Wednesday, August 02, 2006

Toyota Jumps Ford in Sales

Toyota recently jumped Ford to take the #2 spot for auto sales in July. Ford passenger car sales are actually up 3.2% over last year but their light truck sales are down a staggering 16.2% over last year. Meanwhile Toyota passenger car and light truck sales are up 12.5% and 8.4%, respectively.

Are the SUV and daily driver pickup truck finally starting to die? The F-Series pickup truck sales were down 45.6%! Explorer sales were also off. Then again, Toyota's SUVs didn't seem to have issue selling.

Toyota also has a significant advantage in the minivan market. The Ford Freestar just isn't selling like the Windstar did and Toyota's Sienna is still meeting demand after the run on them two years ago.

Another factor that can't be ignored is that Toyota is the current leader in hybrid sales. The president of Toyota North America recently said his company has sold more U.S. hybrids this year than Cadillac, Buick or Mercedes-Benz has sold cars.* On top of that, the Toyota hybrids are selling at $500 - $1000 over sticker price! Just think about that for a minute. That's pretty astounding.

It looks like Ford and GM are finally going to play catch-up with the hybrids in the coming year or two but by that time they won't have long until Toyota brings out its plug-in hybrid that can be charged over night and deliver somewhere in the neighborhood of 100 MPG or more.

Other gas-conscious auto makers are also increasing their sales over last year. Hyundai is one of them. When we bought our Elantra at the end of 2004, we got it for about $500 under invoice (or about $2000 under sticker). Now the best deal you can find is about $500 under sticker price. Kia is even getting a bump in sales despite their (mostly-perceived) quality control issues.

On the other side of the coin, now is the time to buy the gas-guzzling SUV of your choice. When my wife and I were car shopping, we seriously looked at the Highlander hybrid but had to turn it down because we could get the Jeep Commander at about $6000 less despite their similar sticker prices. I just didn't see us saving $6000 in gas over the life of the vehicle, especially since the Commander only gets driven an average of 5 to 10 miles per day and sometimes more on weekends. You can also get a Ford Expedition right now for $10,000 under sticker but I'm still a little sore at the Expedition for replacing the best SUV ever made.** And poor Dodge picked the wrong time to upsize the Durango so those are selling pretty cheap as well as long as you're ok with an SUV that looks more like a short bus with roughly the same visibility.

So what are your thoughts on current car sales trends? Are SUVs going the way of the muscle car? Are hybrids going to rule the streets? Will American auto makers once again going to have to regroup and shift direction like they did in the early 90's? Is there really any such thing anymore as an "American Auto Maker?" Most of the folks I know who work for an automobile manufacturer work for Toyota and they're working right here in the US.

* Quote not in the acticle. I'm currently verifying this since I've seen it mentioned in multiple places but can't find the actual press release, speech, or interview where this was said.

** That would be the Bronco for those of you playing at home.


S.A.W.B. said...

Until soccer moms and their contractor sugar daddies run out of money, the SUVs and large daily driver pickups are here to stay. That said, it may well not be one of the Big Three's SUVs that they drive. Having driven a wide array of Big Three products over my driving lifetime, I feel comfortable in saying that with few exceptions, they are all hunks of crap.

The Oldsmobile/Chrysler divisions of GM put out some of the worst cars ever to hit the American roads. I should know, being that I had three fall apart on me.

Getting somewhat back on topic, the big burn that is hitting the big three is twofold. First, a great many of the import brands now assemble the cars here in the US. So, one is no longer supporting the Japanese local economy by buying a Toyota or Honda. Meanwhile, the Big Three have started to ship assembly operations south of the border, in an effort to curb costs, and put pressure on the UAW to be somewhat reasonable at the negotiating table. Which leads us to the second issue facing the Big Three.

The UAW is a bloated, tired, old machine, that is sucking the life out of the Big Three the way a sorority girl sucks down Bud Light at a tailgate. Granted, it's the fault of the Big Three for kowtowing to the generally outlandish demands of the UAW, but the UAW doesn't want any of the blame for the current situation, nor do they want to negotiate a way out of the mess they've created.

Patrick Armstrong said...

As long as gasoline prices keep scaling upwards, smaller cars will continue to be considered by those who don't actually need SUV's and pickups for practical activities.

