Less Than a Week in Q1; Matching 2007 Sales an Impossible Dream
March 26, 2008

By Bill Visnic

Analysts and industry-metrics powerhouse J.D. Power and Associates already are predicting a heavy downturn in auto sales for March, based on sales figures from the first half of the month. Now, analysis from Edmunds.com is providing perspective on how bad not just March, but first-quarter sales are likely to be when announced next week.

Based on average sales for the first two months of 2008 compared with last year, the Detroit Three automakers have virtually insurmountable deficits to recover to match first-quarter sales from last year. But longstanding sales juggernaut Toyota Motor Corp. — and several other Japanese automakers — won't be likely to fare much better in what is shaping up to be the brutal retail-sales environment many had predicted.

Indeed, everyone predicted 2008 car sales would be worse than those in 2007; the analysis shows just how much worse in the early going. Some forecasts predict an uptick in the second half; others do not.

"The current economic environment is challenging everyone, including Toyota," said Jessica Caldwell, Edmunds.com's manager of Pricing and Industry Analysis. "Manufacturers raised incentives on many models in March, so it will be interesting to see if higher incentives equate to higher sales since many consumers seem to be in a wait-and-see-mode on buying."

Despite a handful of ballyhooed new models, General Motors is peering out from the deepest hole.

To catch up with its sales for the first quarter of 2007, GM would have to sell a rousing 379,359 vehicles in March — 118,916 more than it averaged in each of the first two months this year.

Chrysler LLC would have to sell 250,521 vehicles this month to match its 2007 first-quarter total. That number is an impossible 107,157 more than it averaged for the first two months this year. Stated another way, Chrysler would have to record a March sales hike of nearly 75 percent over its average sales for January and February.

And Ford Motor Co. will share the pain of a plummeting market, falling seriously behind its 2007 first-quarter sales unless it can record 101,099 more sales in March than it averaged in January and February — a 58 percent hike.

And what of Toyota? Even the mightiest sales operation of the last decade isn’t immune to the U.S.’s flagging auto demand: Toyota would need a 74,828-unit March sales boost, to a total of 251,837, to equal its first-quarter sales total from last year — a tough row to hoe when the company averaged just 177,099 sales per month for February and March.

In addition to the automakers already mentioned, Nissan, Hyundai, Honda and Mazda all would have to rack up double-digit unit March sales increases to equal their first-quarter 2007 sales.

Based on this metric, Daimler AG’s Mercedes-Benz unit stands the best chance of keeping its head above water compared with first-quarter 2007. Mercedes needs to boost March sales by 727 units over its average January and February totals.

Automakers report sales Tuesday. Those reports will tell the story, but even a monthly sales increase of less than 1,000 units may be the impossible dream.•

Quarterly Outlook
Manufacturer	2007	2008 CYTD	Need to sell in March to match Q1 2007	Avg. monthly '08 sales (Jan, Feb)	Difference: Column J and I
GM	900,245	520,886	379,359	260,443	(118,916)
Chrysler Group	537,249	286,728	250,521	143,364	(107,157)
Ford	621,186	346,725	274,461	173,363	(101,099)
Toyota	605,855	354,018	251,837	177,009	(74,828)
Nissan	278,981	162,824	116,157	81,412	(34,745)
Hyundai	177,808	95,885	81,923	47,943	(33,981)
Honda	354,208	213,908	140,300	106,954	(33,346)
Mazda	79,057	44,760	34,297	22,380	(11,917)
Mitsubishi	31,645	16,331	15,314	8,166	(7,149)
Subaru	42,976	24,196	18,780	12,098	(6,682)
BMW	75,433	46,100	29,333	23,050	(6,283)
Suzuki	27,794	15,920	11,874	7,960	(3,914)
Volkswagen	50,332	30,967	19,365	15,484	(3,882)
Audi	21,028	12,570	8,458	6,285	(2,173)
Porsche	8,229	4,310	3,919	2,155	(1,764)
Mercedes-Benz	55,985	36,839	19,146	18,420	(727)

SOURCE:EDMUNDS.COM

Jessica Caldwell, Edmunds.com's manager of Pricing and Industry Analysis, provided the analysis for this report.

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