Gojirra99

Power Information Network Reports:
Early February 2006 New-Vehicle Retail Sales Declined Eight Percent
Versus a Year Ago


WESTLAKE VILLAGE, Calif.: 21 February 2006 — New-vehicle retail sales have declined 8 percent in the first 12 days of February when compared to a similar time period a year ago, according to the Power Information Network (PIN), the industry’s premier source for real-time automotive retail sales information. Mid-month results are derived from actual retail transaction data collected by PIN and do not include fleet sales. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

American Honda was the only multi-franchise manufacturer to experience a retail sales gain in early February (up 4% compared to a year ago), but several other manufacturers experienced retail sales declines that were less than the overall industry. General Motors and Toyota Motor both had 1 percent sales declines, while Nissan decreased by 7 percent. DaimlerChrysler and Ford Motor Company both experienced declines in retail sales greater than the overall industry.

“American Honda is benefiting from positive reviews and word of mouth about its new Civic, as well as continued incremental sales of its Ridgeline midsize pickup,” said Tom Libby, senior director of industry analysis for the Power Information Network. “General Motors is also showing signs of life, as it out performed the industry for the first time in many months.”

In addition to the retail sales improvement, American Honda also recorded a gain in retail market share in early February, increasing to 11.9 percent versus 10.5 percent a year ago. Several major manufacturers increased their retail market share in early February when compared to a year ago, including GM (21.8% compared to 20.3%); Nissan (8.1% compared to 7.9%); and Toyota Motor (17.1% compared to 15.9%). DaimlerChrysler and Ford Motor both experienced decreases in retail market share when compared to early February 2005.

After the launch of an aggressive pricing strategy and several new products in early January, General Motors has out performed the industry and gained retail market share when compared to their performance in early February of 2005. While total industry wide new-vehicle retail sales declined 8 percent in early February, GM’s retail sales declined by only 1 percent and its share of the retail market increased from 20.3 percent to 21.8 percent. This marks the first time that GM has out performed the industry in the past five months.

"GM's retail market share is off to a slow start, but should finish the month somewhat higher than its mid-month estimate,” said Bob Schnorbus, chief economist of global forecasting at J.D. Power and Associates. “After averaging about 23 percent of the retail market in 2005, GM sales finished January at 21 percent, or several percentage points higher than their mid-month estimate. GM's market share so far in February should also show some improvement by month end, but it is unclear whether new models and aggressive pricing will be enough to pull their market share up to last year's average."



New-vehicle manufacturers relied less on customer cash rebates in early February 2006 than they did a year ago, with the average rebate amount decreasing by 6 percent to $1,141. Several major manufacturers reduced their average rebates substantially in February, with the average cash rebates at DaimlerChrysler and GM declining 20 percent and 15 percent, respectively. Additionally, only 48 percent of new-vehicle retail sales in early February included a rebate, down from 50 percent a year ago.

Conversely, Ford Motor and Nissan on average had larger rebate cash amounts when compared with a year ago. American Honda does not use customer cash rebates and Toyota Motor uses rebates to a much smaller degree than the domestics.

source : jdpower

XeroK00L

Wow...really impressive how Toyota achieved this growth with minimal use of cash rebates.

On the other hand, just when we thought Toyota is on track to overtake GM, GM increased their market share even more than Toyota did. Perhaps the downfall of GM is not as imminent as everybody thought.

bitkahuna

iTrader: (20)

A sales guy at a local Toyota dealer told me Toyota corp had slashed dealer margins to hold or lower list prices on vehicles telling the dealers 'you just need to sell more vehicles'. Of course I don't know if this is true, but he wasn't a happy camper.

This sounds similar though to what GM has done recently, rationalizing its pricing to rely less on rebates off unrealistic MSRPs.

mmarshall

I don't know the conditions at the Toyota dealership where you talked to this guy so I can't directly judge what he said, but here in the DC area there would be two problems what what he told you. First, Toyota can slash dealer margins on Scions by increasing wholesale prices because if the MSRP does not change, deaer profit margins WILL be cut because Scions are required to be sold at list, like Saturns used to, unless they have factory-approved accessories. Scion salespeople have no leeway to adjust for wholesale price increases...they are required to sell the cars at list either way.
On Toyotas, however, dealers DO have leeway to adjust for wholesale price changes, so all they have to do is raise the actual out-the-door price and their margins will not be changed.

Second, the admonition to just " sell more cars " is silly unless you have the facilities, time, and work force to do it. You can't just wave a magic wand and say " Presto, more sales " and that's that. There's a LOT more to a new car sale that just writing up a deal. New cars coming to the dealership have to be unloaded, parked, PDI'ed, inspected, emissions-tested ( in some areas ) , serviced, tested, washed, waxed, and detailed before delivery. That all takes a lot of work. Camrys and Corollas, especially, are extremely popular in this area.....local Toyota shops sell a ton of them. There is only so much room in the parking lots, service bays, storage lots, and wash-and-wax room at any given time....and of course you have to give your employees time for breaks and meals. If these facilities are already operating at capacity, I don't care if the Toyota CEO himself personally visits the dealership....you can only do so many cars at once, even with good ans skillful workers who are not lazy....and sometimes it is very difficult to expand buildings or facilities when you are in a congested area or when the price of land and construction is high.