GM, Ford and Toyota are gearing up, but Chrysler has a way to go
Filed under: Company News, Earnings, Ford Motor Co., Toyota, General Motors
General Motors reported its first monthly gain in U.S. sales in almost two years, while Toyota and Ford also improved, a sign the auto industry it starting to crawl back from a yearlong slump.Demand for new cars and crossovers in October fueled better results for General Motors and Detroit rival Ford Motor (F). GM's sales rose 4 percent from October 2008, while Ford notched a 3-percent gain. Japanese rival Toyota Motor (TM) said its sales edged up less than a percent. Less rosy news came from Chrysler Group, whose sales fell 30 percent, though they improved from September.
The biggest winners were Hyundai, based in South Korea, whose sales jumped 49 percent to 31,005 vehicles, boosted by its fuel-efficient Elantra sedan; and Japanese automaker Subaru, which saw a 41-percent surge, helped by strong sales in its Outback and Forester models.
Automakers had said October would be a test of how strong the market was without any effect of the government's Cash for Clunkers program. The industry staggered through a tough September, hurt by the collapse of demand following the clunker rebates that fueled a sales surge over the summer.
Ford's top economist Emily Kolinski Morris said October sales signal a real underlying demand for new vehicles after the distorting effects of the clunkers program. The economy is "in transition from recession to recovery. We expect consumers to remain cautious as the recovery continues," she told analysts and reporters during a conference call.
The mood now was in contrast to a year ago, when consumers were frightened away from showrooms by the early effects of the financial meltdown and credit freeze.Clearing Out the Old
This October, Ford got a boost from new product launches and gained U.S. market share for 12th time in 13 months as its critically acclaimed vehicles continue to grab buyers from rivals. Ford has also benefited from consumer goodwill because it didn't take government bailout money or go into bankruptcy, as GM and Chrysler did.
More than 80 percent of Ford's sales last month came from 2010 models, which also helped the company lower its incentives.
That was in line with the industry, which spent less to give car buyers big rebates. Automakers focused on clearing out old inventory and focused on selling 2010 models, which are not discounted as heavily.
Fuel-efficient models like the Ford Fusion sedan and Escape small sport utility vehicle sold well, with both notching sales jumps of around 25 percent. Ford's overall car sales rose 11 percent over last October, while crossovers climbed 23 percent. New 2010 models like the Taurus and Lincoln MKT crossover also flew off dealer lots.
Ford's truck sales, by contrast, fell 10 percent.
Let's Make a Deal, Please
Chrysler, the maker of the Chrysler, Dodge, Jeep and Ram truck brands sold 65,803 vehicles last month, up 6 percent from September. That was when its sales slumped because dealerships could offer few popular models. The automaker, which is announcing a new product strategy on Wednesday, is aiming to show steady improvement from month to month.
Looking to boost November sales, Chrysler will offer a slew of new incentive programs this week. The carmaker will offer zero-percent financing for up to 48 months on all its vehicles, and a no-cost maintenance and service program its Jeep and Chrysler brands. Buyers also can opt for $2,500 off their purchase if they don't take the no-interest financing. The deals begin Wednesday and run until Nov. 30.
Ford spent the least on incentives among the Detroit Three automakers, $2,909 per vehicle, according to Edmunds.com. That's down one-fourth from October last year and 6 percent from September. Still, it spent more on incentives than the industry average of $2,468, with Japanese automakers like Honda and Toyota spending significantly less.
Susan Docherty, GM's new sales chief, acknowledged that it led the industry in spending on rebates, low-interest financing and other incentives in October. Edmunds estimates GM spent $4,277 per vehicle sold versus the industry average.
The company spent more as it phases out the Pontiac and Saturn brands, and because it had a high number of 2009 models left in its inventory, Docherty said. GM, she said, plans to reduce incentives as it sells down older models and ships more newly launched vehicles, though she declined to say when.
