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Chrysler February sales beat forecasts

by Bill Cawthon on

Sometimes victory is defined simply by not losing as badly as everyone else. Chrysler had one of those victories in February. Even though its own sales were down 44 percent, Chrysler came in ahead of General Motors and Ford, where sales were even worse. In fact, Chrysler no longer has the worst year-to-date (YTD) sales losses of the major automakers. General Motors beat them by two full percentage points.

Chrysler sold more light trucks than any automaker except General Motors. That’s right: Chrysler sold more light trucks than Ford. While the list of Top Ten Trucks by YTD sales includes only the Ram pickup, the same list for February includes four Chrysler vehicles: The Ram pickup, Jeep Wrangler, Dodge Caravan and Chrysler Town & Country. Every other full-size pickup lost a higher percentage of its February 2008 sales than the Ram.

The Chrysler Town & Country and Dodge Caravan came back to claim the top spots in the minivan segment in both monthly and YTD sales.

The Jeep Wrangler came in third in the Crossover/SUV segment, behind the Honda CR-V and Ford Escape, but it beat every other traditional SUV. The Grand Cherokee beat its competitors at Ford and General Motors.

While Chrysler was pretty much an also-ran when it came to passenger car sales, there were still some things to cheer about; the Challenger outsold the Ford Mustang in February and is about 100 units ahead in YTD sales. The Charger’s 6,703 sales were well above average and it was the top-selling rear-wheel drive sedan in February.

The Journey continues to outsell the Ford Flex by a wide margin and outsold every GM Crossover/SUV except the Chevy Traverse in February.

So, will Chrysler get any respect from the analysts and legislators who keep calling for it to just give up and die? Probably not. They have made their prophecies and they won’t let anything stand in the way of seeing their visions come to pass. Besides, Chrysler’s victories will be swept aside in the media post-mortems of one of the worst sales months in decades.

Overall industry sales totaled 688,909 cars and light trucks, down 41.42 percent from the 1,175,919 units sold in February 2008. The latest sales figures yield a seasonally adjusted sales rate (SAAR) of 9.12 million light vehicles, down from 15.36 million last February. That’s the lowest since December 1981 and the second-lowest SAAR since the government began detailed tracking of light vehicle sales in 1975.

February’s big loser was General Motors, which took a 53.05% shellacking to become the worst performing of the major automakers in 2009. Ford took its biggest hit in several months, falling 48.46 percent and reporting monthly sales under 100,000 units for the first time in many years. Light truck volume at both companies was less than half what it was a year ago. The Ford F-Series remains the best-selling vehicle in America, but its numbers are pathetic: 23,614 sales in February, a 55.1 percent nosedive from February 2008.

Toyota sales plunged 39.85 percent, leaving its YTD sales 35.92 percent behind the first two months of 2008. Like many other automakers, Toyota has asked the Japanese government for guaranteed loans for its financing operations. The United States is not only Toyota’s largest market; it has also been the source of much of the company’s profit. It’s no coincidence that the market crash in the U.S. has Japan’s largest automaker preparing to announce its first operating loss in almost seven decades.

Honda has indicated it might also try to tap the public purse. With a 37.97 percent shortfall in February sales, Honda’s YTD sales are down a third in a market that is Honda’s primary source of profit.

Nissan sales dropped 37.08 percent last month, leaving it 33.59 percent in the red for 2009. One bright spot for Nissan is the fact its Altima sedan outsold the Honda Accord and Civic. The Toyota Camry and Corolla still hold the top two spots in passenger car sales.

Not everyone reported bad news: Subaru sales were up 1.41 percent in February giving the company a 4.49 percent lead over 2008 in YTD sales. Kia also came out a winner, by a scant 0.39 percent, leaving it 1.91 percent a head of the first two months of 2008. Hyundai came very close, missing its mark by just 1.51 percent. Even with that shortfall, Hyundai is still 4.93 percent ahead of its mark this time last year. Sales of the tiny Smart car are still bubbling along; February’s 1,415 sales were 28.52 percent higher than last year and YTD sales are up 83.18 percent.

The German automakers fared relatively better than their American and Japanese counterparts. BMW was the big loser with a 37.53 percent sales decline, while Mercedes-Benz and Volkswagen reported shortfalls of 23.50 and 17.49 percent, respectively. Porsche sales came in 11.49 percent behind February 2008, as stronger sales of its sports cars failed to compensate for a drastic drop in sales of the Cayenne SUV.

The big list of manufacturers said goodbye to one of its own last month. Isuzu, which saw its sales peak at 123,565 cars and trucks in 1987, left the U.S. light vehicle market at the end of December 2008 and issued its final sales report last month.

Even with the loss of Isuzu, the Asian automakers captured the largest share of the U.S. light vehicle market in February, accounting for 47.26 percent of all sales. The Detroit automakers claimed 44.89 percent, down from 51.96 a year ago.

While February’s results were abysmal, no one is saying the market has hit bottom. In fact, no one is even estimating where the bottom might be. The fact is the U.S. light vehicle market is already at a level that more than one industry insider has said is unsustainable. The Presidential Task Force and members of Congress, especially a few from certain Southern states, should take note of the fact it’s not just a couple of American automakers looking for help now. General Motors may divest a majority of its holdings in Opel to allow its German subsidiary to get billions in aid from the German government to help it survive. Ford has lined up a major infusion of funds from the Swedish government for Volvo and only GM’s complete mishandling of Saab has prevented the Swedish government from taking action there, as well. Volkswagen, the world’s third-largest carmaker, is asking for billions of euros from the German government. Toyota, Honda and Mazda are looking to the Japanese government for financial aid. Around the world, workers are being laid off, factories are being idled and production is being slashed. Anyone who thinks the problem is just General Motors and Chrysler, or the UAW, either isn’t paying attention or is one of those who has made up their mind and refuses to be swayed by facts.

The automakers didn’t cause the economic collapse. In fact, had light vehicle sales merely moderated instead of taking a nosedive, it’s possible that none of the automakers would be asking for government help now (GM’s been in trouble for a while and Ford mortgaged everything it had a couple of years ago). Those who don’t think the auto companies have been downsizing are completely out of touch with reality. Consider this: In 1979, General Motors’ U.S. employment peaked at 618,365 and it was the largest private employer in the United States. Worldwide, the number was about 853,000 men and women. At the end of 2008, worldwide employment stood at 266,000. In 1979, GM sold 8,993,000 vehicles worldwide. In 2008, GM sold 8,355,947 light vehicles. So GM produced 7 percent fewer vehicles with 69 percent fewer employees. Now GM plans to shed another 47,000 employees worldwide. Chrysler and Ford have been equally diligent in trimming their operations.

Extraordinary times call for extraordinary measures. If we can devote nearly a trillion dollars to propping up our financial industry, we can spend a fraction of that to aid one of the cornerstones of our manufacturing industry. Robust vehicle sales will not return until consumers and business owners feel enough confidence in the future to make the financial commitments to purchases and until there is enough faith and liquidity in the financial markets to allow a resumption of loans and leasing, factors beyond the control of any of the automakers.

This month will be significant, no matter how the sales tally up at the end. March 31st is the date for the decision on whether to continue to provide financial support to Chrysler and General Motors. Let’s hope our elected leaders chose wisely.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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