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2005: The Sales Year in Review


 

 

 

As usual, the reports of car and truck sales figures for the calendar year just past have some surprises and more than a few confirmations of trends seen all year long.

 

But first consider some historical observations, since that is my bag, and to put in proper perspective the mass media and trade stories about 2005 vehicle sales you’ve already likely been reading the past few days.

 

Time was when the news concerned Model Year (MY) sales, because all the automakers basically introduced their new models at the same time, October 1st give or take a couple of weeks, and this gave auto writers an opportunity to report on the MY sales horse race well in advance of Calendar Year (CY) numbers.

 

Further, back in the old days of the auto beat, the CY numbers relied on compilations of state new-vehicle registrations, which were considered sacrosanct – and they weren’t available for a couple of months after December 31.

 

Some fifty years ago, reliability of registration data came into question because the intense sales race between Chevy and Ford resulted in some “doping of the horses.” It was alleged that one or the other or perhaps both of the car divisions—eyeing a close, ballot-box-stuffable contest—had urged their dealers to “register as sold” every new vehicle held in inventory as of the last working day of the old year. And back then, the only sales that anyone really argued about were those of cars. Trucks, labeled “commercial vehicles,” were pretty much ignored.

 

A different world

 

It’s a different world today, even among the sales-race handicappers. For one thing, nobody knows what a car is anymore. The classic example is the PT Cruiser, which for fuel economy regulation purposes is counted as a truck (see more on this debate below). So for the last decade or so, what has counted is the total of both cars and trucks, whatever they may be. And then there are “crossovers,” which seem to be evolving as yet a new vehicle class.

 

Automotive journalists now have to rely on what the auto companies – and the Wall Street and consultant watchdogs – report. But wait, that’s not necessarily so reliable either. In CY 1998, Lincoln actually outsold Cadillac, but Cadillac cooked its books a bit to report it had won the contest.Lincoln protested and a couple of months later, Cadillac had to come clean, the Ford Motor division having triumphed over the traditional luxury class brand, 187,121 to 182,570, according to Automotive News.

 

Now all that seems moot, since the top-selling cars are imports – but are swamped by the top trucks in sales – and the so-called luxury class (now loaded with “trucks,” too) also belongs to import brands.

 

Overall, it appears from early reports that car sales were up about 3.5 percent in 2005 over 2004, while truck sales declined by about 2.5 percent. However, about 1.2 million more trucks will have been sold than cars. The total U.S. vehicle market will have been very slightly higher, and all things considered, that’s not bad at all, even if it hasn’t been very profitable for the domestics.

 

Throughout this report, I am going to concentrate on unit differences rather than percentage changes or market shares, because vehicles are sold—except for fleets—one by one, and it is the revenue from each one as well as their volume of sales that counts. Big percentage gains or losses matter little if the volume numbers are small, excepting of course the high-priced exotics.

 

Cars claw their way back

 

As already reported, 2005 was the first time since 1992 that cars gained market share against “trucks.”

 

Even though it’s not like the old days – say 1954, when for all practical purposes, there was only one Chevrolet model and one Ford model – news attention was properly focused on the sales rivalry between Chevrolet and Ford divisions. Despite talk that this year Ford would make a last-ditch attempt to overcome a brand deficit of 9,300 out of nearly five million vehicles sold by the two makes as of the end of November, at year end Chevrolet had “won” over Ford, 2,669,932 to 2,648,814, according to the makers’ own reports. The Chevy victory regained the lead for the first time in 19 years.

 

Indeed, Ford has been taking a beating in the media lately because of the collapse of its profitable truck sales. But this ignores two facts: (1) Ford brand car sales, boosted by Five Hundred and Mustang, were 58,000 ahead of 2004 at 742,423 and (2) the Ford F-Series remains far and away the best-selling vehicle in the U.S., posting 901,463 retail deliveries in 2005, well ahead of the 769,166 sales of Chevrolet’s full-sized pickups and Camry’s 431,703, the next two closest.

 

The Ford Five Hundred with sales of 108,000 shows that it is gaining speed, but it’s a long way from replacing the soon-to-be-discontinued Taurus contribution, much less catching up with Chrysler 300. However, the derivative Freestyle crossover produced some 77,000 deliveries in 2005, counted in the truck column. Ford Motor’s other new sedans–Fusion, Milan and Zephyr–are just reaching the market and, while positive, had little effect on year 2005 sales beyond their 12,000 total contribution the last couple of months.

 

The Ford company’s other divisions have turned in uneven performances. Lincoln lagged by about 16,000 year-to-year at 123,207, while Mercury ended up 2,500 ahead at 195,949. Montego contributed 27,007 sales and the Mariner crossover, 34,099.

 

Among Ford’s imports, Jaguar’s sales of 30,424 were off a third from the year before, Volvo at 123,587 has dropped about the same number of units as Lincoln , but Land Rover gained more than 10,000 to 46,175 on the strength of the Range Rover Sport and the LR3. Ford-controlled Mazda finished not quite even with 258,339 deliveries, cars buoyed ahead by the Mazda3 and trucks behind.