Right now, the money you save on such vehicles does offset the prices of gasoline over the life of the vehicle, but gasoline prices are in a constant state of flux, and those prices will continue to trend upward.

I'd wager that the current batch of gas guzzlers will begin to drop as manufacturers make less of them in response to dropping demand.

They will always be around because of their utility (muscle cars had aesthetic appeal that wore off for whatever reason). You just can't haul queen sized mattresses or motorboats with Camaros or Civics.

As far as the cheap-labor conservative claim that the UAW is sucking the life out of the big three, are Toyotas & Hondas not made by union labor? While I will never understand the idea that both unions and management continue to demand higher pay in times of trouble - all at the expense of their overall mutual goal of continued employment, I cannot help but wonder if Toyota and Honda don't have a more efficient manufacturing infrastructure that offsets costs outside the HR realm.

Fishplate said...

are Toyotas & Hondas not made by union labor?

It's my understanding that the "foreign" manufacturers built plants in the South for a reason.

Dante said...

"The Oldsmobile/Chrysler divisions of GM..."

Not exactly Mr Current Events, are we? Oldsmobile has been phased out for a couple of years now and Chrysler is part of Dailmer-Chrysler, not GM. I think Buick is now the closest hunk of crap to the stuff you're referring to.

I wouldn't say they're mostly hunks of crap but I will say that they were mostly hunks of crap. Reliability and safety is pretty much standard on all cars now. There are issues here and there but nothing like it used to be. There are no AMC dealers touching up paint on the lot because the body is already starting to rust. There are no really bad engines like the GMC 2.7L V6 that leaked oil on the dealer lots. And there is nothing around in today's world that can compare to the horror of the 90's models Grand Cherokee automatic transmissions before they moved to the 45RFE. Even the Toyota 5-speed automatic debacle was merely a matter of adjusting shift points instead of having to rebuild an entire transmission for every four or five sold.

"I cannot help but wonder if Toyota and Honda don't have a more efficient manufacturing infrastructure that offsets costs outside the HR realm."

That was true in the 80's but the Big Three copied a lot of the modular design concepts the foreign auto makers brought to the table. As far as their overall processes go, the only thing that really holds the Big Three back from being equal to their foreign counterparts is the Big Three's reluctance to let go of workers whose jobs are now done quite handily by machines.

Also, as fishplate kind of alluded to, Toyota and Honda put all of their plants in at will employment states. That doesn't mean that there aren't unions there but it does mean that the unions lose a lot of their bite. You'll never see Toyota, Honda, or Dailmer-Chrysler open up shop in Michigan or Pennsylvania.

Patrick Armstrong said...

But Honda will open up a plant in Indiana. mmmkay.

Patrick Armstrong said...

Oh yeah, things like this help.

patsbrother said...

The last two times I filled up my car were also the two most expensive fill-ups of my life, at $37 and $38 respectfully. While that may be the norm for some of you tank-dwellers, that's shocking for someone who drives a four-cylinder.

Never in my life have I been persnickity enough to want a brand-new off-the-lot vehicle, but today I predict that the first large purchase I will make after obtaining my first post-JD jobby-job will be whatever vehicle that then gets the highest mpg but doesn't break the bank.

S.A.W.B. said...

Thanks for the Ford Recall link, paT, as my Exploder is the model year listed. Ford has a tendency to not notify me of recalls...

PB, I feel very comfortable in saying, that unless you purchase a high-mileage 4 door sedan, not only is the entire office going to laugh at you, but your boss(es) might make you go purchase something suitable for business...just keep that in mind.

Dante said...

Chrysler if probably happy about the Ford news. It makes their recall not look as bad. And for what it's worth 1.2 million vehicles recalled is small potatoes compared to Datsun's * most recent recall.

* I know it's the old name but they'll always be Datsun to me.

Patrick Armstrong said...

If I was management of a company that had to recall 1.2 million of anything, I would be losing my brain right now trying to figure out why the company can't build a better widget.

Needless to say, it would be time for an overhaul.

And I was going to make a snide comment about Sprout's future vespa and how noone he ends up prosecuting will take him seriously, but my Google search turned up something of far greater value....