May Sales Results Indicate a Huge Shift in Buyer Behavior
By Chris Haak
As below mentioned, the Ford F-series has finally lost its monthly sales crown, and in dramatic fashion. The F-series, which has perennially been parked solidly at the top of the sales charts for decades, suddenly found itself crashing into the reality of a , a major downturn in the housing market, and of course, $4.00 per gallon gasoline. The result was not a gradual decline from first to second – the F-series dropped from first to fifth in the span of one month.
The story of the fall of the F-series is certainly not the only canary in the mineshaft that we saw this month; in fact, it’s just one example of a major, major shift in US consumer behavior. Several of us at Techshake have wondered over the past year or two what the breaking point was in gas prices that would finally convince the US consumer to give up on the large-vehicles-for-image-only idea. Consumers ignored $2 per gallon gasoline, and blinked a little when it crossed $3 per gallon. But when the average nationwide retail price of regular unleaded crossed the $4 barrier, they suddenly made a beeline for the Toyota Corolla, Honda Civic, and Ford Focus – or worse, decided not to buy a new car at all.
In terms of manufacturers, the biggest drops occurred in Detroit: Chrysler LLC was down 25% (trucks down 22%; cars down 33% – which is counter-intuitive, but Chrysler explained it as planned fleet sale reductions); Ford was down 16% (trucks down 29%; SUVs down 44%, cars up 4%, crossovers down 7%); GM was down 28% (trucks down 37%; cars down 14%). Toyota, which obviously has the broadest lineup of any import brand automaker, also was not immune: its overall sales were down 4% (trucks down 12%, cars up less than 1%). Mitsubishi was down 24%, with only the Galant and Lancer Evolution seeing sales increases that warranted a mention on their press release. Isuzu’s dead cat bounce of a few months ago is gone, with sales down 28%.
Meanwhile, the brands that were the big winners included Honda’s car-heavy lineup (up 16%; trucks down 9% and cars up 32%), Daimler AG (up 12%, almost entirely thanks to the Smart ForTwo), Subaru (up 13%), and Nissan (up 8.4%).
Individual models told different stories – the losers included nearly every large pickup and SUV, such as the Tundra (down 34%), Titan (down 56%), Silverado (down 42%, partially to be blamed on the American Axle strike), Sierra (down 31%), F-series (down 31%), and Ram (down 37%), Explorer (down 41%), Expedition (down 43%), Durango (down 69%), Suburban (down 42%), Tahoe (down 40%), Yukon (down 50%), Yukon XL (down 57%), Envoy (down 68%), Trailblazer (down 72%). The newly redesigned 2008 Sequoia was up 75% and the Chrysler Aspen was up (unexplainably) 18%. The Aspen is now outselling the Durango on which it’s based by 50%.
Telling also is the fact that of all of Chrysler’s nameplates, one Chrysler (the Aspen), one Jeep (the Patriot), and one Dodge not named Viper (the Caliber) saw any kind of sales increase. No wonder the company is working so hard to re-do their midsize sedans ahead of schedule and get their hands on either rebadged Nissans or rebadged Chinese Chery vehicles as quickly as possible.
GM has more nameplates than Chrysler, so its double-digit sales gainers included the CTS, Cobalt, Malibu, Aveo, G6, Vibe, Enclave, HHR, and Uplander. I consider the Uplander’s sales gains to be a mystery, but the other ones are clearly small and midsize vehicles.
In the Ford lineup, double-digit gains were earned by the Taurus, Fusion, Focus, Sable, Milan, Volvo V70, Volvo C70, and Volvo S80; nearly everything else was down by double digits. The Mustang dropped by 45%; think GM is wondering if it made the right choice in resurrecting the Camaro in this environment?
The numbers also told some interesting stories at both Honda and Toyota. At Honda, the new best selling car in the US – at least for May 2008 – was the Honda Civic, which sold 53,299 units for its best month in history and a gain of 33%. The controversially designed 2008 Accord saw its sales jump by 37% to 43,728 units. The Fit, which is in its last few months of the current model and will be replaced by an all-new car in the fall, saw its sales rocket 53% to 8,205 in May. Finally, at Honda’s struggling Acura division, the TSX climbed 60% compared to May 2007; that car is an early 2009 model that just went on sale.
At Toyota, the story was also far brighter on the car side of the ledger, with the Yaris jumping 31% to 14,397 units, the just-launched 2009 Corolla (review coming in a few days) jumping 17% to 52,826 units, and the Camry down 1.5% to 51,291 units. However, Toyota’s Lexus divsion has had a rough stretch, including May 2008, with sales of every model down, and the division down 16% in May and 11% on the year. Again, we’re seeing the fuel-efficient offerings shine in the sales results and anything else (SUVs, large crossovers, pickups) struggling with double digit sales losses.
As Igor alluded to earlier, the top-selling vehicles in the US in May 2008 were:
Honda Civic: 53,299
Toyota Corolla: 52,826
Toyota Camry: 51,291
Honda Accord: 43,728
Ford F-Series: 42,973
In April 2008, the top five were:
Ford F-Series: 44,813
Toyota Camry: 40,016
Chevrolet Silverado: 37,231
Honda Accord: 34,000
Toyota Corolla: 32,435
Amazing what a difference one month makes, isn’t it? But May 2008 will definitely go down in the history books as the month when the US auto market was turned upside down. To the points made by Alan Mulally and Rick Wagoner, the shift is probably permanent. The companies that adapt quickly and cleanly to this new reality will survive; those that don’t will not.
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