January 2009 US Auto Sales Fall 37.1%

By Chris Haak

02.04.2009

The numbers for January 2009 are now in the history books, and they will go down in history as some of the worst in the past three decades – that is, unless the market continues to deteriorate further, which unfortunately is a distinct possibility.  Only two companies saw sales increases in January 2009:  Hyundai/Kia (+8.9%) and Subaru (+8.0%).  Every other manufacturer was down by at least 15.5%.

Taking it on the chin the worst among the major manufacturers was sad-sack Chrysler LLC, which saw its second consecutive month of a larger-than-50% sales drop at 54.8% below January 2008.  The news wasn’t much better at GM, with sales declining 48.9%.  Rounding out the top six, Ford was down 41.6%, Toyota was down 31.7%, Honda was down 27.9%, and Nissan was down 29.7%.

It’s become an interesting observation for me to watch the press releases announcing dismal sales results spin terrible news into what almost sounds like good news if you don’t know what to look for.  A few tricks I’ve caught:

• Comparing to the previous month instead of the same period in the previous year (January 2009 vs. December 2008, rather than the more conventional January 2009 vs. January 2008):  this comparison is not valid because the auto market is seasonal and fluctuates between months that are either traditionally strong or traditionally weak.
• Talking about a reduction in fleet sales
• Talking about retail market share gains
• Blaming the economy
• Blaming the credit markets

Without putting too fine a point on it, the new vehicle market absolutely stinks right now.  Nobody is selling cars, and incentives do not seem to have any effectiveness (in spite of Chrysler throwing everything but the kitchen sink at the market, with employee pricing, plus subsidized finance rates, plus cash rebates on the hood).  Unlike Ford and GM, however, Chrysler at least had two vehicles in positive territory:  the Jeep Wrangler was somehow up 4% compared to January 2008, and the low-volume Viper was also up, by 74%.  Unfortunately for Chrysler, its car sales fell more steeply than even its truck sales did; its cars fell by 66% while its truck sales fell by 49%.  This is probably explainable by both the launch of the new Ram pickup and the fact that the car lineup at Chrysler is not particularly well-regarded and also has nothing new aside from the Challenger, launched last year.

For the Japanese “Big Three” (Toyota, Honda, and Nissan), the news wasn’t quite as bad, but was still pretty awful.  Toyota’s sales fell 31.7%, with not a single Toyota, Lexus, or Scion model showing a sales increase.  Breaking down the Toyota number, Lexus fell by 35.2% and Toyota/Scion fell by 31.7%.

At Honda, where overall sales fell by 27.9%, Acura sales fell by 29.7% and Honda sales fell by 27.7%.  Every model except for two updated-for-2009 vehicles, the entry-level Acura TSX sedan and the subcompact Honda Fit saw substantial sales declines.  The TSX saw its sales increase by 16.0% while the Fit’s sales increased by 5.9%.

Finally, Nissan’s US sales dropped by 29.7%, with Nissan division’s sales falling by 31.2% and Infiniti’s falling by 17.7%.  Most models of both brands also saw dramatic declines, but Nissan/Infiniti did have more bright spots than did many of their competitors.  The new 370Z sports car was up a dramatic 47.0%, the Rogue crossover was up 6.8%, the Infiniti EX crossover was up 12.5% (albeit to a paltry 776 units), and sales of the Infiniti FX crossover were up 74.9%.

Among the smaller brands, Subaru bucked the trend thanks to the strength of a single model – the well-regarded 2009 Forester, which was up a staggering 114.9%.  The Impreza also had a relatively strong showing, only falling by 5.0%.  The rest of the Subaru lineup’s sales results looked pretty much like the rest of the industry’s did.

As noted earlier, Hyundai/Kia completely bucked industry trends through a combination of the new Genesis sedan, the refreshed Sonata, and probably more importantly, the Hyundai Assurance program that guarantees the company will buy back your vehicle if you lose your job.  Overall, the Hyundai brand saw a 14.2% sales increase, with increases nearly across the board, but vehicles like the Santa Fe SUV (+35.2%) leading the way.  Sister company Kia also saw a sales increase, although Kia’s was more moderate at 3.5% on the strength of the Spectra, Sportage, and Sorento.

Other industrywide results were similar:

BMW Group:  Down 15.5%
Daimler AG:  Down 35.5%
Mazda:  Down 27.3% 
Mitsubishi:  Down 34.5%
Porsche:  Down 36.1%
Suzuki:  Down 48.7%
Volvo:  Down 63.8%
Volkswagen:  Down 17.2%

There were no obvious trends in the sales results as we saw during most of 2008 such as a flight from gas guzzlers into small cars.  The closest thing to a trend was a slight resurgence of larger vehicle sales volumes and a flight from small cars, but there were exceptions to that trend as well (such as the Honda Fit gaining sales, while the Prius was down over 30%).  WIld fuel-price swings and an economy in recession make predicting the future of the US auto market all but impossible.  The only thing that’s certain is that we’re in for a long period of uncertainty in this business.

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