July Vehicle Sales: Detroit Makers Fall Below 50%
August 01, 2007

July wasn’t kind to any automaker with Toyota registering its first sales decline in almost three years. But Detroit automakers made history: their combined market share of the U.S. vehicle market fell below 50 percent for the first time ever.

The combined market share for Chrysler, Ford and General Motors stood at 49.7 percent in July, according to Edmunds.com’s calculations. It was only the mid-1980s that their combined share was nearly 75 percent.

"It's probably a turning point for people who look at the record books. Domestics on their home turf are being beaten by the foreign automakers in terms of their market share," said Jesse Toprak, Edmunds.com's executive director of Industry Analysis.

Here’s a company-by-company rundown of the good, the bad and the ugly of July vehicle sales:

GENERAL MOTORS

GM sold 320,935 vehicles in July, down 18.5 percent compared with a year ago.

Paul Ballew, GM's executive director of Global Market and Industry Analysis, rated the automaker’s sales performance as “okay,” considering last year’s summer months were boosted by rich incentives. Further, GM’s July performance improved from its dismal June.

The Good:

· GM’s market share hit a high for the 2007 calendar year to date at around mid-24 percent;

· GM is spending significantly less on incentives than it did a year ago. In July 2007, GM’s Total Cost of Incentives (TCI) calculated by Edmunds.com was $3,130 per vehicle, down 30.5 percent from last July’s TCI of $4,502.

· GM’s new crossovers – the Buick Enclave, GMC Acadia and Saturn Outlook – are selling extremely well;

· Saturn’s new models, including the Aura and Outlook, are successful.

The Bad:

· GM’s older cars are slow sellers;

· Buick’s car sales are down 28.9 percent;

· Chevrolet Cobalt sales fell 31.1 percent; sales of the Malibu, scheduled for replacement this fall, dropped 45.1 percent.

The Ugly:

· GM’s retail sales plummeted 26 percent from July 2006;

· GM’s full-size pickup truck sales, despite a bit of a rebound from June, are down 26.5 percent from a year ago, but 0 percent financing for 60 months is required to move them;

· GM’s incentives are bound to rise.

For the year to date, GM has sold 2,243,697 vehicles, down 9.4 percent from the first seven months of 2006.

FORD

Ford’s overall sales for July totaled 195,245 vehicles, down 19 percent compared with a year ago. 

Ford has been whittling down its sales to daily rental car companies, which were down 57 percent from a year ago. Still, retail sales also dropped – by 17 percent.

The Good:

· Ford’s crossover sales are strong and with low incentives. Ford Edge sales were strong and Ford decreased incentives spending by 3.2 percent from June, according to Edmunds.com’s calculations of TCI. Ford Escape sales rose 2.2 percent while the TCI on the Escape are down a whopping 53.9 percent to $1,467 from $3,181;

· Sales of Ford’s high profit margin large sport utilities rose. The Ford Expedition’s retail sales were up for the 11th consecutive month;

· Lincoln posted higher retail sales, though rental sales were down. It was the 10th consecutive month of higher Lincoln retail sales;

· Land Rover sales rose 19 percent on the strength of the new LR2.

The Bad:

· Ford’s overall sales were down 19.1 percent from a year ago;

· Mercury sales fell 34.8 percent, led by decreases in the Grand Marquis which had a sales drop of a hefty 62.7 percent;

· Ford F-Series pickup sales are down again – 18.1 percent in July from last July.

The Ugly:

· Ford’s car sales fell 33.4 percent;

· Sales of the relatively new Fusion fell 31.3 percent;

· Sales of Ford’s only small-car entry dropped 10.7 percent in a segment that is hot.

CHRYSLER

Chrysler sold 137,728 vehicles in July, a decline of 8 percent from a year ago.

Darryl Jackson, Chrysler’s vice president of U.S. sales, said on the automaker’s Firehouse blog that Chrysler sales got a boost in the last few days of the month from the New Chrysler Lifetime Powertrain Warranty, that provides a lifetime powertrain warranty for the original owner. Jackson said that bodes well for August.

“We saw it come through on the traffic side, and we saw it come through on the sales side. We think that momentum is going to travel right into August,” Jackson said.

“I think the outlook is phenomenal,” said Jackson. “We’ve got a new minivan coming. We’ve got a new Liberty coming, and we’ve got all these new fuel efficient vehicles.”

The Good:

· The Jeep Wrangler continues to sell well and is the strongest model in the Jeep line with a 16-percent increase in sales;

· The newly designed Chrysler Sebring showed a stunning 377-percent increase over June. However, its predecessor was a poor retail seller and sold mostly to fleets;

· Wrangler doing very well and is the strong product of the Jeep brand with a +16% increase;

· Jeep Compass sales showed a 282-percent increase to 2,591 units, though the model was in launch phase at this time a year ago;
· In contrast to last year, Chrysler’s inventories appear in check, down 17 percent.

