US Light Duty Vehicle Sales Drop 14% in October; Full-Size SUV Sales Down 50%
1 November 2005
|Of the Big 6, only Honda and Toyota managed an absolute sales increase in October 05.|
Combined actual sales of all light duty vehicles in the US in October dropped 14% from the prior year, from 1,334,487 units to 1,146,397 units.
Of the Big Six, GM and Ford suffered the most, with year-on-year decreases of more than 25% each. Only Toyota and Honda came through unscathed for the month, each eking out a small increase (on an actual basis, not just on the basis of the daily sales rate.)
|Oct-Oct Change in Full-Size SUV Sales|
Combined sales of full-size SUVs from all automakers tumbled some 50% year-on-year, from a total of 160,552 in October 2004 to 79,746 in October 2005. For the first ten months of the year, even with the buying giddiness induced by the employee-discounts programs earlier in the summer, sales of full-size SUVs have dropped 19.1% from the same period in 2004.
Total car sales for the month dropped 3% from the year before, while total light truck sales dropped 22%. Again, all comparisons are on actual unit sales, not on the average daily sales rate.
Moodys cut GM’s debt deeper into junk territory by lowering the long-term rating B1 from Ba2 based on its uncertainty about the company’s ability to restructure and recover. “The outlook is negative.”
Moodys is not particularly optimistic about the ability of GM’s new full-size SUVs (earlier post) to help the company turn the corner.
The GM downgrade reflects greater uncertainty as to GM’s ability to implement a comprehensive restructuring program, stem eroding market share, rebuild North American profitability, and achieve positive free cash flow quickly enough to meet the financial metrics previously defined by Moody’s for maintenance of its Ba2 rating.
The ongoing erosion of GM’s competitive position and market share is evident in the company’s significant third quarter operating loss, which contributed to $6.6 billion of cash consumption for the nine months ended September 30th. The company anticipates that the scheduled launch of its new T900 trucks and SUVs will provide opportunity for improved market share and financial performance. However, in an environment where consumer preferences are shifting toward more fuel efficient vehicles, the market acceptance of this new line of vehicles is less certain, and may not enable the company to fully recover the considerable investment made to develop, produce and launch the project.
That’s not to say that GM didn’t have some successes in the month. Small sport utility vehicle deliveries in October rose 29% with the addition of the Chevrolet HHR and Pontiac Torrent to the category. A 17% sales increase for the new Saturn Vue also contributed to the positive sales results in the small utility category.
The H3, the new mid-size HUMMER, racked up 4,461 units in October, setting records for the division. HUMMER sales were up 129% compared to year-ago levels, largely based on the success of the smaller (relatively) H3.
Pontiac G6 sales continue to build with October deliveries 135% greater than year-ago levels. But overall, car sales for GM were down 15% in October from the year before, and truck sales were down 33%.
As a counterpoint, GM also announced that global sales of GM Daewoo vehicles jumped 41% this October from last year, rising to 112,631. That marks a monthly sales record for the Korea-based automaker for the second consecutive month.
Although Ford was hammered by its own 31% drop in truck sales (including sales of the F-Series, which dropped 31.7% October to October, it performed better in the car segment, with sales declining only 11%.
October saw the arrival of Ford’s new mid-size sedans to the showrooms, all of which performed better than expected (Ford Fusion: 4,078; Mercury Milan: 1,336; Lincoln Zephyr: 1,204).
Chrysler, by comparison, had a relatively good month, although Chrysler executives were “disappointed.” Monthly sales of the Chrysler 300 exceeded 10,000 units for the 17th month since its introduction, PT Cruiser sales increased 66%, Jeep sales increased 8%, Charger sales topped 30,000 units since its introduction, and the Dodge Stratus set an October sales record.
Sales of the Jeep Liberty Diesel CRD reached a total of 7,560 units.
Toyota, on the other hand, had its best October ever. Car sales rose 8.5%, although truck sales dropped 7.6%. Prius sales in October (9,939) representing 9.7% of all Toyota car sales. Toyota’s total hybrid sales (14,173) represent 8.2% of all light duty vehicle sales in October, up almost a full percentage point from September results.
Honda also had a relatively good month, with strong sales of its new Ridgeline pickup and the newly redesigned Civic. Ridgeline posted its best month ever in October, with a record 4,974 units, while Civic continued to make gains, with sales increasing 14% over last October.
Overall, Honda car sales increased 3.4% year-on-year, while truck sales dropped 3.5%.
While there is definite movement away from the largest, most fuel-inefficient vehicles in the US (despite some spikes such as the H3) there is not, however, a widespread movement to the most fuel-efficient. Not yet.
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