Obvious Statement Is Obvious

http://www.autoweek.com/apps/pbcs.dll/article?AID=/20080512/FREE/493800689/1530/FREE

Over the past 15 months, Saturn has launched a complete line of vehicles including the Aura sedan, which won 2006 North American Car of the Year. Yet Saturn sales are down 15.4 percent through April.

Let's see. An entirely new lineup. Every single car and SUV replaced with a new better model. Better quality. Better performance. Better everything. More overall models available in the lineup. And sales are down 15%. Isn't it amazing? Isn't this exactly what everyone with half a brain said would happen? The Aura continues to flounder. The Outlook is only going to see sales descend further once the Chevy Traverse hits the public. The Sky is niche and and will always have limited sales.

Who thought this was a good idea? Imagine if every single one of these vehicles was given to Pontiac, Chevy or Buick to help revitalize lineups that actually matter in the grand scheme of things? Already in a position where the margin for error is very small, GM keeps making errors, wasting money, and wasting vehicle launches.

Tundra Sales "Picking Up"

Much ink has been spilled over the past few months about the Toyota Tundra, which is Toyota's first true competitor to the full size pickup offerings from GM, Ford, and Chrysler in terms of size, capability, and power. (Previous Tundras were about 7/8 the size of the domestic trucks).

The initial launch of the truck did not go well. In fact, Toyota's problems began before a single truck rolled off the line, when construction costs for the new factory that Toyota built in San Antonio, Texas for the Tundra went significantly over budget. The product mix was not appropriate at launch - there were too many lightly-equipped regular cabs and not enough loaded CrewMax four doors. Next, there were a handful of highly publicized camshaft failures in the truck's new flagship 5.7 liter V8 engine, and Toyota had to resort to un-Toyota-like generous incentives to give the truck a sales boost.

Well, the incentives must have worked.

When comparing current Tundra sales against its former, smaller self, only the first two months of 2007 were lower than their comparable periods in 2006. Then, starting in March, Tundra sales exploded, and were up over 120% (i.e., more than double) in May, June, and July compared to the same period in 2006. In fact, if Toyota sells just 18,518 Tundras in August 2008 (it sold 23,150 in July), it will have already matched its total sales for 2006. Through the first seven months of 2007, Toyota has sold an average of 15,141 Tundras per month; extrapolating that through December 31, and Toyota is on pace to sell 181,692 trucks, which is almost 46% more than it did in 2006 (but short of its sales goal of 200,000 trucks in its first year). However, if Toyota can sell July's total of 23,150 trucks per month for the rest of 2007, it will have sold 221,740, and blown away its goal. I don't see any signs of the juggernaut slowing down; sales have increased in each month the truck has been on sale, so meeting their goals - which seemed laughable in the truck's first few months - seems almost inevitable now.

Against its competition, the Tundra's sales are even more impressive. The full size pickup segment is down 4.7% so far in 2007, and every competitor is showing negative sales year to date but Toyota, which is up 56.5%. It's a tough market in which to sell a full size V8 powered pickup with the housing market slowing down and high gas prices, which makes this feat even more impressive. So, whose lunch is the Tundra eating, if its sales are way up in a falling segment?

GM Vice Chairman of Global Product Development Bob Lutz, when asked about the Tundra's likely impact on the domestic pickup market several months ago, speculated that the Nissan Titan would bear the brunt of any sales increase from the Tundra. It turns out that so far, he was partially right; year to date Titan sales are down 12.9%, which is the worst drop among competitors. The Ford F-series is down 12.2%, while the GMC Sierra and Chevy Silverado cousins are down a combined 6.9% so far. The Dodge Ram, in spite of a truck about to be redesigned, is the only competitor whose sales dropped slower than the segment's sales.