The Bad:

· Chrysler’s total sales are down 8 percent from a year ago;

· Sales of Dodge brand vehicles fell 14 percent. Dodge cars and trucks doing poorly with most having sales declines vs. a year ago. Those declines combine with the sell-down of the current Caravan and Grand Caravan to make room for the new 2008 model.

The Ugly:

· Chrysler’s incentive costs are up double digits from a year ago, putting it at the highest level since Edmunds.com began tracking incentives in 2002. Chrysler’s TCI is up 55.6 percent to $4,082 per vehicle.

· Chrysler spent nearly $7,113 per vehicle in lease subsidies in July. In addition, Chrysler is using low-rate financing, additional bonus cash for August and zero-percent financing for 60 months on select models.

TOYOTA

Toyota reported July sales of 224,058 vehicles, a decrease of 3.5 percent from July 2006. It was Toyota’s first sales decline in nearly three years.

Lower sales overall were due to lower sales at the Toyota Division and Scion. Toyota sales were 196,917 vehicles, a 4.5-percent decline from a year ago. Toyota car sales were down 10.2 percent. Truck sales were up 4.2 percent for their best ever July.

Lexus had its best ever July of 27,141 vehicles sold, up 4.9 percent.

The Good:

· Lexus sales were up 4.9 percent;

· Toyota Prius sales posted their best-ever July with 16,062 sales, up 50.5 percent over July 2006;

· Tundra hit all-time best-ever record sales of 23,150, thanks to record-high incentives;

The Bad:

· Toyota is not immune to the same economic pressure impacting domestic sales; overall sales dropped TK, the first sales decline in three years;

·  Corolla sales fell 25.9 percent; Yaris sales dropped 16.5 percent. Toyota lowered incentives on both models significantly and will likely have to bump them up;

· Camry Hybrid sales were off 13.8 percent. The high price of the Camry hybrid has turned off some consumers who have opted for the regular Camry, which saw sales rise 3.2 percent in July. Toyota has responded by de-contenting and lowering the price of the Camry hybrid for 2008;

· Sales of the new Scion xB are falling short, so far, despite its first full month of new model sales. Sales are down -20.7% from July 06.

The Ugly

· Incentives in the Tundra are forecasted at an all-time high of $6,861 per vehicle for July, up 31 percent from an already high $5,242 in July 06;

· Tundra ranks No. 1 among all trucks for the highest incentive.

NISSAN

Nissan reported sales of 87,877 vehicles in July, up 5.9 percent from the prior year. Nissan Division was one of the industry’s few bright spots, with sales increasing 7.6 percent over last year. Infiniti sales decreased by 5.9 percent, however.

The Good:

· Nissan division sales increased 7.6 percent;

· Versa sales are hot, enjoying a 177.5-percent increase;

· The revised Altima, with the addition of the Coupe, is selling well with 44.2 percent increase;

· The redesigned G35 sedan had sales increase +34.7 percent, though new competitors are coming into its segment;

· Titan sales increased by 4.5 percent, thanks to hefty incentives.


The Bad:

· Infiniti sales decreased 5.9 percent;

· Sales of the redesigned Sentra were down 4 percent. The Sentra performed poorly against the Honda Civic and Mazda3, both of which had higher sales;

· Nissan’s incentive spending is down from last year, but remains among the highest of the large Japanese manufacturers. Edmunds.com estimates Nissan’s TCI at $2,290 per vehicle, down 12.5 percent from a year ago.

The Ugly:

· In total, Nissan’s truck and SUV sales are down.

HONDA

American Honda posted July sales of 141,049 Honda and Acura vehicles, down 3.2
percent.  Honda had sales of 126,668, down 1.2 percent. Acura sales declined 17.7 percent to 14.381 vehicles.

The Good:

· Honda Fit and CR-V are hot sellers. Fit sales soared 110.8 percent, breaking the previous sales record set in June. CR-V sales 35.3 percent for its best July and its second-best month overall.

· Honda Civic sales edged 1.4 percent higher; Civic Hybrid sales slipped 2.9 percent;

· Honda Ridgeline sales climbed 11.3 percent, likely due to increased incentive spending;

· Honda Accord sales eked 1.7 higher as Honda sells it down through high incentives to make way for the redesigned 2008 version;

· The Acura MDX has done well after its revision, showing a 7.3-percent increase in sales.

The Bad:

· Honda is not immune to being forced into incentive spending. Honda’s July TCI is estimated to be up 27.9 percent to $1,146 per vehicle;

· The Honda Odyssey, Pilot, and Element saw sharp sales drops. The vehicles are long in the tooth and are carrying heavy incentives;

· Except for the MDX, the Acura model line is being hammered by the preponderance of older models. TL sales dropped 22.0 percent with the revised Infiniti G35 and BMW 3-Series stealing sales. TSX sales fell 24.1 percent. Never a stellar performer, the RL had sales plummet by 54.3 percent.

Posted by Michelle Krebs at 2:11 PM under Analysis , Chrysler , Featured , Ford , GM , Toyota | Comments (0) | digg this | Seed Newsvine