By The Numbers: Beware The Ides Of June
The June auto industry’s sales results are in. The numbers have sent shock waves throughout Detroit— a town that’s become increasingly familiar with seismic events. Although sales tend to slip slightly as the model year winds down, these figures are stimulating some serious hand-wringing amongst The Big 2.8. When you factor in/out fleet sales, the future looks bleak.
Ford Fusion and Toyota Camry sales slid slightly from last month, but their mid-year report card’s looking good. For the first half of 2007, both Camry and Fusion sales are up 10 percent over the same period last year. Comparing June ’06 to June ‘07, Camry sales rose by 12.5 percent, while sales of Ford’s “hecho en Mexico” midsizer declined some nine percent.
The Chevrolet Impala and Chrysler 300 both showed significant increases over last June. The Impala is up by almost 17 percent, while the 300 ascended by 29 percent. There’s a big mid-year divergence; during the last six months, Impala sales rose by almost 25 percent while 300 sales sank by 14 percent.
Keep in mind that both models are fleet queens. In 2007, 46 percent of the 300’s and 44 percent of the Impala’s total sales sailed with the fleets. This does not bode well for either model’s long term prospects.
As predicted, a weak housing market, high gas prices and the new Toyota Tundra’s debut have sparked an incentives war. The trend looks set to drive sales— and steal profit— all summer long.
The newcomer’s sales increased 4K from May, and jumped 146 percent compared to last June. ToMoCo’s rebates and special financing (average incentive: $5083) are working a treat.
Incentives didn’t help Chevy’s Silverado (average incentives: $3064) . Sales of GM’s turnaround dream dropped 23.5 percent from last June. Year-to-date sales are down almost two percent.
Thanks to huge incentives (averaging $6831), the Dodge Ram is holding its own. Sales were down less than four percent from last June. So far this year sales are up a little over one percent.
Sales of Ford’s F-Series (average incentive: $4272) were down less than one percent from last June. Over the past six months, sales sank over 11 percent compared to the previous year.
SUV sales are still taking it on the chin. The Dodge Durango showed a 900-unit increase over May, but slid over 28 percent from last June, and almost 26 percent year to date.
The Ford Explorer lost only about 100 sales from May, but sank 23 percent from last June, and 22 percent year to date.
Once again, sales of older designs fell well below last year’s levels. The Chevrolet Equinox dropped 1.5K units from May, losing a whopping 53 percent from last June. So far, the Equinox is down 26 percent year to date versus last year.
Chrysler Pacifica's June sales climbed 500 units from May, but sank 41 percent versus June ’06, and lost 24 percent in the six month comparison. (Some 52 percent of this year’s Pacifica total has gone to fleets .)
Ford Escape sales are 33 percent above last June’s, and three percent ahead of the first six months of last year. The Toyota RAV-4 showed an 11 percent growth, with a 16 percent increase over the first half of 2006.
The new-for-‘07 CUVs showed slight dips in June. Most notably, sales of the box-fresh GMC Acadia were almost 2K lower in May. The Ford Edge and Jeep Compass held fast, dropping by fewer than 300 units.
Total Sales and Fleet Sales
Overall, all four manufacturers detailed here ( Ford, GM, Chrysler and Toyota ) lost sales from May. Comparing total sales in June ’06 to total sales in June ’07, all but one crapped out. GM was down 21 percent, Ford dropped 8 percent and Chrysler lost 1.4 percent. Toyota’s sales grew by 10 percent. (Year-to-date cumulative: GM, Ford, Chrysler, Toyota.)
Over the six month period, GM is down seven percent, Ford is down 11 percent, and Chrysler is down 1.4 percent. Toyota is up 8.7 percent.
Chrysler’s relative success may be Phyrric. During the last six months, fleet sales accounted for almost 45 percent of Chrysler's total passenger car sales. The artist formerly known as DCX also designated tens of thousands of leftover '06 models as loaners– for one day– and then moved them into their used car inventory.
This is serious. GM’s June market share slumped to 22.17 percent. That’s the lowest level since the company passed that mark on their way UP to their '60's high water mark (48.3 percent share). If sales don’t pick up, The Big 2.8 will enter September (and the history books) with a combined U.S. market share of less than 50 percent.
Pch101 on Jul 13, 2007since Ford goes by actual registrations of vehicles, are its sales figures actually more accurate than those of GM? Or at least a better indicator of the model’s popularity with customers (as long as we know the percentage of fleet sales)? It's debatable, but I'd be inclined to favor registrations, because it's more difficult to manipulate the result. GM would argue that cars can be purchased by end users without ever being registered, so registrations would be too conservative a measure. But I have my doubts that very many cars get sold, whether at retail or fleet, without some sort of registration, so it sounds like a subterfuge to me. I think that the main point here is that you can't look at "sales" numbers in a vacuum, they only tell a small piece of the story. To get a more accurate sense of the market, you need to at least consider some of the other data, such as fleet sales volumes and percentages, retail market share, average incentives and average days of inventory. If the goal here is to see how the manufacturer turns a car into revenue and to determine which cars are helping to produce that revenue, then you need all of these pieces, and then review them to see how they fit together. One piece of data by itself won't tell you everything that you need to know, but looking at several data points together shows the chinks in the armor rather quickly. When a vehicle has high fleet sales, low retail sales volumes in comparison to its rivals, high inventories and bucketloads of incentives, then you know that it is in is trouble, even if the absolute "sales" number reported in the popular media seems to put it into Top 10 lists. Unfortunately, few media outlets outside of this one ever cut to the quick, connect the dots, and show you how the overall sales number often reported to the popular press is often highly misleading and fairly useless, at least as it relates to the Big 2.8.
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