Another angle to compare might be the market share that each truck has. The biggest gainer in market share (comparing 2007 market share through July 31 against 2006 market share through December 31) was Toyota, going from 5.6% to 8.5% (up 2.9 percentage points). The biggest loser in market share during the same period was Ford, going from 36.1% to 33.1% (down 3.0 percentage points). In other words, almost all of the Tundra's sales gain has come at the expense of the Ford F-series. Time will tell if this is only a temporary phenomenon, as an all-new F-150 is due for the 2009 model year, but half of the F-series lineup (the Super Duty F-250 and F-350) were recently re-done as early 2008 models, and the new Super Duties aren't propping up F-series sales enough to offset the Tundra's gains.

This all means that the Tundra is doing what it is supposed to do for Toyota - building market share, generating cash and profits, and further weakening the domestic competition - all in the face of a GM product that is superior in many ways. The Tundra's success makes the previous strategy of just ceding the car market to the imports in the 1980s and 1990s in favor of trucks look even more foolish than it already did. Now buyers who are satisfied with their Camry or Corolla who need a work truck are thinking, "well, my sedan has been a good car, so the Tundra will probably be a good truck."

Toyota...Down?!?!?!

This can't possibly be true!

But nonetheless, is:

Toyota Motor Sales (TMS), U.S.A., Inc., today reported July sales of 224,058 vehicles, a decrease of 3.5 percent from July 2006.

"The industry stumbled this month, on continued housing weakness," said Jim Lentz, TMS executive vice president. "Though Toyota didn't match last July's record–setting sales, heightened demand for hybrids and crossovers is reassuring, particularly with the next generation Highlander just now hitting showrooms."

The Toyota Division posted July sales of 196,917, down 4.5 percent from last July. The Lexus Division reported best-ever July sales of 27,141 units, an increase of 4.9 percent.

Looks like the boogieman for this month will be 'housing weakness'. Let's take a closer look at the bad:

• The Avalon is very quickly becoming an also-ran in the segment, down almost 15% on the year.
• The Corolla FINALLY appears to be losing its legs. It only took 6 years.
• The Lexus GS continues to be mediocre in terms of sales- and look closely- a miniscule percentage of GS' sold are the V8 or hybrid versions.
• The 4Runner, Sequoia and Sienna are all in major need of redesigns.
• The Lexus trucks are in horrific sales shape.

On the plus side:

• The Camry continues to lead the way.
• The Prius is going absolutely nuts with its newfound capacity- surpassing 100k sales YTD this month.
• The Lexus LS is all of a sudden looking like a 40k a year vehicle.
• The Tundra continues to steamroll along, hitting over 23k in sales this month.

So, some good, and some bad. With a new Corolla in the wings, I doubt Toyota is all that concerned about that end of the market. Of more concern should be he doughy middle that is the Lexus lineup- the low end and the high end do great- but once you look at the trucks and the GS, things really start looking ugly.

On The Moon, Ford Gets Spanked With Moon Rocks

Oh boy, things don't look good.

• Ford Motor Company's all-new and redesigned crossovers were up 40 percent in July; year-to-date sales also up 40 percent.
• Overall sales totaled 195,245, down 19 percent compared with a year ago; daily rental sales were down 57 percent and sales to individual retail customers were down 17 percent.
• Lincoln registers tenth month in a row of higher retail sales.
• All-new Ford Expedition gains for the eleventh month in a row; Lincoln Navigator was up 8 percent.
• Land Rover sales rose 19 percent, reflecting all-new LR2.

---

So after a horrific June, Ford has followed up with a horrific July. At least the Edge is doing well. Up 40 percent over last year.... when they were just rolling off the assembly lines. I do give kudos to Ford for burying the 19 percent down in the second bullet. Bravo spinmasters!

Some more specific ass paddlings:

• The 'new' Taurus and leftover Five Hundred models COMBINED couldn't reach the sales of last years Five Hundred.
• The Fusion has taken a beating for 2 straight months now, almost erasing the sales gains it had made YTD, which are now at a meagre 3.9%.
• The Mustang continues to slide, despite what appears to be 326 different special editions out there- it is not about 12% down for the year.
• F-Series trucks are in deep doo doo.
• The engine enhancements to the MKZ haven't really amounted to much of a sales bump- only 5.5% YTD.
  

