August auto sales down 15.5 percent, Chrysler plunges 34.5 percent

August wasn’t even as kind to Chrysler as July and July wasn’t kind at all. In July, sales were down 34.3 percent by daily sales rate (DSR); volume was down just 28.8 percent. Last month, sales volume was down 34.5 percent. Since August 2008 and August 2007 had the same number of selling days, there is no adjustment for DSR.

Truck sales dropped by 33.1 percent and car sales fell off a cliff, plunging 38.5 percent. As of the end of August, Chrysler had sold just over three-quarters as many vehicles as it did in the first eight months of 2007. This is in spite of discounts up to 40 percent off the MSRP on some vehicles. In my neck of the woods, the least expensive Chrysler product is a full-size Ram pickup.

Chrysler Town & Country minivan sales were the brightest spot in the lineup; sales were up 15.2 percent compared to August 2006 and up 26.1 percent compared to July 2008. Caravan sales were up 54.1 percent compared to July but missed their August 2007 mark by 1.3 percent. Unfortunately, the improvement wasn’t enough: the Honda Odyssey and Toyota Sienna both outsold the Chrysler twins in August. The Odyssey is now the top minivan in year-to-date sales, having passed the Caravan by over 9,900 units.

The Ram pickup and Town & Country were the only Chrysler vehicles to break the 10,000-unit mark in August. The Caravan and Charger came in third and fourth as the Charger posted a 3.3 percent improvement over last year.

The Chrysler 300 needs some serious help or at least a major refresh. Year-to-date (YTD) sales of Chrysler’s flagship automobile are now 41.3 percent behind the first eight months of 2007 and they are less than half of the same period in 2006. The 300 is, by far, the weakest of Chrysler’s passenger cars. By comparison, the Avenger is just three percent behind its 2007 numbers and the Sebring and Charger deficits are just about ten percent.

The new Journey is ramping up nicely; it’s already outsold the Aspen, Durango and Nitro in YTD sales. In fact, the Journey came within 756 sales of outperforming their combined numbers in August.

The Challenger is also doing well, though it’s not giving the Ford Mustang any sleepless nights… yet.

The Wrangler is still the king of the hill among Jeeps and though it’s lost some steam from the record-breaking sales of a couple of years ago, it’s still beating most of the competition among hard-core SUVs.

Chrysler wasn’t alone in its misery; it had lots of company. Industry-wide, sales volumes were down 15.5 percent from August 2007. That’s actually a bigger deficit than was recorded in July, when sales volume was down 13.4 percent. Total sales of just short of 1.25 million light vehicles translated into a seasonally adjusted selling rate (SAAR) of 13.72 million units, well behind the 16.3 million pace of August 2007. However, because of the miracle of government accounting, that was an improvement over July’s SAAR of 12.55 million and it beat many analyst estimates. The Bloomberg poll predicted a SAAR of about 13 million sales.

While Chrysler’s results were in line with analyst estimates, Ford came in with a surprise: sales tumbled 26.5 percent last month. Only JP Morgan’s Himanshu Patel came close. Ford domestic brand sales were down 25.5 percent and a 48.8 percent nosedive at Volvo dragged the company’s results down by another point. The once high-flying Explorer and Expedition are shadows of their former selves and their combined August sales would have represented just over a week’s sales of the Explorer alone in its glory days. As the small-car shift continues, the Focus remains a hot item with sales up 23.4 percent but, with the exception of the fleet-only Crown Victoria, it was the only Ford car to beat its August 2007 numbers.

General Motors also beat the analysts estimates, but in a good way: its sales were much better than expected. The Bloomberg panel had forecast a 29 percent decline in GM sales but when the numbers were added up, GM sales were off by just 20.3 percent. GM’s employee pricing program may not have worked as well as it did the first time, but it turned a steep decline in the first half of the month into something to celebrate, at least a little bit.

GM truck sales, which were the worst-performing of the Detroit automakers, brought in the best marks in August. The Silverado outsold the Ford F-Series by a wide margin and Chevrolet beat both Ford and Toyota to become the best-selling brand for the month.

Toyota Motor Sales missed its August 2007 numbers by 9.4 percent as both the Toyota and Lexus divisions came up short. Toyota’s passenger cars couldn’t match their year-ago pace as dealers ran short of smaller cars and the supply of Prius hybrids still wasn’t enough to meet demand. Toyota YTD sales are now 7.8 percent behind the same period in 2007.

Honda wound up in the red, too, as panic buying of the Fit and Civic left dealers with no inventory. Fit sales were down 25 percent simply because the supply had already been depleted and Honda couldn’t deliver 2009 models fast enough. Accord and light truck sales were also down, leaving Honda with a 7.3 percent shortfall. Honda did deliver the third of its hydrogen-powered FCX Claritys to a waiting Southern California customer.

Nissan also confounded the analysts. Instead of a predicted 1.8 percent improvement, Nissan sales jumped 13.6 percent on strong sales of the Frontier compact pickup, Xterra SUV and the new Rogue. Versa sales were off slightly as dealers ran short. Infiniti sales were up, as well, with a 27 percent gain posted by the FX.

Subaru was another happy Asian automaker, posting record sales in August. All of the other Japanese and Korean manufacturers failed to match their August 2007 records. Suzuki sales fell 31.8 percent and Mitsubishi came up 29.4 percent short. Hyundai and Kia fell by 8.8 percent and 6.7 percent, respectively. Mazda’s numbers were off 4.4 percent even despite the fact sales of its CX-9 were up 41.4 percent and those of the Mazda5 jumped 39.7 percent.

Volkswagen and Mini were in the happy position of being the only European brands to come in ahead of August 2007. Jettas and GTIs made up for a slump in Rabbit sales ahead of the rollout of the new model and Mini sales were up more than 34 percent.

Sales were down at almost all of the luxury brands but there were still some changes. Audi passed Volvo in YTD sales for the first time in recent memory and Infiniti overtook Lincoln. Mercedes took an 11.8 percent tumble as a 53 percent improvement in C-Class sales wasn’t enough to overcome weakness across most of the rest of the line. BMW missed its mark by 4.1 percent even though its 3-Series has outsold every Chrysler vehicle except the Ram pickup, Caravan and Town & Country in YTD sales.

Some in the industry saw August’s results as encouraging, pointing to the 40-cent drop in gasoline prices from their mid-July records and somewhat stronger sales of light trucks. Others think the rush to small cars is over. I think such optimism is a bit premature. The national average price of a gallon of unleaded is still more than 90 cents higher than it was last year and inflation is still eating into family budgets. Chances are good that $4.00 per gallon will be the new base price by this time next year. Credit is still tight and often expensive for those who can get it. Consumers are still concerned about job security as U.S. employers, including the auto industry, continue to reduce headcount.

Yes, light trucks are moving better than they have in the past few months, but that’s probably as much due to the huge, even record, discounts being given on them. The fact remains that smaller cars have one big advantage over big pickups, SUVs and crossovers: they’re less expensive, often by many thousands of dollars. As supplies of heavily discounted 2008 trucks are depleted, buyers will be confronted with new vehicles that are more expensive and, in most cases, not significantly cheaper to operate. I have a feeling it’s going to be a while before we can return to those 17-million-unit years.

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