After a disastrous October, November, and December, January clocked in as the worst month yet for auto sales (the worst since 1982). The annualized selling rate was less than 10 million vehicles. To put that into perspective, the early years of this decade had seen as many as 17 million new cars sold.
Sales were down 27% from December's anemic pace, with every nameplate save Kia, Hyundai, and Suzuki showing declines. As bad as it was, however, some of that drop-off was a naturally occurring December-to-January phenomenon. A year ago, for instance, sales dropped by a similar 25% after the new year. As anyone who watches TV knows, the end of the year has become a major car sales time, with a flurry of incentives (and the advertising thereof), as the calendar year draws to a close. Unfortunately, this year the January drop was from the already historically low levels in December. Who knew sales had further to fall?
Well, daily headlines of layoffs by the thousands - and tens of thousands - did provide a clue. Buying a new car is not something most people do when they've just been laid off - or if they fear that they might be. Which explains why Hyundai was one of the few brands to see a sales uptick in January, with its Lose Your Job and We'll Buy Back the Car guarantee. But Hyundai's 5% increase over December was dwarfed by its sister brand, Kia, which saw sales skyrocket 51% (!) on the back of good, old-fashioned incentives. Kia, by the way, is not participating in Hyundai's job-loss guarantee promotion.
Other brands that were able to avoid the January Effect were Mitsubishi (+4%) and Suzuki (essentially flat).
Looking at '09 versus '08, January-to-January, Hyundai and Kia again both posted gains, as did Smart and Subaru. Everyone else was worse off this year than last.
That's been true for the past few months. It's actually more interesting to look at January versus December, to see who is still plummeting and who had a relatively mild ride down.