On the positive side:

• The Sable is actually doing pretty well.
• The Expedition is actually doing pretty damn well in the face of some serious competition.

Honestly, it's really hard to tell what the hell Ford has to do in order to get this ship righted. The all new Escape has barely had an impact. Good cars like the Fusion just aren't selling in the volumes they need to make a dent. The Taurus/Five Hundred fiasco- nuff said. The trucks are under heavy attack until the next gen F-Series can make a debut. Is something like the Flex really the answer? The company is in a rut, and frankly, I have no idea what they can do to get out of it. They need time more than anything, and they simply don't have it.

Black Ink for Maserati After 17 Years

Today, Maserati announced that it has earned an operating profit for the second quarter of 2007 (before one-time items) of approximately €1 million. This is the first time that Maserati has turned a profit since it was acquired by Fiat in 1990. Last year in the same period, Maserati reported a loss of €7 million. The company also broke even for the first half of 2007, while it had a €26 million loss in the first half of 2006.

The company attributes its newfound financial success to the highly-regarded Quattroporte automatic, which boosted Quattroporte sales by almost 40% over the first five months of its availability. Previously, the Quattroporte's transmission was a rear-mounted Duo-Select semiautomatic transmission which was relatively unrefined (according to reviews) and wasn't happy loping around town. It might have been acceptable in a no-holds-barred performance vehicle such as a Ferrari, but not in a car that competes with other $100,000 luxury sedans.

After much criticism, Maserati re-engineered the floorpan of the Quattroporte and equipped it with a ZF-sourced six-speed automatic transmission mounted in the front of the car to create the Quattroporte Automatica. The new transmission basically addressed nearly all of the complaints that owners and reviewers had about the Duo-Select one, and proved to be a wise move for the Italian automaker.

Maserati expects further success for the rest of 2007; in fact, with the upcoming launch of the Granturismo four-seat premium coupe, Maserati expects to earn a profit for the full year and to sell 35% more vehicles than it did in 2006 (7,600 versus 5,600), and even more in 2008.

Halfway To Zero

The first half of 2007 is behind us, and after some crunching of sales numbers, Automotive News reported today that the market share of the Big Three domestic manufacturers (GM, Ford, and Chrysler) has dipped to 50.2% of the US vehicle market in June, thanks in large part to GM's meltdown. Meanwhile, sales of Japanese branded vehicles in the US rose to 37.5%. Since the Domestics' share was 56.0% in June 2006 and the Japanese brands' share was 32.5% in June 2006, this means that almost one for one, every point of market share that Detroit gave up was snapped up by a Japanese brand. European and Korean brands took up the remaining 0.8 percentage points of market share.

What does this mean? Well, unlike an era a generation or two ago, when GM alone held more than 50% of the US auto market, three US-based companies together are likely to not be able to hold onto that share even together. GM has already said that they will not sit idly by while Ford, Chrysler, and even Toyota outspend them on incentives, so expect possibly a slight bump in July in domestic sales, but the long term writing has been on the wall for a while.

Not only has the US auto market become more fragmented - with more models, more brands, and even more countries of origin than ever before - but the domestic brands falling asleep at the wheel for a decade or two in the 1970s and 1980s certainly has harmed their current situation. For decades, their import competition steadily chugged along, improving their products in terms of comfort and reliability with each generation, convincing one buyer after another to switch brands, Detroit didn't do much about it. Now that this ship has left the harbor, and foreign competition has raised expectations and created a generation or two of satisfied customers, Detroit needs to come up with products and marketing that will convince satisfied import owners - or at least current domestic owners thinking of switching to the import side, that their products are worth buying. To do that, they'll need not only superior products, but substantially superior products. They need to look better (and in some cases, the domestic models actually do look better than their import competition), but also have better reliability, better fuel economy, a nicer interior, and be priced competitively. It's a tough hill to climb, and it pains me to say it, but I don't think we'll see Detroit at 50% market share again, ever.

