Chrysler reclaims No. 4 spot as September sales crater

Let’s start the report with some good news: Chrysler regained the No. 4 spot in sales last month. Not just for the month, but in year-to-date (YTD) sales, as well. Chrysler outsold Honda by over 10,000 units in September, giving it a slim, 2,936-unit lead for the first nine months of 2008. Some more good news is the Dodge Caravan took the top spot in the minivan segment for the month, though the Odyssey still holds the lead for the year. The Chrysler Town & Country lost to the Toyota Sienna in September but leads it in YTD sales.

Another piece of relatively good news is that Chrysler did beat the analysts’ estimates. Instead of a 34 percent drop, compared to September 2007, sales were down just 32.8 percent. Sounds like no big deal until you see how the predictions fared with the other automakers. The sort-of-good news continues with the fact Chrysler did not post the largest drop of the Big Six automakers; that honor goes to Nissan, where sales were down 36.8 percent last month. In fact, Chrysler’s drop was only a half-percent more than Toyota’s. Chrysler also beat Ford, where sales plunged 34.6. Chrysler even came out ahead of Ford’s domestic brand sales which dropped 33.7 percent.

Sales of the new Dodge Journey had their best month since June, an encouraging sign.

Still, total Chrysler sales were down, led by a 42.8 percent slump in sales of Jeep vehicles. YTD sales are now 25 percent behind the first nine months of 2007 which is the largest deficit among the Big Six.

Of all Chrysler’s models, only the Caravan, Town & Country and Viper beat their numbers from September 2007. Durango sales nosedived to just 616 units in spite of large incentives, leaving it not only with a 78.4 percent monthly shortfall but a YTD deficit of 53.8 percent, second only to the Jeep Commander’s 54.8 percent. The Nitro has to be a candidate for the chopping block; it has failed to connect with consumers who clearly prefer the Jeep Liberty and YTD sales are down 46.1 percent.

The Chrysler 300 is still lagging. September sales of the biggest Chrysler sedan were down 53.6 percent, leaving it in the red by 42.6 percent for the year so far, the worst performance of any non-discontinued Chrysler or Dodge passenger car. Only the Challenger and Viper had fewer sales last month.

Compass sales are another problem. Jeep dealers moved just 993 of them last month, 65.2 percent fewer than last year. YTD sales are less than half of the far more popular Patriot and not even a third of those racked up by the Caliber.

By percentages, the Dakota was Chrysler’s worst-performing light truck in September, joining the Durango and Compass in failing to break the 1,000-unit mark. Just 622 Dakotas left dealer lots last month, an 85.1 plunge from September 2007. With a YTD shortfall of 47.7 percent, it’s not as bad as the Durango or Commander, but, except for the moribund Isuzu, it’s the worst- selling of the compact pickups.

September was a terrible month for light vehicle sales. Automakers combined sales totaled fewer than one million cars and trucks, the lowest monthly total in at least 15 years. September was also the eleventh straight month of dropping sales, a streak unmatched since 1991. The seasonally-adjusted selling rate (SAAR) was 12.5 million light vehicles last month, a half-million units below analysts’ estimates and 50,000 sales below July 2008. Turmoil in the financial markets choked off credit and consumers stayed on the sidelines waiting to see how events would play out. Visits to dealerships dropped in the latter portion of the month as big brokerages and banks disappeared.

The best-performing automaker in September was Maserati of North America where sales totaled 199 vehicles, up 30.1 percent. Of the larger auto companies, Volkswagen of America was tops with an 8.2 percent drop, mild compared to some of the larger companies. Technically, the best-performing brand was Smart with 1,778 sales because the brand was not sold in the U.S. last year. Of the major brands on the market at least a year, the top brand was Audi, just 5.4 percent behind its September 2007 mark. Volkswagen itself didn’t fare too badly, down 9.4 percent which is still one of the best results reported. Volkswagen, Jaguar and Maserati are the only automotive brands that are still ahead of their 2007 marks in YTD sales.

General Motors posted the best results of the Detroit automakers as its employee pricing program, which ended yesterday, kept its domestic brands within 13.0 percent of its September 2007 mark, based on reported light vehicle sales. GM’s 29.3 percent September market share was a huge gain over last year and was reminiscent of the GM of old. In YTD terms, GM is down about 17.2 percent, the smallest deficit among the hometown gang.

The Chevrolet Silverado was the best-selling vehicle for the month. While it still lags the F-Series in YTD sales, it has regained the No. 2 spot from the Camry. Chevrolet was also America’s favorite brand for the month. Toyota is still tops for the first nine months of the year, but Chevy is catching up. Wonder if GM will announce an extension of its employee pricing program?

