2010 US Auto Sales May Indicate Brighter 2011
By Chris Haak
The December 2010 US auto sales are in the books, and it was a pretty solid month overall, unless you work for Toyota. Overall, industry light-vehicle sales were up 11.1 percent on the month, and coincidentally, 11.1 percent on the year. Forget all of the talk over the past 12 months about SAAR (seasonally adjusted selling rate); with a full year now under our belts, we know exactly how many cars and trucks were sold. The answer? During 2010, dealers recorded 11,590,274 new-vehicle sales, compared to 10,431,510 new-vehicle sales during all of 2009.
As with any marathon like a year of car sales represents, there were some winners and losers, although there were certainly more winners in 2010 than there were in 2009. Last year, you may recall, only Hyundai and Subaru posted year-over-year sales gains. For 2010, the tables were turned, and all but Toyota and Suzuki lost share, although Suzuki’s loss was far more severe than Toyota’s was. Toyota’s 2010 sales declined by 0.4 percent, and Suzuki’s slid by 38.0 percent.
We all know the reason for Toyota’s sales decline; the recall crisis early in 2010 set the stage for what would prove to be a disappointing year for the world’s largest automaker (at least it holds that title for the time being; it remains to be seen whether that holds true for 2010). Consumers lost confidence in Toyota and its safety record was called into question. Without safety and reliability to hang its hat on, Toyota was forced to discount its vehicles, which was effective for a time, but the company has clearly lost its luster with many consumers. Toyota’s marketshare plummeted from 17.0 percent in 2009 to just 15.2 percent in 2010.
Suzuki is just too small of a player to make much of a splash in the US market. The small Japanese automaker has a very limited lineup, with only the Kizashi midsize sedan, the compact SX4, the Grand Vitara compact SUV, and the Equator pickup, which is a slow-selling rebadged version of the Nissan Frontier.
General Motors’ 6.8 percent gain for 2010 and its 8 percent gain for December 2010 is somewhat impressive, given the fact that the year-over-year comparisons are pitting the four “core brands” (Chevrolet, Cadillac, GMC, and Buick) against the eight-brand “Old GM” (those four, plus Saab, Saturn, Pontiac, and Hummer). GM likes to tout only its core brand sales gains, but although that may seem to be a more accurate comparison on its face, it’s ignoring the fact that several orphaned Pontiac and Saturn owners will probably consider Buicks and Chevrolets.
Buick has been a success story for GM this year, with sales up over 50 percent on the back of the well-received LaCrosse, the new Regal, and the aging-but-competitive Enclave crossover. GMC’s sales have been boosted by a strengthening of the truck market generally, as well as the popularity of its Terrain compact crossover. Chevrolet’s Equinox has been a sales success for that division, and SRX sales, and to a lesser degree CTS sales, have driven Cadillac’s growth. Despite its gains, however, GM still lost marketshare, as its 6.8 percent gain was only a little more than half of the industry’s 11.1 percent clip. The General’s market share dropped from 19.9 percent in 2009 to 19.1 percent last year.
On the other side of the marketshare spectrum, Ford grabbed share from GM, Toyota, and Honda, as buyers flocked the only bailout-free domestic automaker. The Blue Oval’s share went from 16.1 percent to 16.9 percent, which is an impressive gain for a single year in a mature market. Ford no doubt was able to capitalize on its strength in trucks, with F-Series sales continuing to lead the way, and also was able to take advantage of Toyota’s problems.
Honda had a somewhat disappointing year, losing market share (from 11.0 percent to 10.6 percent) on the back of a 6.9 percent sales gain. Many analysts predicted that Honda would be in a good position to capture defecting Toyota buyers amid Toyota’s recall crisis, but the Japanese powerhouse was unable to pull it together for most of the year. Perhaps questionable design was to blame, particularly in the company’s near-luxury Acura brand, where non-buyers cited styling as their number one reason for not buying an Acura. In December, however, Honda had a good showing, with sales climbing 21.1 percent.