 

Overall, the Ford company’s 2005 domestic sales (not counting Mazda) wound up at 3,168,156, down 163,520 from 2004. The big drop, as noted all over, was in Ford trucks, with Explorer alone losing 100,000 in volume.

 

Domestics grapple it out

 

All this overlooks what I and many others think is the significant “domestic brand” sales effort of 2005: the particular success of the Chrysler brand, which gained nearly 60,000 units to 649,293. The continuing popularity of the 300 – up 31,000 to 144,068 – is well recognized (though it may be faltering), but few analysts and auto writers seem to have noticed two other outstanding performers, the PT Cruiser and the Town & Country minivan, both well ahead of the year-before even though hardly new. At 133,740, the PT gained some 17,000 units while T&C picked up more than 36,000 to 180,759

 

Sister Dodge brand with its broad truck line came to 1,179,008 sales, 10,000 behind 2004 when the old year came to a close. Though boosted by the new Charger’s 44,804 deliveries and the Magnum’s 52,487, up 13,000, Dodge truck sales were off nearly 50,000.

 

Jeep sales posted solid gains over the year before, a plus of nearly 50,000 to total 476,532. The new Commander with 17,000 and a 31,000-unit gain by the Grand Cherokee made the difference.

 

Altogether these domestic DC sales offset what going into December had been a tepid performance of Mercedes in the U.S. market in 2005, which was projected to end up a couple of thousand behind 2004, Benz dealers appeared to have been energized for record December sales of 31,192, to bring the total to 224,421 for the year, also a record. As a whole, DC ended up around 100,000 ahead at a projected 2.53 million. ( Mercedes-Benz USA , like some other importers, did not provide full, comparative numbers with the year-before in its news release.)

 

GM’s shiners

 

Now let’s looks at the performance of General Motors, the focus of so much in-effect hate-America talk lately. While overall sales in 2005 projected at 4.45 million (not counting heavy trucks), some 200,000 units behind, there are some generally unrecognized, especially profitable bright spots.

 

First, however, I feel it necessary to comment on the adverse publicity about Toyota ’s “plan” to out-produce GM in the next year or so. All the hand-wringing or gloating about this fails to recognize that, even if the unit-production race is won by Toyota , on a gross-per-vehicle basis GM will continue to rule the roost. That’s because Toyota ’s strength worldwide is in cheap, er, small cars (albeit well-made). GM’s strong markets are in upscale cars, notably North America, where its sales are roughly twice Toyota ’s. Toyota owns the large Japanese market, primarily tiny cars and trucks that moreover has been “protected” historically by the Japanese government in a variety of ways from substantive import competition.

 

Nevertheless, as the Detroit Free Press headlined “GM: NOT SO FAST, TOYOTA .” GM announced its 2005 worldwide sales as 9.18 million units, up from 8.99 million the year before, a bit more than a million ahead of Toyota ’s global 8.1 million. Makes one wonder what motivated Toyota to make its “throwing down the gauntlet” prediction it would surpass GM – or was it all new media hype?

 

I also think the Wall Street sharks have been leading the frenzy about GM, hoping to benefit from sell-offs of any more of GM’s separable assets, such as GMAC. My crystal ball is no less cloudy than anyone else’s, but I think this simply ain’t gonna happen. Get lost, Wall Street.

 

Turning to GM’s widely ignored successes, let’s start small with the biggest – HUMMERs. Led by the new H3, HUMMER ended up with 56,727 sales, nearly double the year before. Yet all you hear about is the Toyota Prius, its sales being subsidized by several states and the Feds, which ended the year at 107,897, double 2004 and admittedly capacity-restrained. Personally I think both are relatively small-number fads, and therefore capable of disappearing almost overnight.

 

Cadillac is the other sales success story, with projected car sales of 160,859, up almost 20,000. Cadillac “trucks,” like much of the rest of the industry, have suffered from gas-price-fright – or perhaps it is rationality – so overall brand sales at 235,002 were just a hair ahead of ’04. But compare that to the roughly 123,000 for once archrival Lincoln, which as noted outsold Caddy only a few years ago. The Cadillac team deserves more than just a pat on the back.

 

As I have commented previously in these occasional sales analyses, the industry’s sleeper has been the Chevrolet Impala, which until this year had steadily gained each year since its 1999 re-intro as a mid-size sedan. Impala’s sales were off in 2005, but at 246,481, it again was the best-selling domestic car. How many people know that? Chevrolet cars overall came in at 866,212, more than 50,000 short of the year before, despite plus performances by the newer entries, the Aveo, Cobalt and Malibu .

 

Somebody is going to have to explain to me how come HHR is counted as a car by industry watcher Automotive News while it counts the PT Cruiser as a truck. On the other hand, GM itself counts the HHR as a truck but the hotrod truck SSR as a car. In any event, between the two Mexican-built rivals, HHR is coming up fast with sales of 8,721 in December, still trailing the Cruiser’s 10,167 month. The HHR accounted for 41,011 of Chevy truck sales in an otherwise down year.

