Last week, we looked at the impact of the Housing slow down on various economic sectors.
When we mentioned automobiles, one of the common responses was that its GM/Ford specific, and Toyota was doing just fine in the US. The blame was that GM made lousy cars.
It turns out that glib answer was totally wrong. As the chart nearby shows, total car and light-truck sales fell 7.6%. This is an issue that is impacting just about ALL makes and manufacturers, not just GM. Even mighty Toyota sales dropped 4.3% in the U.S.
Against the overall trend? Bentley and Ferrari are sold out for the year, but they are a hand-crafted, small volume, luxury exception.
Here’s a WSJ excerpt:
"The results also demonstrate the challenge the U.S. economy poses to more-successful Asia-based competitors like Toyota Motor Corp., which posted its first monthly U.S. sales decline in nearly two years. Toyota, which recently surpassed General Motors
Corp. in global vehicle sales to become the world’s No. 1 auto maker,
had been increasing sales earlier this year even as Detroit struggled
and has continued to invest in auto-making capacity in North America,
the world’s largest car market.
Toyota’s sales in April fell 4.3% from April 2006,
according to Autodata Corp. Ernest Bastien, a U.S. Toyota executive,
said consumers appear "tentative" and are exhibiting a "wait-and-see"
The housing slump and rising energy prices could
threaten industry sales the rest of the year. Stagnant or falling home
values could undermine consumer confidence and put a financial squeeze
on consumers who have used home equity to finance big-ticket purchases.
Higher gasoline prices and a drop in building activity hurts demand for
the industry’s biggest, most profitable vehicles. And some in the
industry are concerned that the bite gasoline takes out of consumers’
pockets is beginning to affect the sales of all cars, not just
How did other automakers fare? Ford reported an April US sales decline of 13% y/y. Ford car sales declined 23.6%: truck sales declined nearly 6%. GM fared marginally better — sales declined only 9.5%. Daimler Chrysler sales actually increased 1.2% — and you can be sure the grwoth was MB, not Chrysler. The vaunted Japanese automakers did not do much better: Toyota down -4.3% — their first monthly decline in 2 years; Honda slipped -9.1%; Nissan dropped a whopping -18%.
The intellectually dishonest can blame this on GM’s "lousy cars" but the facts uterly belie that nonsense. Growth continues to decelerate, and with the Housing ATM ebbing, car sales are being impacted.
Economy Trips Up Auto Makers’ Sales
MIKE SPECTOR and JOHN D. STOLL
WSJ, May 2, 2007; Page A3