October 2009 US and European Auto Sales Report

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Tag: October 2009 US European Auto Sales Report, GM, Ford, Chrysler, Daimler, Hyundai, BMW, Suzuki, bankruptcy, improve

November 8, 2009

US automobile sales in October were relatively brisk at a seasonally adjusted rate of 11.2 million vehicles per year.  For most of 2009 the sales rate was under 10 million excluding July and August when the industry benefited from the government's cash-for-clunkers subsidy. 

The sales rate improved from 9.5 million in September but was down from August, when sales peak at a rate of 13.7 million.  It is encouraging that the sales pace quickly recovered from the cash-for-clunkers hangover in September.  More importantly, it appears the market has regained a natural upward momentum without artificial stimulation. 

For the year, sales remain depressed compared to the levels prior to the economic crisis.  Sales in the US are down 25% for the year with the sales volume in October up slightly compared to last year.  Last year, sales in October fell sharply as the credit markets tightened after the fall of Lehman Brothers and the banking crisis unfolded.

In October '09, Ford, Subaru and Hyundai Group continue to do well and were up 5%, 41% and 47% (At bottom Table 1).  Ford reported its retail share was up for the 12th time in 13 months.  The Hyundai brand leads the industry in growth in a down market as its market share is up 1.2 percentage points (from 3.1% to 4.3%) for the first ten months of this year.  Its sister brand Kia was up 47% for the month.  It should be noted that its growth in fleet sales is not known and is suspected to account for much of it as the Detroit companies reduced their exposure to the rental car market.  As for Subaru, their sales have been very strong throughout this recession.  Its new Outback and Forrester models have done very well in the market.  Honda and Toyota were both flat while Nissan was up 6%.  BMW’s sales fell by 19%, driven by declines in the X3, 1-Series and MINI.  Daimler and VW also reported sales were up.

Mitsubishi and Suzuki were both down about 50% for the month and year.  For the first 10 months of the year, Mitsubishi and Suzuki sold 46,706 and 35,207 vehicles respectively.  One has to question Suzuki’s relevance in the US market at these volumes and a “V” shaped market recovery is not anticipated. The company is basically selling only two models - the SX4 and its soon to be released Kizashi.

The sales reported by post bankruptcy GM and Chrysler were vastly different.  GM reported its first sales gain in almost two years as sales were up 4%.  Improvements were lead by the new product the company has released since emerging from bankruptcy.  All of their newer product released in the past couple years post strong results such as the Cherolet Camaro, Traverse and Malibu.  Also the strong sales were for vehicles that generate good revenue. More importantly, the strong sales at the company were lead by the company’s core brands – Chevrolet, Buick, GMC and Cadillac.   Saturn, Pontiac, Hummer and Saab, brands that will be phased out or sold, only accounted for 9% of GM’s sales in October compared to 15% in 2008.  

GM stated in its October sales press release:

October quick facts:

·    Total GM sales increased 4 percent compared with October, 2008; retail sales were up 15 percent for the same period.

·    Year-over-year total sales increase is the first since January, 2008.

·    GM gains market share for the third straight month – estimated at 21 percent of the total light vehicle market.

·    Chevrolet, Buick, GMC and Cadillac retail sales represented 95 percent of October retail sales vs. 85 percent in October, 2008.

·    Combined Buick / GMC retail sales were up 33 percent compared with last year, driving Buick-Pontiac-GMC retail sales up 12 percent.

If GM continues to follow up with solid sales results as they unwind their non-core brands, the company may show some impressive financial results.  In many ways, GM's October performance vindicates the company’s product driven restructuring strategy begun in the middle of this decade under former CEO Rick Wagner.  When GM reports earnings later this month, stronger than expected results are anticipate based upon GM’s decision this week to keep its European affiliate Opel and from statements this week by CEO Fritz Henderson during an ad hoc interview.   

Interview excerpt (Full interview):

Q. About the (retention) of Opel, you mentioned today that GM is in a stronger position, can you just tell us what that means? Is the business outperforming what you expected when you came out of bankruptcy? Are you generating cash?

Fritz Henderson: We are outperforming our plan from bankruptcy. I tried to provide at least some insights into that (during the) 90-day update. We'll provide more details of it… in mid- November. You'll see it directly. I'm not going to get into whether (we are) generating cash or not generating cash. I would certainly say the situation is more stable than what the outlook was even two months ago. We'll get into this in a couple weeks. So hold the question. We'll have an opportunity to do that.

Over at Chrysler, sales were down 30% in October and 39% for the year.  To illustrate what has transpired at Chrysler, compared to October 2007, vehicles sales fell 56% when it sold 145,316 vehicles.  For the month, its Chrysler, Jeep and Dodge brands were down by 36%, 37% and 22% respectively.  The high point, according to Chrysler’s press release, was that sales were up 6% compared to September.

