July Auto Sales Dashboard
04 August 2004
Click on any chart to enlarge. DaimlerChrysler results here represent only the Chrysler Group—not Mercedes or partners.
Many in Detroit were hoping for a rebound from the dismal results of June. There was indeed definite improvement on the sales front, and the overall sales picture now looks stronger than last year’s. In general, sales of light trucks and SUVs continue to increase with all vendors, including the Japanese. Nissan, for one, saw a 69% year-to-year increase of its truck sales, propelled by the success of the new Titan. That is not, of course, good news for overall fuel efficiency. |
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GM and Ford bounced back from last month’s drop in sales (earlier post), but still lost on a normalized basis compared to July 2003. Toyota and Nissan continue to do exceptionally well. Toyota, with its best July ever, increased its marketshare 1.7 percentage points to 12.9% in July. Nissan, with its best month ever, increased its market share 1.5 percentage points to 6%. The second chart plots the normalized percentage change in sales in July 2004 from July 2003. |
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(A word of explanation. The month-to-month financial comparisons are done on the basis of the “Daily Sales Rate”. July 2004 had 27 selling days; July 2003 had 26. The monthly comparisons divide the total number of vehicles sold by the selling days. The result is the normalized basis for the percentage comparison. Using just the absolute number of vehicles sold during the total period of time marked by July 2004, all the carmakers results look a bit better, with GM and Honda tipping over into positive territory. On that basis, Ford was the only automaker to post a sale drop for the month compared to last year.)
Note, however, the incentive data also plotted in the second chart. Ford, which spent the most on incentives, had the largest drop in sales year to year. Nissan which spent the least, gained the most. (Incentive data from CNW Marketing research via Bloomberg.)
Let’s look at some of the actual data. Below and to the right is a plot of the July 03-04 car sales. Chrysler’s gains are led by the continuing success of the Chrysler 300 series, which racked up another 10,000+ unit month (12,915); Toyota by the Prius, Camry and Scions. Ford continues to falter. Below and to the right is a plot comparing July year-to-date sales from 2003 and 2004. |
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Note that of these top 6 vendors, Chrysler is currently in last place in car sales. Nissan, Honda and Toyota have all overtaken it both on YTD and on a monthly basis. Despite its gains with the 300, Chrysler depends on its truck sales for its position. Below and to the left is a plot comparing truck sales July to July. The YTD companion is to its right. |
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Everyone is gaining in trucks (which includes SUVs), but the Detroit automakers are disproportionately relying on them. (Chart to the right.)
That disproportionate reliance may been fine in the past, as the larger vehicles raked in larger profits, but it is ill-advised given the current situation. The Detroit 3 manage to keep sales moving through the hefty application of incentives—which, in a sense, are a form of consumer insurance against a certain increase in gasoline prices.
Incentive-driven sales aren’t the best foundation for the ongoing profitability of a business. Nor, I think, will they withstand persistent increases in the price of oil.
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