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.
THE NOT SO BAD
Taking the industry-wide figure of -27% as the baseline, some brands saw only modest January declines:
All three models were essentially flat month-to-month. Unfortunately, the brand overall has settled out at a level 50% below a year ago, with the xD slightly stronger than the others.
Both niche sports car makers declined only slightly last month and are off by roughly one quarter versus a year ago. Not bad in this context.
Mainstream Japanese makes didn’t suffer hugely, but the continued declines still were enough for Toyota and Nissan to forecast losses for 2009. Nissan is enjoying gains for the new Z and a relatively strong Versa, against weakness in the Altima and Maxima; the Rogue is up and the Murano is still solid, but the rest of Nissan’s truck and SUV entries are a shadow of their former selves. Infiniti made gains with the EX35 and the FX, and its car entries generally are in good shape; only the QX56 is in full-fledged collapse. At Mazda, the new 3 is making headway but the new 6 is not; the CX9 is recovering and the 5 is still healthy, while the Tribute and the B-series pickup are increasingly pointless. At Toyota, the Corolla/Matrix is the bright spot in the car lineup, but the Yaris looks bad and the Prius has slipped (ahead of the arrival of the new version); the Camry is softening and the Avalon looks weak; the truck/SUV situation is bad across the board, except for the not-so-bad RAV4. Honda’s Fit continues to power ahead, while the Civic and Accord sag; the Pilot and the CR-V aren’t hurting quite as much as the Odyssey, the Element, and the Ridgeline.
Land Rover -23%
Given the recent past, it’s surprising to see Buick, Land Rover, and Porsche in a not-so-bad position. Still, Buick sales are nearly half last year’s levels, with the Enclave the strongest entry. Depressingly, the Cayenne is the most resilient model at Porsche, with the Cayman faring worst among the brand’s sports cars. (Land Rover does not break out sales by model.)
Smart’s month-to-month decline is unfortunate, but the brand still more than doubled its sales from last January. Volkwagen has been enjoying a boost from several new models: the CC, the Routan, and the Tiguan, plus strong Jetta sales (goosed by the Sportwagen and the TDI).
WHAT’S REALLY BAD
Again, the average decline from December to January was 27%, so those who did 10 points worse had a pretty scary month.
Bad times for the ultra exotics: Their volumes are tiny (fewer than 100 per month for each), but the pain is real. Maserati had the worst slide last month, but it’s in the best shape year over year (-23%). Ferrari, which had sold more cars than Maserati one year ago, slipped behind it this past January (75 cars to Maserati’s 96, a decline of 44% from last year). Bentley, though, is running at less than one third of last year’s volume (93 cars in January versus 367 last year); the only good news for Bentley is that the Speed version of the Continental GTC convertible is on its way and a new Arnage is in the offing, but the latter is not for nearly another year.
Mainstream luxury marques are taking it in the chin. Although well reviewed, the has not been able to lift the brand’s fortunes. Mercedes-Benz has seen dramatic drop-offs all through its model line: Coupes, like the CL and CLK, are selling at less than half last year’s levels; worse are the roadsters, the SL and SLK; the S-class is off by more than two-thirds, the M-class is almost as bad, and the R-class is at barely one-quarter of previous (low) volumes; at least the GLK appears off to a decent start. Audi’s strong run appears to have run out of steam, with even the new A4 suffering, although the A5 and the R8 posted gains, and the Q5 is arriving at dealers soon. Lexus is the weak link among the three Toyota brands, with the GX470 SUV and the big LS sedans off by more than half versus a year ago; the RX is a bright spot here. Volvo starts off 2009 with another big decline, after a generally wretched 2008; at these levels one has to wonder whether Volvo is destined to remain part of the Ford empire.
After defying gravity throughout 2008 (bolstered by a combination of high gasoline prices in the first half of the year and by the addition of the Clubman body style), Mini took a tumble down to earth in the beginning of 2009. Gasoline that costs a buck-something can’t be helping; maybe a redesigned convertible will.
What discussion of slumping sales would be complete without mention of our suffering domestic brands? GM had the most worrisome January, despite its captive finance arm, GMAC, tiptoeing back into the new-car financing market. At Saturn, the little Astra‘s star performance (four times last year’s sales!) was drowned in the mudslide of bad news from the Aura, the Vue, and the Outlook. Likewise at Pontiac, an uptick in Vibe sales meant little against dramatic declines for the G5 (which maybe wasn’t such a good idea, after all), the Torrent (ditto), and the collapse of the G6. At Chevrolet, the pain and the blame was shared across the lineup (both car and truck), with the strong start for the Traverse the only bit of good news. There is no good news at Hummer, as the nightmare that was 2008 is actually worsening in 2009. At Ford, Mercury was the biggest loser, with only the Mariner and the Milan selling at better than half last year’s rate. Chrysler’s headline brand fared worse than Dodge or Jeep, both of which declined by (only) the industry average for the month. Concerning this month’s sales, Chrysler’s Jim Press might have had the most depressing – and most bracing – comment of all: “We need to recalibrate where the market is and stop dreaming about pent-up demand.” In other words, January may be the new sales reality for some time. But even for that grim scenario to come true, we’ll have to at least see things stabilized in February. We’ll see if that happens.