Sales of new vehicles dropped seven percent in February and the pain was widespread as General Motors, Ford, Chrysler, Toyota, Nissan and BMW all reported declines in sales.
Mitsubishi, Kia and Hyundai and Audi were on the losing end of sales, too--but Honda, Mercedes-Benz, Volkswagen (thanks to the Rabbit), and Mazda eked out sales gains despite the low seasonally-adjusted sales rate of roughly 15.3 million units, which was at the lower end of most forecasts.
“It was a somewhat difficult month for the industry,” said Toyota’s Irv Miller. “Traffic was soft.”
The biggest losers were Chrysler and GM. Chrysler reported its sales dropped 14 percent, while GM said its sales dropped 13 percent. Both companies announced significant new incentive plans to stimulate sales during March. Mark LaNeve, GM vice president of sales, service and marketing, said GM will rev up its annual “March Madness” incentives to accompany its sponsorship of NCAA playoffs, while Chrysler announced plans for a new zero-percent financing campaign.
LaNeve also emphasized that GM believed the drop in sales was only temporary.
“Our new launch vehicles, including the award-winning Chevrolet Malibu and Cadillac CTS, had a sensational month, as did the Chevrolet Cobalt, Saturn Aura, and the Pontiac G6....Most importantly, despite tough market conditions, we anticipate our total retail vehicle sales share to have remained flat for the first two months of the year compared to 2007,” he said.
Other carmakers also said consumers were moving towards smaller vehicles.
Toyota, meanwhile, reported its sales dropped 6.3 percent during February while the Lexus Division reported a 9.3-percent drop in sales from year ago levels. One eye-catching number from Toyota was the 14.5-percent decline in Prius sales. Executives insisted that Prius sales are still healthy and the decline was due, in part to a difficult month-to month comparison. They also noted the sales of the Camry hybrid increased last month, as did those of the Tundra.
Honda sales were essentially flat during February as the Japanese automaker posted a gain of less than 1 percent.
Nissan reported a 2.9-percent drop.
Chrysler reported its total sales dropped to just over 150,000 units during February. Sales were paced by the Dodge Caliber, which has hardly been a star performer since its introduction last year. Chrysler vice chairman Jim Press, however, insisted there were grounds for optimism despite the woeful numbers.
“While the auto industry is experiencing the impact of slow economic growth, Chrysler LLC February results reflect progress within each brand,” Press said. “The positive numbers for Dodge cars, the all-new Chrysler Town & Country and the Jeep Patriot prove our renewed focus on consumer feedback, such as the demand for good fuel economy, is resonating -- and translating into sales of our New Day Value Packages."
Ford sales also dropped 7 percent. But Ford officials said almost all of the decline was due to a drop in fleet sales. Jim Farley, the executive now responsible for Ford sales and marketing, also said the company’s retail sales continued to show promise. The fact the new Ford Focus has done exceptionally well since its introduction bodes well for Ford’s strategy of putting more small cars into the market, he said. Ford’s market share is now tracking in the upper range of the company’s basic guidance thanks to a strong showing in passenger cars, he also noted.
“We have escalated some incentives in some regions. But overall our spending was lower than last year,” Farley said.