"It didn't happen overnight, and we're not going to fix it overnight," Docherty said.
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Reader Comments (Page 1 of 3)
11-03-2009 @ 6:05PM
jim said...
About time!! My next car will be G.M product, Its time we start helping our own!! Since the Gov take over(Both rep and dems gave bailout $ when the loan markets crashed) they haved tightened up ship rather well! Screw the other countries!! Even the ones made here! The $ ends up going back over seas. I remember 911 all to well and the big 3 (mostly GM) gave all kinds of vehicles to help and $. Honda ,nission,kia gave squat! These folks working for the U.S auto co. might someday stop using anybody that drives a import and do their biz w/someone else! I already do this! Last month I turned away a guy selling his companies windows I needed for my house because he pulled up in a nission, next guy drove a Chevy truck and Im happy to say he got the job!! Oh and before you say it,NO I dont work in the auto industry I just think Americans should support Americans!!!
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11-03-2009 @ 7:11PM
troy said...
At last!
Hyundai and Subaru is gaining market share and earning respect!
Hope they HELP American companies by destroying the UAW!
11-07-2009 @ 11:19AM
kevin said...
well said Jim
i would do the same as you
and in traffic, I would not give Nissan, Toyota etc. courtesy (i'm in my Ford Focus)
11-03-2009 @ 9:31PM
paul said...
way to go. i do the same thing i do what i can to buy from people that buy american cars. not cars that they say are made in the usa. like you said the profits go overseas
11-03-2009 @ 10:18PM
richard said...
I`m with you, Jim, we have to support GM. And I also don`t do business with people driving foreign products. We have to start supporting Americans!
11-03-2009 @ 10:21PM
screwGM said...
That's right, SCREW GM and their crap cars. The reason why they increased by 4% this October was because sales in Octobrer 2007 were absymal. That makes them 4% better than abysmal.
11-04-2009 @ 12:40AM
john anderson said...
well said Jim and to you tunnel visioned patriots the reason this countrys hurting is because of all you sel ritious jerks that buy lap car and koreancars.Those countrys dont let us sell anything over in there countrys that amerixcan blood and money was spent over there they say screw us so think of that when you hope in.The koreans hate Americans dont believe me ask someone that served over there in the service,and what thanks did we get for rebuilding japan,they stole our market.I have driven GM products all my life and never a problem.I HOPE THE NEXT JOB LOST IS TO THOSE DRIVING JAP AND KOREAN CARS AND TRUCKS.
11-04-2009 @ 5:10AM
gleeminghope said...
Diddo..great post. I agree with you. We just had friends fly in to Florida and they refused "foreign cars" as rentals. I also refuse to speak to any sales person that comes to my home driving a foreign vehicle..I actually will tell them that I will not even talk to them. I know people that in hiring will look out the window and see what type of car they drive..and make similar decisions. Can't be too too smart if they drive foreign? I also do not give cuts in traffic to foreign car drivers and one stopped and asked me for directions because they were lost and I refused..they have to get the message..that many of us, even those of us who don't work for the Big 3 consider all foreign car drivers traitors to the United States.
Also, I just saw on the news about Toyota having MAJOR problems with the accelerators on their vehicles and it has nothing to do with the floor mats. It has to do with the computers in their cars..the cars can acclerate up to 100 miles an hour and there is nothing you can do..it is the computer. This situation is really starting to get the attention it needs, because these Toyota's are literally killing many Americans..they cannot fix the problem. I wouldn't put my life and my family in a Toyota.
11-04-2009 @ 5:46AM
the truth said...
Go green. Stop driving and don't buy anything made from metal.
11-03-2009 @ 6:09PM
jim said...
Oh Yea, I almost forgot, I want them to someday payback the $ to uncle sam and the taxpayers!!! God bless America!
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11-03-2009 @ 10:23PM
screwGM said...
Dream on Jim. What's that your smoking?
