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US Car Sales in April Outpace Trucks for Second Month in a Row

Ldvsales
Monthly sales of cars and light trucks in the US, January-April, 2007 and 2008. Click to enlarge.

Sales of passenger cars in the US in April exceeded the number of light trucks sold for the second month in a row, with 655,432 units sold compared to 591,122, according to figures from Autodata.

The US new vehicle market has been generally characterized by greater share of heavier light truck sales for a number of years, with light truck sales finally exceeding those of cars in 2001 on an annual basis, according to the Transportation Energy Data Book. However, car sales have recently occassionally exceeded those of trucks—in May 2007, for example, and before that in 2002.

Cartruck
Cars and light trucks percentage of annual new vehicle sales. Click to enlarge.

The gap between cars and trucks widened in April, however, compared to March, and comes in the overall context of declining sales and rapidly rising gas prices. Total light vehicle sales in April 2008 declined 6.9% compared to the year before, according to Autodata. However, sales of cars increased 5.2% compared to April 2007, while light truck sales dropped 17.4%

The full-size pickup truck and full-size SUV segments have softened for the entire industry—down 15 and 26 percent, respectively, through the first quarter of 2008.

GM—the segment leader for both full-size trucks, with 40% share, and full-size SUVs, with more than 63% share—is eliminating one shift of production at its full-size pickup truck assembly plants in Pontiac, Mich.; Flint, Mich.; and Oshawa, Ontario; and its full-size SUV assembly plant in Janesville, Wis.

Under this plan, approximately 88,000 units of full-size pickup and 50,000 units of full-size SUV production will be removed from GM’s North American production capacity for the remainder of the 2008 calendar year.

With rising fuel prices, a softening economy, and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities.

—Troy Clarke, president GM North America

GM, which saw its sales drop 16% by volume in April 2008 from April 2007, essentially held its car sales flat (120,824 units in April 2008 vs. 121,009 in April 2007); the 16% decline in total sales was driven by a 27% collapse in light truck sales to 136,814 units from 186,545 the year before.

Likewise, Ford saw most of its 12% decline in total sales driven by an 18% drop in light truck sales (to 120,814 from 147,891 units). Ford’s passenger car sales saw only a 1% decline (to 79,912 from 80,732). The venerable F-Series, Ford’s best-selling brand, saw its sales drop 21% in April to 44,813 units from 56,692.

Chrysler was pummeled in both sectors, with a 19% drop in car sales (to 39,564 units from 49,054 units) and a 25% drop in truck sales (to 108,187 form 144,050).

Toyota saw its sales increase to 217,700 units in April 2008 from 210,457 in April 2007—an unadjusted increase of 3%. Toyota passenger car sales increased 12% to 134,863 units from 120,556 while its light truck sales declined by 8%. (Within those results, however, sales of the Land Cruiser more than doubled to 473 from 191; sales of the Sequoia increased 34% to 2,675 units; and sales of the LX more than trebled to 799.)

At the time of this writing, Honda had yet to release final sales numbers for April, “due to technical difficulties.” Preliminary data indicated an increase in total sales of more than 6% to more than 134,000 units.

Nissan sales increased 7% by volume in April 2008 to 75,855 units. Passenger car sales increased 20% to 48,990, while light truck sales dropped 12% to 26,865 units.

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Comments

SJC

I am still amazed that the car industry sells as many units as they do in the U.S. It is not like cars are fashion and you have to have a new one every few years. I think the easy money home refinance piggy bank may have come to and end. People might start hanging on to their cars longer from now on.

Patrick

SJC,

If you take the current inventory of 235 million cars and light duty trucks give them an average life of 20 years (considering used vehicles at the end of their life as well as newer vehicles that are totaled) and you still have a possible 1 million vehicles being taken off the roads every month and considered no longer driveable.

Michael

OT: Has Sungri been covered here already?

http://www.sunrgi.com/media.html

"SUNGRI Announces Xtreme Concentrated Photovoltaics ™ (XCPV™) at The National Energy Marketeers Association's 11th Annual Global Energy Forum in Washington, DC"

"washington, dc - A new solar energy system will soon make it possible to produce electricity at a wholesale cost of 5-cents per kWh (kilowatt hour). This price is competitive with the wholesale cost of producing electricity using fossil fuels and a fraction of the current cost of solar energy."

They made the announcement at a energy marketing forum.
11th annual NEM global energy forum.
http://www.energymarketers.com/agenda/2008/Annual08Agenda.htm

Robert Blocks down page on right. They expect it to be commercially available in 12-15mos.

Is this trustworthy news? Or wild expectations?

Charles S

All I see is glass half empty.

News like this tend to become fodder for people who believe that somehow US market is changing. But the way I see it, it just means the winding down of one fad (vanity trucks), and same demographics will simply shift into another (CUVs, muscle cars, loud gas-guzzling road hogs, etc.) Small cars and hybrids are small niche markets, and even 100% increase in sales just equate to "two drops" in the bucket.

