The 10 Auto Brands That Bounced Back Fastest After the Last American Auto Sales Collapse, and the Seven That Didn't
Sales fell 27 percent. Brands such as Chrysler, Infiniti, Jeep, and GMC were in torments; shedding volume as demand withered. Subaru showed signs of relative strength, however, as did the Toyota RAV4. Passenger car market share was on the rise and…
Wait a second — we’re clearly not talking about the frightening first quarter of 2020. Scan the auto sales reports from 11 years ago and aside from a few familiar patterns, the U.S. light vehicle market of 2008 and 2009 did not resemble the U.S. light vehicle market of 2020.
Year-over-year, 2009 volume plunged 27 percent in the United States as a global recession melted home equity, eliminated jobs, and sent some of the biggest automakers in the world into a tailspin. Over the course of two years, auto sales actually dropped 35 percent, a loss of 5.7 million units.
Yet by 2012, three years after the collapse and three years into a recovery that would eventually produce record annual volume, 17 major auto brands (more than 100,000 U.S. sales/year) were selling in greater levels than they had in 2008. Meanwhile, seven other auto brands had yet to fully bounce back.
Of all the unifying characteristics that link the post-recession’s five fastest-growing auto brands, singularly powerful breakout hits stand out as the most obvious. Not coincidentally, the auto brand that posted the biggest 2008-to-2012 improvement, Kia, launched a trio of powerful models that shot the brand through the roof.
KIA
The result was a brand that more than doubled its volume between 2008 and 2012 during a period in which total sales grew just 9 percent.
HYUNDAI
By 2012, numerous other brands were attracting far more buyers than they had in the lead-up to the recession: Jeep, Buick, Mercedes-Benz, Ford, Nissan, GMC, and BMW all reported double-digit percentage growth through that phase.
Yet sudden as the cratering of Lehman Brothers seemed in September 2008, there was a certain level of gradual decline to the U.S. auto industry. Moreover, at no point did demand virtually disappear, as we witnessed across great swaths of the country in late March and early April of 2020. Are there Q2 and Q3 auto launches this year that can mimic the Soul, Sonata, and Jetta launches of a decade ago in order to spur demand?
No, we’re dealing with an entirely different set of issues today, and the new vehicle launches – if “launch” is even a term that can be used – of 2020 are minor contributing factors to what may or may not be a revitalized market.
Nevertheless, there will invariably be some automakers that perform well above average if and when the market recovers. And there will be others, caught like deer in the headlights at the moment, that fail to ready themselves for the unique challenges of the next phase.
Perhaps it’s no coincidence that Hyundai, a significant recipient of extra market share after the last recession, is intent on performing similarly during a potential exit from the current phase. Quoted by Automotive News, Hyundai Motor America CEO Jose Muñoz fought back against internal pressure in March and re-instituted the automaker’s job-loss protection incentive. “There were several options, and there were some within the company who didn’t see the need to develop such a program,” Muñoz says.
Beyond no-interest financing and four months of payment deferrals, neither of which could stymie March’s slowdown, Hyundai believes the very nature of the automaker’s lineup will be a boon following this public health crisis. Hyundai still markets affordable cars. Expecting a sharp rebound, Hyundai wants dealers to have strong inventory levels in preparation for a revival.
“When we come out of this,” COO Brian Smith says, “it’s likely to be a pendulum swing; there’s going to be a lot of pent-up demand.”
If Hyundai and partner brand Kia are correct, it’s quite possible that the Korean duo will once again be near the top of a new list of auto brands that bounce back fast.
[Images: Audi, Subaru, Hyundai, Volkswagen]
Timothy Cain is a contributing analyst at The Truth About Cars and Driving.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars and Instagram.
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I once attended an economics lecture, and the lecturer gave a good analogy of what a recession means for the marketplace: Imagine you are playing a game of chess. Some of your pieces will be at an advantage, if your opponent doesn't notice it, in a move or two you could make a break-thru move that will definitively put you ahead. On the other hand, there will be pieces that are in a vulnerable position. You have to think very hard whether to sacrifice those positions to take advantage of the pieces which show promising leads. Forethought, analysis and tough decisions, to wisely choose between short and long term goals: that is what is identical between chess and businesses. Now, imagine someone comes and bangs on the table. Hard. The pieces will be re-arranged. Some positions will remain essentially the same. Some will improve, some will deteriorate. Your adversary will suffer a similar fate. The thought here is: One *cannot* continue playing with the same strategy as the one being followed previous to the event. The landscape has changed, for you and your opponent. The key giveaway? Whoever *adjusts* his strategy the fastest to the new conditions, is the one who will win.
look a little harder, your #2 winner is actually a loser VW ramped up big and then CRASHED big it seems that moribund company went back to where it was in 2009, at 2% by last year and no doubt spent a ton of money considering VW is management by fiasco