Retail Sales: 8.5m is the New 11.5m

Edward Niedermeyer
by Edward Niedermeyer
retail sales 8 5m is the new 11 5m

Remember the “worst case sales scenario” in GM’s viability plan? It predicted 11.5m annual sales in the US. Unless a turnaround arrives sometime this year, there’s no chance that sales will hit that number. According to Automotive News [sub], annual sales expectations for 2009 have dropped to 9.8m units. But there’s still a surprising amount of unfounded optimism among Detroit’s spinners and marketing mavens. Specifically, Ford’s execs say that retail sales have “stabilized” over the past four months. Too bad, then, that they’ve stabilized at an abysmal rate of 8.5m units per year. “We’re heartened to see it stabilize — although stabilizing at an awful level,” said Ken Czubay, Ford vice president of U.S. sales and marketing. Heartened? Seriously? But enough of the maudlin posturing. There are scapegoats to blame!

And unsurprisingly, the villain is the same malefactor that was blamed for bringing Detroit to its knees in the first place: the credit market. “People are coming in wanting to buy vehicles, and they are being turned down,” says GM’s executive director of global market and industry analysis Mike DiGiovanni. “We have to break and thaw the credit markets for consumers who want to buy automobiles. We’re seeing some minor thawing occurring, but it is not nearly enough.” This despite billions in TARP money flowing to GMAC and Chrysler Financial. And a host of indicators that show US automakers were in deep excrement before credit markets even began to seize up.

A sense of acceptance has set in. Chrysler’s Jim Press says “we need to recalibrate where the market is and stop dreaming about pent-up demand. Looking at the economy and taking a realistic view of the credit situation, there’s not a lot of reason to think the entire industry is going to have a lot of growth. We want to operate in a conservative manner.” Or, as Stephan Jacoby of the less-exposed Volkswagen Group of America puts it, “right now, we have no sign when the industry can improve, actually.”

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  • Dimwit Dimwit on Feb 09, 2009

    This is a direct result of the boomer bulge. The leading edge of the boomers are on their final vehicles. The large middle might get one more but there's no rush. With all the credit shenanigans from the last decade there's a lot of fairly new metal out there. The trailing edge has battened down the hatches. Gen XYZ are doing their things, just like the boomer did, but on a vastly smaller scale. 17.7m might be the peak that the market will never reach again.

  • Tecant Tecant on Feb 09, 2009

    I have a high enough credit score to qualify for a new car loan today BUT... 1) My 98 Toyota and 2004 Hyundai have been dependable, if boring. Baring an accident, there is no compelling need to replace them this year or next. 2) I still have a job but work in manufacturing so I'm a little nervous about losing it. 3) Any extra money I get, including the $500/$1000 tax credit that is/might be in the Stimulus Plan will go toward paying down debt. 4) When I do buy my next vehicle, the only Detroit automaker I will consider is Ford. I used to be a fan of GM but my last GM vehicles are the reason I have a Toyota and Hyundai in the driveway. I would not miss Chrysler, either.

  • Dusterdude The "fire them all" is looking a little less unreasonable the longer the union sticks to the totally ridiculous demands ( or maybe the members should fire theit leadership ! )
  • Thehyundaigarage Yes, Canadian market vehicles have had immobilizers mandated by transport Canada since around 2001.In the US market, some key start Toyotas and Nissans still don’t have immobilizers. The US doesn’t mandate immobilizers or daytime running lights, but they mandate TPMS, yet canada mandates both, but couldn’t care less about TPMS. You’d think we’d have universal standards in North America.
  • Alan I think this vehicle is aimed more at the dedicated offroad traveller. It costs around the same a 300 Series, so its quite an investment. It would be a waste to own as a daily driver, unless you want to be seen in a 'wank' vehicle like many Wrangler and Can Hardly Davidson types.The diesel would be the choice for off roading as its quite torquey down low and would return far superior mileage than a petrol vehicle.I would think this is more reliable than the Land Rovers, BMW make good engines.
  • Lorenzo I'll go with Stellantis. Last into the folly, first to bail out. Their European business won't fly with the German market being squeezed on electricity. Anybody can see the loss of Russian natural gas and closing their nuclear plants means high cost electricity. They're now buying electrons from French nuclear plants, as are the British after shutting down their coal industry. As for the American market, the American grid isn't in great shape either, but the US has shale oil and natural gas. Stellantis has profits from ICE Ram trucks and Jeeps, and they won't give that up.
  • Inside Looking Out Chinese will take over EV market and Tesla will become the richest and largest car company in the world. Forget about Japanese.