Right now, I believe the downward trend is mostly due to consumer pessimism. If nothing drastic happens in the next year or two, if the economy bounces back, the auto market will shift back to the old paradigm: bigger, faster cars still get price premiums, and only losers shop based on fuel-efficiencies.

All in all, I see little change, but maybe less new cars being sold over year to year.

Dan A

Charles:
I don't see how you can say that--the NYT said that small cars made up 1/5 of the market, up from 1/8 in I think 2000. If you consider that hybrids are now close to 3% market share, and that the prius accounts for about half of all hybrids, the prius alone has about 1.5% market share and has the fastest growing sales of any major vehicle. Also, 4 cylinder engines have replaced 6 cylinder engines as the having the largest market share. I predict between this and all the other things going on, US oil consumption will fall rather dramatically over the next ~5 years. Whether it'll be enough is a fair question, but it's in the works.

treehugger

It is incredible that after almost 4 years in a row of oil price increase, more than 50% of people are still buying truck, and the same people are complaining that the gas is too expensive. Hope it will be even more expensive soon, so we don't see all these trucks anymore.

I concur on the still buying trucks comment. It is like the deer in the headlights that runs into the bumper. DOH!

Engineer-Poet

After 9/11, I was telling anyone who'd listen that those who bought the big guzzling pickups and SUVs wer giving aid and comfort to the planners and supporters of ObL and Mohammed Atta.  Now those people are hurting, but it's too late.

If people had gotten the right message in 2001, Chrysler might have continued with the ESX-3 and turned it into product.  It would be hotter than any Toyota or Honda... if it was in showrooms today.  It's not, and that fact may take Chrysler down all by itself.

SJC

The ESX-3 was a nice prototype. In 2000 when gas was $1.50, it may not have seemed like a good idea to make it. That is what CEOs are suppose to do, have vision and plan ahead. I would have said that this is an oil guy wanting to get even in Iraq, I bet oil is going to go up in price. Better consider at least keeping the PNGV program on the back burner, just in case.

George

I could say that the management of American car companies were visionless fools, and I probably wouldn't be entirely wrong, but every other car company in the world seems to have ultimately produced some giant gas guzzling trucks for the American market. This tells me that Detroit was just doing what made sense in the market that existed in America until recently, and the blame for that belongs with our political leadership. (speaking of visionless idiots...) Maybe we can ship some of our excess Escalades and Hummers to Venezuela, where gasoline is 12 CENTS a gallon!

Engineer-Poet

That's one way to get Hugo Chavez:  squeeze him between rapidly sinking production and subsidized domestic consumption.  When his exports head toward zero, the foundation of his political empire crumbles.

SJC

I never knew excess consumption was a strategic weapon.

treehugger

George

Pardon me but you can blame only the politicians for their lack of vision, in the end 70s president Carter wanted to imposed more agressive Cafe standards, but he was blocked by Detroit

steve

The public drives the market. McDonalds still sells more big macs than salads. Americans don't change until they feel chest pain. Can we really blame that on the person flipping the burger?

Tom Street

While there is plenty of blame to go around, it accomplishes nothing. Cigarette use in this country is not down by accident. Start changing consumer behavior by banning advertising for truck based vehicles.

Dave

Tom I like your thinking, but I would tie the percentage of the companies advertising dollars spent to the efficiency of the vehicles. This would be much harder for them to oppose then a straight ban. The most efficient vehicle must have the largest advertising budget. The least efficient vehicle would have the lowest percentage of the advertizing dollars. They could still make negative commercials like they did for the EV-1 on the efficent cars, but I can’t see them wasting money too long that way.

Harvey D

Warren Buffett just said that American car makers and their workers have to change or disappear.

That's a very strong statement from the richest American but he is most certainly correct.

Will buyers force the Big-3+ and the unions to adapt to new realities within the next 3 to 5 years? They will have to or fade away.

Ford Canada and the Automobile unions just signed a 3-year contract without a raise in pay (for the very first time) but with major reductions in fringe benefits (the untouchables have been touched). This trend should filter througout the industry before end of 2008.

Will the Big+ produce more efficient smaller cars and less huge gas guzzlers in the next 3 years? The trend has already started. Gas guzzlers sales are going down month after month.

Can the Big-3+ compete with Asia and Europe making efficient smaller cars? Yes, they could if parts and sub-assemblies are manufactured in countries where labour cost is much lower, or if the local unions are convinced to do more for less to retain their jobs.

Tough times ahead for that industry in North America.

Meanwhile, my wife and I will seriously consider buying the Prius next generation in early 2009. My excellent Maxima and her excellent Camry will have to go.

gr

Some of the big-3 jobs will morph away from the typical mechanics of ICE assembly to electro-mechanical and electronic assembly - especially with EVs. These lighter duty jobs and some benefit moratoriums will let unions negotiate longer term contracts preserving their role in NA auto manufacturing.