By the way, the title of this post is not intended to imply that Detroit is on its way to zero market share (although the trend line does move in that direction). At some point, it will level off, but who knows when that will happen? The glass is definitely half empty at this point.

The Massacre

Straight from the mouth of the horse.

GM dealers in the United States delivered 326,300 vehicles in June, down 24 percent, compared with year-ago monthly sales. The decline was partly attributed to a planned reduction of an additional 13,487 daily rental sale vehicles in the month. GM now has taken more than 92,000 daily rental vehicles out of the sales totals in 2007.

First things first- the daily rental bullshit is just that- bullshit. They were down 13,487 in daily rental sales for the month of June, but down 87,173 sales overall, so even if you take 13k sales out of that 87k figure, they're still in deep doo doo.

No Bobby and Ricky, June was one hell of a disaster month for the General.

Some of the brand highlights:

• Buick down a solid 33% for the month, and down 28% for the year.
• Chevy down 26.2% for the month, which accounts for a loss of about 54,000 vehicle sales for ONE MONTH for the 'volume' GM brand.
• The Cadillac revival down over 30% for the month.
• Saturn pulling in a 12% loss for the month, despite an almost complete vehicle lineup overhaul.

The picture gets even more depressing when you look at certain models.

For example:

• Silverado 1/2 ton pickups were down 26% for the month, and are now down 2% for the year... and remember, this is an all new model. Their full-size brethren also suffered a 26% setback for the month.
• The Sierra didn't do any better, down 29% of the month, and now down for the year to date as well.
• The Aura is still selling under 5,000 units per month, putting it solidly in the 60,000 units per year category- all for a vehicle which has been pimped beyond belief to the masses... and with no buyer response.
• The Equinox was down 50% for the month, losing 5,000 sales.
• The G6 was down 38%, losing 7,000 sales.
• The Cobalt was down 38%, with almost 10,000 fewer sales.
• The Malibu was down 51%.
• Even the once hot Solstice has fallen behind by 20% year to date versus last year.

Notice a trend here? All the volume sellers aren't doing volume!

About the only bright spots in the lineup this month were the Lambda triplets... and yet another further increase in Impala sales, which can only portend the end of the world. The biggest problem above and beyond the poor sales is this- when you take THIS ARTICLE into account, you realize that even these deflated sales numbers can be deflated further in terms of 'John Doe and his family' sales. Crazy.

Perhaps the truth is dawning on GM- the fix won't be quick. And when it arrives, the company may be long, long, long, long gone. But what do Lutz and Wagoner do? They continue to act like they're the big hosses in the barn... it's only a matter of time boys, only a matter of time.

Is the smart Too Smart for the US?

The smart [the all-lowercase name is almost as irritating as Saturn's all-uppercase names, and will not be repeated throughout the rest of this post], a diminutive "city car" produced by Daimler, is going to make its official US sales debut in the first quarter of 2008, to be sold by United Auto Group, a large dealership chain owned by Roger Penske. There has been a lot of hype surrounding the US availability of this car; the official website at http://www.smartusa.com/ even is so kind as to provide a way for interested owners to "reserve" a 2008 Smart for just $99.

Although the reservation fee is refundable at any time, and the company claims that the fee and reservation system are there to "gauge interest" in the car, it sounds to me that it's arrogant at best, and a scam at worst. How does committing $99 - in what is not even really a commitment, because you can get your money back, and they don't have to sell you a car if they don't have enough - really gauging interest? Plus, the "deposit" is less than 1% of the $12,000 base price of a Smart. So basically, Smart expects buyers to pay $99 for the privilege of being contacted if a Smart car is available for purchase.

As of early June, UAG announced that they had over 20,000 Smart "Insiders" who paid $99 to be on the sort of wait list...so Smart is now holding almost $2 million for basically doing nothing. I'd like someone to give me $2 million for a little while. I won't even touch the principal, and if I invested it in a mutual fund that earned 10% per year, I'd be making six figures without lifting a finger. Sweet.