 

Among Chevy trucks, the new Equinox crossover has been a real winner, with sales in ’05 of 130,542. But note that recently there has been some lagging. For example, December Equinox sales of 9,867 were some 2,400 behind the year-before month. Overall, the 800-lb gorilla at Chevy continues to be the full-size pickup, rival to the Ford F-Series. As noted above, it’s an easy number-two in the industry after the F and is furthermore gaining a few sales. The new Colorado compact truck replaced the S-10 and with 128,359 sales, added some 11,000 units to the GM truck total.

 

GM’s traditional middle market brands, Buick and Pontiac, have mixed results. Buick wound up at 282,288, losing about 27,000 units with none of its new models yet setting the showrooms afire. Pontiac on the other hand seems to have a winner in its G6, with December sales of 12,642. Yet overall Pontiac sales of 437,806 for the year still lag by about 36,000.

 

GM’s other entities, Saturn and Saab, each reported sales to be a hair slightly better than even. Saturn’s 213,657 of course is many times that of Saab’s 38,343.

 

Toyota’s turn

 

Turning now to the import brands, Toyota in particular romps ahead, importing cars and trucks from Japan if its transplant facilities can’t keep up with demand. The biggest percentage gainer seems to be the Avalon, totaling 95,318 for the year, up from just 36,460 in 2004, all out of Detroit ’s hide. Scion is a close second in percentage improvement, at 156,485, up from 99,259. As noted earlier, the Camry sold 431,703 for the year, some six thousand ahead, while Corolla at 241,290 edged a 9,000 gain.

 

Lexus sold 151,226 cars, up 15,000 units, while its trucks (all SUVs) were close to even at 151,669, one-to-one with cars. Thus Lexus exceeded 300,000 for the first time, well ahead of all other luxury brands.

 

Toyota trucks at 819,271 exceeded the year before by 12,000 units, despite declines with the 4Runner, Sequoia and Land Cruiser, a very credible performance in a weak truck market and a testament to the draw of Toyota dealerships. Modest sales gains by the Sienna, Tacoma and Tundra helped.

 

Overall, Toyota Motor sales in the U.S. came to 2,260,296 vehicles, the second time after 2004, that sales have passed the two-million mark.

 

The other big hitter among import companies, American Honda, also exceeded last year’s sales – 1,462,372 vs. 1,394,393, not as big a margin as Toyota ’s but likewise another record. Acura went over 200,000 for the first time at 209,610, up 10,000. Honda cars fell slightly behind 2004 despite the restyled Civic, coming in at 686,160, while trucks, notably the 42,593 added by Ridgeline plus gains by Odyssey and Pilot, gained 75,000 units to reach 566,702. Hybrid deliveries by Accord, Civic and Insight came to 43,358. Again, a credible performance by Honda dealers.

 

Number Three among imports is Nissan, which at 1,076,670 cars and trucks topped the one million mark in the U.S. for the first time, a real comeback thanks – in my opinion – to impressively differentiated styling. The CEO usually gets all the credit when things go right, but someone down the line had to approve each of the Nissan designs, which have been almost universally winners.

 

In terms of substantial units added to the sales mix in 2005, Nissan’s big winners have been the Infiniti M45, Altima and Pathfinder.

 

Among other major import brands, performance has been mixed. VW of America, comprised of Audi, Bentley and VW, continues to lag with 2005 sales over 307,200 (not counting Bentley which hadn’t reported at press time), down more than 25,000. The bright spots were the Jetta up 18,000 units to 100,132 and Audi, up about 5,000 units to 83,066 with nudges from A4 and A6.

 

BMW Group almost matched VWoA with 307,020, over the 300,000 mark for the first time, thanks mostly to the MINI, 3- and 5-Series and X5. Porsche ended up 2005 only slightly ahead with 31,933 high-profit sales.

 

Korean siblings Hyundai and Kia clocked combined 730,863 sales but the rate of growth has cooled considerably. Only the Santa Fe made a big gain for Hyundai, while Kia was aided by sales boosts from the Spectra and Sportage. Mitsubishi continues to slip, with projected sales around 123,000, down from nearly 160,000 last year. Thanks to the new Subaru Tribeca’s roughly 14,000 sales, that company’s total should have edged out the year before, perhaps topping 190,000, up about 8,000.

 

It is hard to figure how Suzuki and Isuzu can maintain a presence in the U. S. market, with projected sales for 2005 of 80,000 and 12,000 respectively.

 

Now, because in the past readers have requested it, here is a rundown on 11 months’ sales for the exotics – whose final sales weren’t in at press time -- in declining order: Bentley 3,075 (up); Maserati 1,886 (up); Viper 1,489 (down); Ferrari 1,120 (up); Ford GT 1,094 (up); Lamborghini 613 (up); Rolls Royce 405 (up); Aston Martin 368 (down); Maybach 122 (down), and Lotus 2421 (up). Note that these rankings could have been knocked cock-eyed by a few Christmas presents.

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