October Auto Sales Screech to a Halt

“You can’t have an automobile industry without a functioning credit market.” So said GM chief sales analyst Michael DiGiovanni, on Bloomberg radio. “This is an industry that runs on credit.” That’s been the case ever since the 1920s, when GMAC, one of the first automaker-owned financing companies, began to popularize the idea of buying a car “on time”. Now, ironically, a dramatically weakened GMAC (which has suffered billions in losses on subprime home loans as well as losses from over-optimistic residual values on returning off-lease vehicles) is a significant factor in dragging down GM sales. GMAC followed Chrysler‘s captive financing arm by quitting the automotive lease market, and in October began restricting auto loans to only those customers with top credit scores (shutting out roughly 2 out of 3 buyers).

Of course, the Wall Street meltdown and attendant consumer credit freeze – not to mention tens of thousands of pink slips handed down in October – didn’t just affect GM, or the domestic auto makers. The whole industry suffered. Total new car and truck sales were 838,156, an annualized rate of 10.56 million, the worst since the depths of the 1982 recession. Ford‘s George Pipas noted that “[At that rate], there are no hot segments or hot products.”

He’s largely correct. Thus, we’re skipping our usual model-by-model rundown of winners and losers. Instead, we’ll attempt to give more of an aerial view of the carnage, with a look at each of the major automakers.

General Motors -45%
Cadillac -55%
Buick -46%
Pontiac -48%
Saturn -55%
Chevrolet -40%
Hummer -65%
Saab -13%
Highs: Malibu +82%, Vibe +6%, full-size pickups
Lows: LaCrosse -49%, DTS -70%, STS -66%, Aveo -50%, Cobalt -61%, G5 -68%, Solstice -69%, Tahoe -77%, Suburban -70%, Envoy -78%
The aforementioned end of GMAC leases plus the much stricter lending standards, combined with an end to September’s Employee Pricing sale, all but shut down GM sales in October, and the company saw deliveries plunge by 45 percent. And 1/3 of the cars it did move were dumped into fleets. “It was like someone turned off the lights in the month of October,” said GM’s Mark LaNeve. Malibu retail sales were a bright spot; full-size pickups weren’t too bad; and the Saab 9-3 did a little better than it had been. To get things moving again, GM is expected to crank up its traditional, end of the year Red Tag Sale in early November, long before its usual Thanksgiving weekend start time, and to put red tags on Cadillacs, Saabs, and Hummers too.

Toyota division -20%
Lexus -35%
Scion -38%
Highs: Corolla +2%, Sequoia +16%, LX470 +371% (on small volume)
Lows: Tundra -65%, LS -51%, xB -43%
For proof that even the strong were laid low in October, look no further than Toyota. Mighty Toyota suffered a hefty sales drop, despite zero percent financing (from its still-viable finance arm). The Tundra is looking particularly weak – and that’s before Ford‘s freshened F-series was even out of the gate. The poor performance of the is also alarming, since this is a relatively fresh model in what has been a hot segment. At Lexus, the figures get worse the higher one moves up the price ladder, with the LS turning in the worst performance and the IS looking the strongest, although still down. One tiny but very bright light was the LX570, where an additional 451 sales allowed it to nearly quadruple its predecessor’s October, even as its sibling, the Land Cruiser, was off.

Chrysler division -51%
Dodge -27%
Jeep -33%
Highs: Viper +142% (too bad it’s for sale), Crossfire +128% (too bad it’s dead)
Lows: 300 –62%, Compass -62%, Dakota -70%, the desperate merger talk
The rest of the industry caught up to Chrysler in October, in terms of nose-diving sales amid massive incentives. But Chrysler remains a special case due to the sickly smell of death that emanates from CEO Bob Nardelli and the Cerberus brain trust. The desperate attempt to offload Chrysler onto GM makes it – and, by extension, its products – seem all the more like damaged goods. Among the bad omens coming out of Chrysler this month was the news that it would stop production of its first hybrids, the and Chrysler Aspen SUVS, only weeks after launching them, because it’s closing the factory where they’re made. The announcement, although distressing, didn’t materially affect sales, of course (the hybrid SUVs are produced only in small quantities). All models – save the run-out Crossfire and the Viper – suffered declines, although the company portrayed Ram sales (-29%, selling mostly the ’08 version) as relatively robust, and noted that sales were slightly better than last month and are up significantly year-to-date.