Ford took the biggest hit this month, giving Chrysler a much-needed break. The guys in Dearborn missed their year-ago mark by 34.6 percent. Even when the 51.8 plunge at Volvo is discounted, Ford’s domestic brands still came up 33.7 percent short.

Of Ford’s passenger cars on sale for more than a year, only the fleet-only Crown Vic, Lincoln Town Car and Focus beat their 2007 marks. Mustang sales plummeted by 52.2 percent.

Despite heavy promotion, the Flex had its worst month since its June debut while the previously hot Edge came up 43.0 percent shy of its year-ago mark. Explorer sales took a nose-dive, dropping 67.3 percent to 3,498 units.

Volvo had a terrible month; not a single one of its passenger car models broke the 1,000-unit mark and only the top-of-the-line S80 sold more than 500 units. The XC90 SUV, long Volvo’s top performer, slumped 55.0 percent to 1,106 sales.

September’s carnage was not limited to the Detroit manufacturers. Toyota Motor Company sales dropped the most in 21 years, down 32.3 percent compared to September 2007, just slightly better than Chrysler, though volume was still high enough to keep Japan’s top automaker in the No. 2 spot. The Toyota Division reported sales down 31.8 percent and Lexus stumbled 36.1 percent to 16,045 units, leaving Mercedes-Benz in the top spot among luxury brands. Lexus still has the lead for the year, though BMW, which reported a smaller sales drop than Lexus, could still give it a run for its money.

Almost all of Toyota’s passenger car and light truck lines missed their year-ago numbers. Ironically in today’s market, Toyota’s only winners were its big Land Cruiser, Sequoia and Lexus LX SUVs.

Honda, which up until last month, had been one of the only automakers ahead of 2007 in YTD sales, dropped 24.0 percent last month, wiping out its lead and leaving it 1.1 percent in the red. The Honda Division is still 0.8 percent up on 2007, but a 15.3 percent drop in Acura sales dragged the parent company down. The tiny Fit was the only Honda light vehicle line to show improvement as supplies of 2009 models reached eager dealers. Sales of the flagship Accord were down 36.1 percent in September but are still 3.8 percent ahead of the first nine months of last year.

Despite the most generous incentives of the Japanese automakers, Nissan North America took the biggest hit of the Big Six. Combined Nissan and Infiniti sales tanked, coming in 36.8 percent behind September last year. Only the Rogue and new Infiniti EX reported improved sales and four models, the 350Z, Armada, Quest and Infiniti QX56, joined the sub-1000 club.

One bright spot is that overall YTD sales of Honda and Nissan-branded passenger cars are still in the black by small margins.

Subaru was the top-performing Japanese automaker with a moderate 11.9 percent sales drop. The other Japanese companies reported declines between Mazda’s 35.6 shortfall and Suzuki’s 46.6 percent plunge. Isuzu continued its death spiral with a 54.3 percent drop but, with just 258 sales last month, it’s hardly worth mentioning.

The Korean automakers fared slightly better: Hyundai sales were off 25.4 percent and Kia came in 27.8 percent behind September 2007.

As a group, the independent European brands fared best of all even though Porsche sales cratered, down 44.8 percent. BMW sales were down 25.8 percent, including a small 6.7 percent hiccup in Mini sales, Mercedes racked up 18,779 sales, a 16.4 percent dip that left it the leader in premium sales for September. As mentioned previously, Volkswagen did comparatively well last month.

For the first time in a while, sales of domestic-brand vehicles captured over half the market in September. About 52.3 percent of all light vehicle sales went to Chrysler, Ford and GM’s American brands. In addition, light trucks (vans, minivans, crossovers, SUVs and pickups) accounted for the majority of sales with 50.3 percent of the market.

Consumer caution and tight credit replaced gas prices and inflation as September’s market-killers. According to CMW Marketing Research, loan approvals were down across the board with just 81.4 percent of prime loans, 77.4 percent of near-prime loans and 22.71 percent of sub-prime loans being approved. Last year, even sub-prime loans had a 67.0 percent approval rate. This trend is likely to continue even if Congress passes the Senate version of $700 billion bailout it will begin to consider this afternoon. It may take another rate cut from the Federal Reserve Board to persuade bankers and investors to get back into the credit markets. This could make October and November, which are seldom good months for auto sales, even more disappointing than usual. The auto industry could find it challenging to break the 14 million mark in 2008, though I personally think we’ll wind up around 14.2 million because automakers will likely pile on the incentives and the government will try to encourage more lending. We’re in a recession, whether or not it meets the classical definition, and the past seven years have given Americans millions of still-serviceable vehicles they can drive until better times appear on the horizon.