Not sure legislating ad expenditures will go over on Madison Ave. - but advertisers will quickly adhere to a natural trend to efficiency as gas remains expensive. Another angle might be for Homeland Security, DOE and mil budgets to "reward" NA vehicles of outstanding efficiency with endorsements. The winners are praised for domestic sustainability, security and safer tours of duty for enlisted men and women. Nationalism can be powerful persuasion.

gr

Some of the big-3 jobs will morph away from the typical mechanics of ICE assembly to electro-mechanical and electronic assembly - especially with EVs. These lighter duty jobs and some benefit moratoriums will let unions negotiate longer term contracts preserving their role in NA auto manufacturing.

Not sure legislating ad expenditures will go over on Madison Ave. - but advertisers will quickly adhere to a natural trend to efficiency as gas remains expensive. Another angle might be for Homeland Security, DOE and mil budgets to "reward" NA vehicles of outstanding efficiency with endorsements. The winners are praised for domestic sustainability, security and safer tours of duty for enlisted men and women. Nationalism can be powerful persuasion.

gr

Some of the big-3 jobs will morph away from the typical mechanics of ICE assembly to electro-mechanical and electronic assembly - especially with EVs. These lighter duty jobs and some benefit moratoriums will let unions negotiate longer term contracts preserving their role in NA auto manufacturing.

Not sure legislating ad expenditures will go over on Madison Ave. - but advertisers will quickly adhere to a natural trend to efficiency as gas remains expensive. Another angle might be for Homeland Security, DOE and mil budgets to "reward" NA vehicles of outstanding efficiency with endorsements. The winners are praised for domestic sustainability, security and safer tours of duty for enlisted men and women. Nationalism can be powerful persuasion.

SJC

I would rather have taxes on pickups not used for commercial purposes than ban ads. A pickup is a piece of capital equipment. I would not buy a road grader nor a backhoe to drive around, they would be purposeless and inefficient.

Large SUVs serve very little purpose that can not be done with a smaller more efficient vehicle. They are a waste of resources. If people insist on buying them they will pay the price. 10% surcharge on the price and double registration fees for the life of the vehicle.

The specifics are not important, but the results are. You want to discourage people from being wasteful. If they insist, they will pay a price to society to offset their wasteful habits.

People pay second and third brackets for their electricity. There is a baseline that is considered minimum and if you use over that amount, you pay more per unit and so on. We might not easily to this with gasoline consumption, but the principle is valid.

This may not be expressed in the best way, but "wealthy enough to be wasteful" must stop for the good of all.

JamesEE

gr,

That's a very interesting idea. How about an advertisement for the Marine Corps saying something like "the few, the proud, ... and for the rest of you how about helping by buying a smaller car?"

And instead of eliminating the gas tax we should phase in a tax increase if and when the price of oil declines. $3/gal gas didn't change behavior very much because people thought it was temporary. $4/gal is making a bigger difference, and people are starting to get the idea that this isn't going away any time soon. Now we're seeing some progress.

ai_vin

"The public drives the market" ???
Maybe this is true in a simple world view but the world ain't that simple. In the real world industry drives the public with marketing - year to year more money is spent pushing the SUV than all other vehicle types combined.

In the real world industry drives government policy, they lobby lawmakers for/against regulations - they convinced them large vehicles (like pick-up trucks, vans and SUVs) were "inherently safer" and therefore didn't need to meet the same testing standards as cars.

And then there is the infamous SUV tax loophole -
http://www.ucsusa.org/clean_vehicles/cars_pickups_suvs/tax-incentives-suv-loophole-vs-clean-vehicle-credits.html

There do you think that came from?

SJC

You could structure a tax so that the price of gasoline does not go down. An oil import fee, price floors, percentages, there are lots of ways. The time for raising gas taxes was in the 80s and 90s when oil was cheap. We might have been paying $2.50 per gallon in 2000 when the price was $1.75. The money would go to roads, bridges, public transport and efficient autos.

This may be yet another failing of democracy. If any politician wanted to raise gasoline taxes in the 90s they would never get into office. 18 cents per gallon has been the fixed federal tax for a long time, now they are talking about suspending it for the summer..ridiculous. This tax is not even a percentage, like 10%, it is fixed. At least change that tax to a percentage so we pay 10% of wholesale price or 25 cents on $2.50 gallon of gas. That extra 7 cents times 150 million cars would bring in billions of dollars to fix all those bridges that keep collapsing.

JamesEE

There is a very real danger that the price of oil will fall back to $70/barrel sometime over the next 5 yrs. That would get us back to $3/gal gasoline and put millions of new SUVs on the roads. And a tax on oil imports would give a windfall profit to producers of domestic oil. They don't need that.

A new gas tax should be designed to prevent a large price decline. Yes, it's unpopular, but I hope our next president is a leader who can convince people that this is good for our country. Don't tax imports of oil -- tax oil consumption.

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