Chrysler Group, easily the US automaker with the most-shaky health entering 2010, rode a substantial number of fleet sales early in the year, then some key new-model introductions later in the year to improve its share over a terrible showing in 2009, seeing it climb from 8.9 percent to 9.4 percent. Chrysler’s sales increased 16.4 percent in December and 16.5 percent in 2010 vs. 2009. The Jeep Grand Cherokee has proven popular with both critics and consumers, and if fuel prices can stay reasonably low (a big if, mind you), it should help put money in the Pentastar brand’s coffers during 2011. The new Dodge Durango, plus the refreshed Sebring 200 sedan, 300, Charger, Challenger, and the Fiat 500 should help boost 2011 sales, then late in 2011, we will begin to see more Fiat-influenced small cars to increase the company’s competitiveness in that important segment.
Nissan also managed to grab some of Toyota’s share, with its share going up from 7.4 percent to 7.8 percent. Its results are somewhat impressive considering there were not many new-model launches for Nissan over the past year. The new Infiniti M helped results, with sales up 72 percent over 2009’s levels, and the aging G had a nice showing, with coupe sales up 11.3 percent and sedan sales up 28.7 percent. The new QX56 was up 85.1 percent over the former model’s results from 2009, and the truck lineup showed strength as well. The Nissan Juke, launched toward the end of the year, tallied 8,639 sales, which helped a bit.
Korean powerhouse Hyundai had an impressive December, with sales increasing 37.2 percent, and that was enough to give Hyundai/Kia a 21.7 percent growth rate over 2009’s results. Hyundai/Kia’s US marketshare grew from 7.0 percent to 7.7 percent, thanks in large part to successful launches of the Hyundai Sonata, Kia Optima, Kia Sorento, and Kia Sportage. The Kia Forte has also been a source of strength, as has the quirky Soul.
Intent on world domination, German giant Volkswagen had good year in the US, with sales growing 21 percent (including Audi, Bentley, VW, Lamborghini, Bugatti, etc.), and seeing its marketshare increase from 2.9 percent 2o 3.1 percent. Still, VW has a long climb ahead if it hopes to sell a million vehicles in the US by 2018. Rumor is, the company is ahead of its plan so far, so maybe we shouldn’t laugh. Digging into the numbers a bit, VW can thank the Rabbit/Golf/GTI/R32 (up 79.6 percent) and the Tiguan crossover (up 50.7 percent) for most of its sales success during 2010, with the other models falling behind the pace set by Volkswagen’s overall sales gain. Audi sales gains were driven by the A3 (up 69.3 percent), A5 (up 67.1 percent), A6 (up 27.8 percent), and Q5 (up a staggering 70.5 percent).
Rounding out the other large and mid-size automakers, BMW (including Mini) was up 9.9 percent on the year and 16.8 percent for December, Subaru was up 21.8 percent on the year and 15.7 percent in December, and Daimler AG (including smart) was up 12.5 percent on the year and 5.4 percent in December. Also, Mazda was up 10.5 percent on the year and 17.7 percent in December, Jaguar Land Rover was up 18.1 percent on the year and just 0.7 percent in December, and Mitsubishi was up 3.1 percent in 2010 and up 11.9 percent in December.
The final tally for 2011 auto sales is really anyone’s guess, but surely, a lot depends on the economy. If the economy continues to crawl out of the Great Recession, then we may see another million sales, up to about 12.5 million. One economist speculated that for every point on the national unemployment rate above 6 percent, we lose a million new-car sales per year. So, with unemployment currently hovering around 10 percent, if it goes down one percentage point, that would give us a million sales. Since this economic recovery seems to be slow to deliver new jobs, auto sales may not grow quite as quickly as many in the industrywould have hoped. But if they do grow about 10 percent as expected, the restructured automakers, with newly slimmed-down operations, should be making moneyhand-over-fist. And that would be a good thing for the US Treasury, who hopes to see GM’s share price climb so that it can get out of its investment. Chrysler would surely like to see some strong sales to bolster its case to investors for a mid-2011 IPO as well.