February 3, 2009

January Vehicle Sales: Three Headlines You Won’t See

Here are the January 2009 results (source articles – Detroit Free Press, Associated Press; December 2008 results on the right are from this USA Today report [scroll to bottom left at article]):CarSales1208.jpg

  • General Motors – Down 48.9%
  • Ford – Down 40.3%
  • Chrysler – Down 54.8%
  • Toyota – Down 31.7%
  • Honda – Down 27.9%
  • Nissan – Down 29.7%
  • Relatively minor players Subaru and Hyundai posted gains (that’s right) of 8% and 14%, respectively.

What follows are three reader-catching headlines you won’t see:

  1. Bailed-out companies underperform the rest in January

    As you see above, everyone but Chrysler was bunched fairly close in mutual misery in December. That changed radically in January. GM plummeted to a near Chrysler-like performance, while Ford’s drop from December was about half as much.

    Gee, you don’t think it might be that a significant percentage of US car buyers, who also double as taxpayers, might be refusing to buy GM vehicles, and continuing to not buy Chrysler vehicles, because of the bailouts the companies received from Washington in December?Fleet sales were off at both GM and Chrysler by 80%. These buyers may also not be impressed with companies that take bailout money.

    I’m afraid that Ford’s falloff compared to January might be due to the fact that press continually referred to “Detroit” and “the US auto industry” during its coverage of the GM-Chrysler bailout instead of naming the two companies involved. Even though Ford has said it doesn’t anticipate needing bailout money from Uncle Sam, many Americans probably think that all three Detroit automakers received bailouts.

  2. Dismal January results threaten companies’ ability to repay bailout loans at end of March

    This one explains itself. But no one in the press, beyond reporting the existence of the $13.4 billion in “loans” (the fourth paragraph at this Business Week article says it’s $17.4 billion) seems interested in this angle. GM and Chrysler have to submit viability plans in two weeks.

  3. Foreign makers gain market share in January; Detroit’s share well below 50%

    Last Wednesday, before results were known, Edmunds.com predicted that Detroit’s Big Three would have a combined market share of “46.1 percent in January, down from 52.1 percent in January 2008 and down from 50.0 percent in December 2008.” While all of the largest six companies came in with larger individual declines than Edmunds expected, Detroit’s underperformance against Edmunds’ predictions was collectively much larger than Toyota’s, Nissan’s and Honda’s. The combined market share of GM, Ford, and Chrysler is probably just above 45%. Most of that decline is due to GM and Chrysler, where your tax dollars are supposedly at work.

Cross-posted at NewsBusters.org.

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3 Comments

  1. Up until the time they got the bail-out (ok loan, if they pay it back)they were at least having their workers work to produce vehicles instead of having them stay home and get paid. They kept the lines rolling by selling to rental car agencies at near cost.
    But with Bush authorizing a loan that Congress rejected, now we can pay them to stay home rather than work so auto rental companies cant get deals on cars.
    The IHT reported on 2/2:

    “But Detroit’s market share loss was voluntary, at least in part. At GM and Ford, sales fell sharply last month because they deliberately reduced deliveries to rental-car agencies, which have proved unprofitable compared with sales to individual customers. But they also lost ground in sales to consumers.

    “Detroit was finally forced to retreat and to stop making cars at no profit just to maintain its size,” said John Casesa, managing partner with Casesa Strategic Advisors, a New York investment firm.”
    GM and Ford each sold about 30,000 fewer vehicles to rental car companies than they did a year ago. Chrysler said it cut its sales to rental companies by 10 percent in January, but did not release figures.

    In recent years, all three Detroit automakers have used rental agencies to keep their production at full tilt — a requirement because they must pay assembly workers whether or not their factories are running. But the practice can also flood the market for used cars, reduce resale values and make it harder to sell new models.

    In January 2005, so-called fleet sales to rental companies, government agencies and businesses accounted for nearly 40 percent of the sales by GM, Ford and Chrysler. Last month, the figure was roughly 28 percent for Ford and 32 percent for GM. Chrysler did not give a percentage, but industry executives calculated that it was higher than that of its rivals”

    http://www.iht.com/articles/2007/02/02/business/carsales.php

    Comment by John Balliet — February 4, 2009 @ 3:57 pm

  2. #1, great points.

    One of the two articles I linked said that fleet sales were down 80% at GM and Chrysler, and down 65% at Ford.

    Comment by TBlumer — February 4, 2009 @ 11:18 pm

  3. [...] week ago (at NewsBusters; at BizzyBlog), I noted that government bailout recipients General Motors and Chrysler had horrible sales in [...]

    Pingback by Reuters: Despite Bailout, GM Bankruptcy Possible; Uncle Sam Isn’t First-in-Line Creditor — But As For Me — February 10, 2009 @ 12:16 pm

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