All of Chrysler’s four brands were down, including the rebranded pickup truck brand Ram.  The Ford F-series and GM fullsize pickup truck did well in October whereas the Ram pickup fell 30%.  Going into the month, Automotive News estimated that the company had 36,000 pickups in inventory.  Lack of inventory has been an excuse the company has used to explain it lackluster sales performance.

For the year, Chrysler will likely sell under a million vehicles in the US.  The company also announced a new round of incentives to help spark sales in November.  It is not known what percentage of sales are going to the fleet customer but up until the economic crisis last year, the company generated a significant percentage of sales to rental car companies.  Earlier in the year, fleet sales dropped upwards of 70% for the Detroit automakers as credit dried up, which could explain part of the drop in October. However, Chrysler did not provide a breakdown of its retail sales or any guidance in its press release, so the company’s reliance on fleet sales continues to be an unknown.  In its press release, the company only identified Jeep’s retail sales as improving.

Sales release stated:

Three Jeep Brand vehicles saw retail sales increases in October compared with September 2009. The three vehicles are: Jeep Compass, Jeep Patriot and Jeep Commander

The omission of any discussion with respect to the other brands retail performance raises a red flag.  Unlike GM, which has released many new products over the past few months, according to presentations at Chrysler’s 5-Year Business Plan released on November 4th, the company will not have any potentially significant break-though volume products until 2012.  The company does plan to “tweak” many carryover programs over the next 12 months; however, the current product is so weak it is highly unlikely to drive interest in the market.  The company also has replacements for the large SUVs and fullsize cars in the works but that market segment should continue to be depressed.  Unless the company falls back into its old ways and offers higher than industry incentives and fleets heavily to keep the plants running, sales at Chrysler should remain weak compared to the rest of the industry.  A full analysis of Chrysler’s 5-Year Business Plan will be forthcoming.


Auto sales in Europe, at least in the major countries, continue to be brisk compared to those in the US.    The continued better-than-expected results this year have been driven by government cash-for-clunkers subsidies for new vehicle purchases across Europe.  All the major markets reported year-over-year improvements in October.  A summary of the results follows:

·    French car sales rose 20.1%

·    In Britain sales rose 31.6%  

·    Germany's car sales were up 24%  

·    Spanish car sales increased 26.4%  

·    Italy's new car sales rose 15.69%.

October’s sales pace in Europe is certainly robust, especially in Germany, because their cash-for-clunkers program expired a month earlier.  The government subsidies have prevented a US-like collapse in new auto sales.  However, sooner or later there will have to be a payback that results in contraction in the market.  Full reporting of European auto sales will be out next week.  Figure 1 presents the performance of the European market through September 2009.

Figure 1 – European Auto Sales Through September 2009 (Source ACEA) click to enlarge


Automaker October October Percent 10 month 10 month Percent 

2009 2008 Change 2009 2008 Change
BMW Group 20,649 25,512 –19% 200,138 262,172 –24%
Chrysler LLC 65,803 94,530 –30% 781,319 1,278,049 –39%
Daimler AG 18,869 17,250 9% 166,838 212,876 –22%
Ford Motor Co 136,583 132,248 3% 1,370,687 1,741,231 –21%
General Motors 176,632 168,719 5% 1,713,535 2,581,385 –34%
American Honda 85,502 85,864 0 969,638 1,266,447 –23%
Hyundai Group 53,495 36,303 47% 634,282 602,055 5%
Isuzu 251 –100% 165 4,440 –96%
Jaguar Land Rover 3,042 2,894 5% 30,101 16,842 79%
Maserati 111 157 –29% 1,059 2,085 –49%
Mazda 15,068 16,442 –8% 175,257 231,850 –24%
Mitsubishi 3,867 7,486 –48% 46,706 87,591 –47%
Nissan‡ 60,115 56,945 6% 640,411 842,644 –24%
Porsche 1,642 1,427 15% 15,952 22,503 –29%
Subaru 18,169 12,917 41% 176,590 156,706 13%
Suzuki 1,745 3,482 –50% 35,270 77,999 –55%
Toyota 152,165 152,100 0 1,448,587 1,945,404 –26%
VW 24,472 23,478 0.04 244,764 266,849 –8%
Other (estimate) 304 444 –32% 3,043 4,433 –31%
TOTAL 838,233 838,449 0 8,654,342 11,603,561 –25%
Table 1 - US Auto Sales by Manufacturer October 2009 (Source Automotive News)


October car sales rise in Spain, France and Italy, Automotive News Europe, November 2009

Scrappage helps boost UK Oct car sales by 31.6%, Automotive New Europe, November 2009

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