several years that the U.S. market is becoming more like Western Europe’s, not in terms of what we buy so much as what shares we buy. It’s the “18, 18, 18”rule, in which the top three automakers each hold about 18 percent market share. With 19 percent, GM actually has an advantage, even after shedding Pontiac, Saturn, Saab and Hummer. Ford and Toyota both are in the mid-teens.

The three keys, as Renault/Nissan’s Carlos Ghosn once said, as well as nearly every auto exec with a pulse since his statement, are product, product, product. The Chevy Cruze sells for an average transaction price some $3,000 to $4,000 above the old Chevy Cobalt’s. Launching the Cruze here some 18 months after it went on sale in Europe didn’t hurt, as the development costs, which usually are front-loaded at the beginning of the product cycle, were at least partially accounted for by the time of the North American launch.

The next thing GM must do, beyond getting through the current quarter while cutting truck production, is to accelerate its product cycle to match Ford’s newly aggressive mid-cycle updates. Even though GM is a much smaller company than it was before the summer of ’09, it’s still larger than Ford, probably with more remaining waste and bureaucracy. The advantage to being larger, though, is that GM still has a broader range of products than Ford, including future rear-wheel-drive platforms. Cadillac is still in the luxury game and Buick, even if its cars are less well equipped and priced lower than Lincolns, can be considered competitive with that brand.

Good as Thursday’s numbers are, they’re small beer next to the $37 billion or so in U.S. Treasury loan guarantees that GM hasn’t paid back. When Treasury sells off its remaining 26 percent of GM, it will take much more than Thursday’s closing stock price of $32.02 per share in order to break even. You can calculate that out, but your calculations won’t take into effect the 1 million+ jobs the automaker bailouts saved, not to mention the question of whether we’d be in the middle of the Second Great Depression, now.

Forget “29.” Don’t worry much about “19” except that it’s higher than 18. Fact is, U.S. manufacturing, as represented by GM, Ford and Chrysler, not Microsoft, Intel, Apple and Dell, is making money, for now. I’ll take black ink over 29 percent market share any day.

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African-American Auto Market Surged In 2010, Toyota Benefited Most

Toyota is now the top single brand among African Americans, with 15 percent of the new-vehicle market. That's according to information and marketing analysts at Polk, who listed Ford, Chevrolet, Honda, and Nissan as runners up, each with more than ten percent of the market.

While what Polk calls the 'non-ethnic' auto market increased by just 6.8 percent in 2010 from a year earlier, African Americans bought nearly 69 percent more new vehicles in 2010 than they did in 2009. Overall new-vehicle registrations were also ahead of the market at large, with an 11.5-percent gain for the group. It's also the fastest growing individual group of the U.S. population.

Buick made the most significant gains with African Americans in the market, for 2010, earning about 72-percent more new-car registrations with this shopper segment in 2010. Hyundai gained about 53 percent, while Kia, Cadillac, GMC, Infiniti, Subaru, and Audi each gained more than 25 percent.

Toyota, while dealing with its accelerator-related recalls in 2010, offered some especially strong incentives, including zero-percent financing, attractive leasing deals, and free maintenance. Hyundai also offered its Hyundai Assurance plan, which allowed buyers to return their vehicle—in most cases, with no penalty—if they lost their job.

Acura, Land Rover, Mercedes, and BMW are falling behind with this segment and not growing as rapidly as the overall market; they could be doing more to attract affluent African Americans, Polk observes.

[Polk]

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HID Headlamps: Brighter, But Failing To Shine In The Mass Market

For some, the blueish, whitish beams of xenon high-intensity discharge (HID) headlamps are bothersome—or even blinding. But for most of us who have driven vehicles with them, it's hard to argue with their significantly improved visibility.

That opening line sounds, unfortunately, like it could have been written ten years ago. While it could be argued that HID lamps offer improved safety, their adoption rate has risen very slowly compared to other safety-tech features. According to HID supplier Osram Sylvania, in a press release from earlier this week, only about 22 percent of new vehicles in 2007 came with HID headlamps as standard equipment, and even by 2015 only 38 percent of vehicles are expected to offer it as either standard or optional. Demand, in cases where it's optional, is only expected to increase slightly.

Why? Part of the issue, as we see it, is that automakers have only offered HID headlamps as part of expensive option packages. And oddly, HID lamps seem to cost more in less-expensive vehicles. For instance, on the BMW 3-Series, they're a $900 standalone option, but on the 2011 Mazda3 they're only offered on the top Grand Touring model, as part of a $1,835 Technology Package, and on the 2011 Volkswagen GTI they're only included in the Autobahn model, which costs thousands more.

The other issue, of course, is that HID headlights got off to a rough start in the U.S. Initially their efficacy was questioned, and there was a lot of controversy over their glare—which can be made worse with a coating of road grime on lenses. Years ago, the National Highway Traffic Safety administration logged thousands of complaints from motorists who were momentarily blinded by HID headlamps.

But it turns out, the positives of xenon lamps far outweigh the negatives. Safety studies failed to find any danger from the glare—just annoyance—and HID lamps produce three times the light output of halogen lamps, with better down-the-road illumination, a beam pattern that allows better peripheral vision while driving—something we've certainly noted over hundreds of test-drives—and whiter light that's better with the reflective paint used for road signs and lane markings.

Research has indicated that thanks to the higher illumination and the quality of the light, drivers of vehicles with HID lamps will see potential dangers 30 to 50 yards before drivers with halogen lamps.

Xenon HID lamps also use less power while putting out more light, and the lamps themselves last about 3,000 hours—three times that of halogens.

Meanwhile, Osram Sylvania has also advocated LED lighting in vehicles as a way to reduce electrical loads—especially for hybrids and electric vehicles. For the same light output as 240 watts of halogen high beams, the company's LED lamps draw 56 watts. Overall, according to a University of Michigan study from 2008, LED lights could save 50 percent of power in nighttime driving or 75 percent during daytime compared to traditional lamps.

[Osram Sylvania]

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