11-03-2009 @ 6:30PM
rick said...
Too many times have we seen imports being driven down the road or highway, I have often wondered what kind of person would do this. People need to understand that they should not live in a country that they do not support. These are the same people that will celebrate the 4th of July and wave an american flag but then drive away in a import. As for as I am concerned, you can not accept the freedom that somany have given their lifes for only to pretend to be an american on certain days of the year. Those people are ripping our country apart and killing our economy. I bet your saying what is? I buy an import vehicle and thats killing our country? Look at it on a bigger scale, imports sale more cars, domestic has to go into bankruptices, americans lose there jobs, suppliers lay off workers or go out of business, and the ripple keeps going...so yes. support american made products stupid.
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11-03-2009 @ 6:56PM
md said...
its not nice to call someone stupid, didnt your mother teach you that?
11-03-2009 @ 7:14PM
roy said...
Tell the UAW to SUPPORT America by killing themselves so the American auto companies can USE their money to INVEST in the company instead of overpaying LAZY UAW bums!
Ford can't even enjoy the success of their EXECUTIVES financial decisions without the UAW threatening to take it AWAY from them!
Those LAZY UAW TRAITORS!
If the UAW hates America, why don't they leave?
11-03-2009 @ 6:39PM
dan k said...
2010 Taurus is great in every way. The Ford "500" that preceded it was a sold value and capable car too.
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11-03-2009 @ 6:47PM
chuck said...
GM and Chrysler have no plans to pay the tax payers back their $80 Billion+. There isn't any chance in hell that I will buy anything from them.
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11-03-2009 @ 6:52PM
md said...
There is no such thing as an authentic US made vehicle, and many "foreign" autos such as Toyota and Honda are actually made and assembled in the US by American workers... i couldnt be more proud of my country and i drive a Toyota, because its a well built machine proven to last the longest so no pointing fingers.....
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11-03-2009 @ 8:46PM
kevin said...
yes, toyotas and all that foreign trash are for the most part assembled here of most likely FOREIGN PARTS
any idiot can do that
yes MD, be proud that the profit from your foreign trash lines the pockets of Tokyo and Seoul and adds to trade deficit
and be proud a foreigner founded the company of what you feel 'proud', not by an American like Henry Ford
you might as well leave for Japan...
and if your Toyota gets recalled and you die from it, don't count on me to attend your funeral
11-04-2009 @ 5:38AM
gleeminghope said...
What..by most measures, Detroit automakers come out way ahead. The National Highway Traffice Safety Administration measures domestic parts content ratings across the industry. Amount 58 models with ratings of 75 percent or higher, foreign based automakers produce just eight. Conversely, Detroit automakers produce just 24 of the 140 domestic content ratings of 10 percent or less.
Japan and Korea have closed their markets to American cars so they can protect their jobs and their industries, so why would we help them? It doesn't matter if a car is "assembled" in the USA, the parts come from overseas and the profits all go back to their country and their tax payers. Toyota just received a bailout from their government and in the 80's the government had to give them HUGE amounts of cash to help them. If it weren't for the Japanese government, Toyota and Honda would have gone under years ago.
Also, I just watched the news and Toyota's are very dangerous and are being recalled. The problem with the accelerator is not related to the floor mat, it is a computer problem. Cars are speeding up to 100 miles per hour and people are crashing and dying all over. It is also a fact, that they are going to open about 300 cases involving Toyota's roll overs because Toyota intentionally destroyed their crash tests. These are two different problems, but they are both very serious. It was just on the news about an hour ago..and I wouldn't be caught in a Toyota today..I wouldn't let my family in one either. They are death traps...
11-03-2009 @ 6:59PM
md said...
You need to get your facts straight about the auto industries "donations" after 9/11.... im sure you read it in a chain email, i did, but unlike you i checked it out before quoting it and as it turns out, it was all false.... look it up on Snopes.com my man.....
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