Smart expects to produce about 16,000 ForTwos for sale in the US for the 2008 model year, and I can see them meeting or even exceeding that goal, but is this really a car that's going to succeed beyond core urban centers like New York, San Francisco, Chicago, or Miami? Everything I've read about them has said that they're surprisingly roomy inside for two passengers, but lack luggage space, and give off a vibe of feeling a little too close to the road and surrounding traffic, without much sheet metal between you and them.

For a quick run to the grocery store, or for simple urban parking, they seem like a neat idea, if perhaps just a novelty. They'll get pretty good gas mileage (over 40 miles per gallon, even without the benefit of hybrids or diesels) and crash tests have been successful in them because of their innovative engineering. But how many Americans, who pretty consistently are in love with 1) large vehicles, and 2) fuel economy, as long as it requires no sacrifices in vehicle size, comfort, or engine power will be willing to pay $12,000 for an 8.8 foot long, 1600-pound "city car," when most Americans live in large suburbs and do not have to worry about urban parking or maneuverability? I think the Smart requires too many sacrifices - namely, interior space, engine power, and perceived occupant protection - to be a huge success in the US.

Test Driving The 2007 Chevrolet Corvette

Here's the review-













Yup. That's it.

Why is there no review you ask? Very simple. The local Chevrolet/Cadillac dealer in the area doesn't allow for new Corvettes to be test driven. At all. Now in my specific case, this isn't an issue, since I'm not buying such a vehicle. But I bring up a salient point at this time- I wasn't alone, and the person I was with WAS very much in the market for such a car. Also on his shopping list? The Cayman. Possibly the 911. The BMW Z4. The Mercedes SLK350. All sports cars, some of them more expensive than the Corvette, some cheaper.

Thus far, he had driven the Z4 and the SLK, and had an appointment set up with the local Porsche dealer to drive a Cayman (which was going to be moved out of the showroom just so he could drive it). Upon arrival at the Chevy dealer, we were approached by the salesperson, who promptly looked up if he had stock of what was required- a convertible Corvette with a stick. Lo and behold, he had one. And then the fun began:

Sales- So I've got one on the lot- what can I do for you?
Client- Well, I'd like to take it out for a test drive to get a feel for how it compares to the other vehicles I'm cross shopping.
Sales- We don't allow new Corvettes on test drives. But if you'd like, I have a used 2002 Corvette we can take out.
Client- (incredulous laugh)
Sales- No one ever asks for a test drive because they know they want it already.
Client- You're serious? You're actually assuming I will disregard the competition and lay down $70k on the spot today without a test drive because it's a Corvette?
Sales- Well, would YOU like it if your new Corvette had 500km on it when you bought it brand new? Plus, these are very expensive cars!
Client- So wait, you won't even let me test drive it with you in the car with me?
Sales- No.
Client- See you later.

...

So ended another unsuccessful sales call with a GM minion. The last time I saw a dealer act this way was at the downtown Lambo dealership- but then again, it's a Lambo. But a Chevy dealer???

Note to Bob Lutz- make your cars as great as you want- you still need to fix the sales departments outside of Saturn.

Nissan Net Profit Down Fiddy Four Percent! O NOES!

http://www.cnbc.com/id/15423911/for/cnbc

TOKYO - Nissan marked its first drop in annual profit in seven years on Thursday, the first such setback under the leadership of Carlos Ghosn, who salvaged the Japanese automaker from collapse. He also acknowledged Nissan would need an extra year to meet a key production target.

So they're down in net profit, but still making about 600 million a quarter instead of 1.1 billion. Oh woe is them. Grasping at straws, I've seen many claiming that Nissan is fuxxored. While making over half a billion a quarter. Digest that for a bit. At their lowest point in their 'turnaround' right now, Nissan is screwed because they 'only' made 600 billion in the quarter.

Yeah, the internet is full of idiots.