FORD -30%
Ford -28%
Mercury -47%
Lincoln -28%
Mazda -26%
Volvo -52%
Highs: Mazda5 +244%, Fusion -3%
Lows: Taurus -53%, Explorer -59%, MKX -61%, Edge -58%, XC70 -55%, C30 -50%
Although off from last year, the F-series has bounced back from its spring lows and the ’09 model is just coming into showrooms. The Fusion was off only slightly and it received a boost from Consumers Reports. Ford’s SUV sales were down by half, but that’s about par for the SUV course. More distressing is that the Edge and the MKZ are struggling, and the Flex is off to a very slow start, probably due to price resistance. Mazda’s CX-7 and CX-9 crossovers are slumping too, both down more than 40%. But the Mazda5 minivan is absolutely on fire, more than doubling this month and up more than 50 percent year to date. Volvo, in contrast, is ice cold. Even its newest products, the V70/XC70 and the C30, have seen sales slow to a crawl. Finally, the Town Car had a huge month, thanks to livery fleets.

Nissan division -34%
Infiniti -29%
Highs: Maxima +33%, Rogue +11%, Versa +3%
Lows: Titan –80%, Xterra -77%, Pathfinder -78%, Armada -79%, Quest -79%
Infiniti suffered across the board, mitigated only slightly by the addition of the EX35, which is off to a slow start, although it posted better numbers than the tanking QX56. Nissan’s car sales aren’t horrible, aided by a strong start for the new Maxima, but its truck and SUV sales are a horror show – even in the context of a crumbling market. Nissan has already acknowledged that it won’t bother to develop a next-generation Titan; instead it will adapt the Dodge Ram for Nissan duty (although it’s possible a Chrysler merger/sale/bankruptcy could potentially upend those plans). In an attempt to cash in on Americans’ downward mobility, Nissan just introduced a new, lower-priced version of its Versa subcompact, with a smaller, 1.6-liter engine and reduced content. Its $10,685 base sticker (including destination) makes it the lowest priced car in America.

HONDA -28%
Honda division -28%
Acura -25%
Highs: Fit +28%, TL +22%
Lows: RDX -68%, TSX -23%, Accord -38%
Honda’s fuel-sipping Fit, bolstered by a new redesign, continues to be strong. The Accord fell back but the Pilot saw only a minor slowdown. Acura’s mainstay TL enjoyed a boost from its a redesign but the TSX, also new for ’09, did not. And the RDX compact crossover is slipping under the waves, with sales less than 1/3 of what they were a year ago.

Hyundai -31%
Kia -39%
Highs: Sorrento +0%
Lows: Veracruz -54%, Tucson -67%, Elantra -44%, Sportage -68%
The Koreans, which had been enjoying sales gains earlier in the year, cooled considerably in October. The fallout from tougher lending standards likely overwhelmed any boost they might have gotten from the Walmart effect, whereby economically pinched customers trade down to bargain labels. In October, they didn’t trade down; they just didn’t buy cars at all.

BMW GROUP -5% (not counting Rolls-Royce)
BMW division -14%
Mini +56%
Rolls-Royce N/A
Highs: Mini!
Lows: Z4 -48%
BMW was down only slightly in October, which translates into pretty much the best performance in the industry. The Mini brand was working exactly as it should, counterbalancing BMW. The standard Mini was up 24%, and the addition of the Clubman drove the brand’s sales total up 56%. Over at BMW, sales declines were relatively minor; the aging Z4 fared worst.

Mercedes-Benz -34%
Smart N/A
Highs: M-class +7%
Lows: C-class -40%, CLS -65%, E-class -50%
Even the rich are not immune, as the sales data from Mercedes-Benz confirms. Only the M-class was able to make any headway in October, aided by the availability of a new, 50-state diesel engine. The new C-class, which had been running well ahead of last year, saw a big drop, and the E- and CLS-class models, both coming near the end of their life cycle, were off significantly. Smart, which only started deliveries in January, added 2238 cars, or about 13%, to the U.S. total for Daimler-Benz.

VW division -8%
Audi +0%
Bentley N/A
Highs: A4 +8%, A5 +472%, R8 +217%
Lows: Passat -55%, Rabbit/GTI/R32 -43%, A3 -46%
At Volkswagen, the addition of the Jetta wagon, the Tiguan, the Routan, and the CC added almost as many sales as were lost by the carryover models, particularly the Passat and the Rabbit/GTI/R32. Similarly, at Audi, the increased availability of the A5 and R8 (both just coming on stream last October), offset declines for the TT, the Q7, and (perhaps most surprisingly) the A3. The redesigned A4, however, is off to a good start despite the grim economy. And while we’re on the subject of spiting the grim economy, Bentley is bringing out a limited run of Arnage Final Series sedans, just in time to find its natural audience, Wall Streeters, out on their window ledges. Good thing Bentley is only making 150 of them.