Are March 2009 Sales Results Finally the Low Point?

By Chris Haak

04.03.2009

March 2009’s US sales results were pretty much as bad as they have been for the past several months.  Overall, industry sales were down by 36.8% in March 2009 relative to March 2008, but as bad as that is, it’s still better than results were in February 2009 (when industry-wide sales were down 41.3%).  This might mean that the economy is improving ever so slightly, or it might be a dead cat bounce or just an anomaly in an unfortunate trend.  It’s never a good thing when you read these manufacturers’ news releases and they’re comparing March results to February’s results rather than to the previous March’s, and stressing retail market share gains and not overall results.  Not only was February 2009 an historically bad month, but February is always slower than March.  But hey, I guess you latch onto whatever good news you can find when most of the news out there is bad.

As with other recent months, the pain has not been limited to GM, Ford, and Chrysler.  Although among the six largest manufacturers, GM and Ford had the largest drops, nearly all brands saw their sales fall dramatically.  GM was down 44.7% and Ford was down 42.1%.  GM’s carnage was widespread as expected, with dead-on-arrival Hummer down 75.9%, Cadillac down 53.0%, Saab down 57.3%, Saturn down 59.6%, and GMC down 50.3%.  The now-core brands of Buick and Chevrolet were “only” down 40.2% and 42.5%, respectively, while Pontiac led GM with a decline of 30.8%.  A few models of note:  Pontiac sold just 141 units of the G3 (a lousy re-badged Aveo); is a handful of units worth further damaging the already-damaged Pontiac brand?  The Chevrolet Silverado was down 44.8%, but the Avalanche was down 74.4%.  GM lost market share in the full-size pickup race with the oldest (yet still fairly current) trucks on the market, except for the Nissan Titan.  GM’s full-size SUVs managed to hold up their sales better than Ford’s or Chrysler’s did.

So much for Ford being the “healthiest” Detroit automaker; although Ford’s future lineup of European small cars shows a lot of promise, I don’t see anything in their sales results that points to the company doing any better than GM.  Basically, because Ford had the foresight/fortune to mortgage all of the company’s assets a few years ago to fund an extensive restructuring, that’s the only reason the company is not standing in Washington every few weeks with its hat in its hands asking for a bailout.  The best-performing Ford model was the Fusion, down 19.9%.  Of note, the F-Series was down 39.9% (though Ford doesn’t break down between the new F-150 and the existing Super Duty models).  Other notable declines were the Mustang (still ramping up) at -63.1%, Focus (-41.5%), Taurus (-45.6), and Expedition (-77.8).  Sadly, the excellent Ford Flex sold only 2,971 units (7,782 year to date), which is far off the pace that Ford had hoped for it.  The Volvo brand was down 31.4%, with a handful of models actually showing decent sales gains (though on a low volume base) – the V70 was up 19.0%, the C70 was up 11.3%, and the C30 was up 24.9%.

Chrysler actually gained market share on its Detroit-based competitors (but still lagged the market) with a 39.3% drop.  In fact, a few Chrysler models were actually up compared to March 2008.  The Jeep Wrangler was up 16%, selling a suspiciously round 10,000 units in March.  The Dodge Journey crossover was up a robust 127% against its ramping-up sales in March 2008.  Critically-panned models such as the Sebring (-78%), Compass (-71%), Patriot (-72%), Commander (-67%), Caliber (-65%), and Avenger (-54%) all saw significant sales declines.  A bright spot for Chrysler is that Ram sales were down just 27%, which is a pyrrhic victory against Ford’s 39.9% F-Series decline and Chevy’s 44.8% decline; unfortunately, Chrysler is also spending a ton of money on sales incentives to spur Ram sales.

The Asian brands are proving again that the market is just terrible, and doesn’t really discriminate against domestic brands anymore.  Toyota was down 39.0%, Honda was down 36.3%, and Nissan was down 37.7%.  As with the Americans, the damage was widespread.  Every Scion model was down more than 50%.  The FJ Cruiser was down 67.0%; the 4Runner was down 67.5%.  The Tundra was down a staggering 61.2%.  Lexus car sales were also ugly; for example, the LS was down 59.9% and no Lexus car doing better than the ES’ 46.4% decline.  There was some good news at Toyota; the RAV4 was down 8.2%, the Corolla was down 11.4%, and the now-launching Lexus RX crossover was down 20.1%.

Honda’s results were dragged down by larger vehicles such as the Element (down 71.6%), Ridgeline (down 67.4%), S2000 (down 66.4%), and the Acura RL (down 70.1%).  Brighter spots for Honda were the Acura TSX (easily the least-ugly Acura; up 12.1%), and the Honda Fit (down 22.5%).  Most other models were down between the mid-20% to mid-30% range.

The Nissan 370Z/350Z led the way with a 24.8% sales increases in March.  The Rogue small crossover was up 1.6% – not great, but not a 30%+ decline like the Honda CR-V saw either.  The other good news for Nissan in March was that the Infiniti FX crossover – which is more or less the de-facto flagship of the Infiniti line, and a really nice vehicle to boot – was down by just 6.3%.  Vehicles in Carlos Ghosn’scompany that aren’t carrying their weight include the Frontier pickup (-62.8%), Pathfinder (-60.4%), Armada (-66.0%), Quest (-55.3%), Infiniti G coupe and sedan (-52.8%), and Infiniti QX56 (-70.3%).

Volkswagen’s US sales were down by a better-than-industry 19.7%, thanks to several new products such as the CC, Tiguan, and Routan.  Were it not for those three, VW would have been down pretty significantly, with the Jetta doing the least-worst in the lineup (down 14.4%).  The Passat was down 71.6%, the New Beetle was down 60.7%, the Rabbit/GTI/R32 was down 35.9%, and the Touareg was down 70.9%.  So much for Vee-Dub’s plans of world domination right now.  The Audi brand was down 19.4%, which actually allowed it to pick up some market share.

Rounding out the other players in the US market, BMW Group (including Mini and Rolls-Royce) was down 22.9%, Daimler AG (including Mercedes-Benz and Smart) was down 23.1%, Suzuki was down 24.1%, Mazda was down 33.3%, Porsche was down 29.1%, and Mitsubishi was down 57.0%.  Market share grabbers in March included Subaru (down just 2.6%, but still up 1.6% on the year), Hyundai (down just 4.8%), and Kia (down just 0.6%).  Of note is the fact that only Hyundai Group (up 0.7%) and Subaru are in positive territory for 2009.  Also noteworthy is that Isuzu reported zero sales in March 2009.  They’re gone.

This month we saw a possible glimmer of hope in the sales results, but it’s a pretty sad state when the industry is nearly ready to break out champagne bottles on a 37% decline in sales volume.  Something has to be done to further stimulate demand; perhaps the fact that Germany’s sales were up 40% in March thanks to its recent cash-for-clunkers law might give Congress some inspiration to move forward with that idea.

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