Riding out the storm: 2007 going to be a bad year for sales
The automotive industry isn't back on the upswing yet. 2007 may prove to be a nine-year low for sales at 16.2 million units, with Detroit automakers taking the biggest hit. CSM Worldwide, leading auto industry analysts, released a report recently indicating that U.S. light-vehicle sales would drop 1.2 percent from the 16.4 million units expected to leave dealer showrooms by the end of this year.
The leading reason -- surprise, surprise -- is that folks have bought their new cars already, or as CSM says, the industry has "depleted pent-up demand." Contributing to the problem is the soft housing market and vehicle devaluation, but efforts to eliminate incentives and raise the value of vehicles should help out. Despite efforts to raise the values of its vehicles, however, the situation poses major challenges for Ford and General Motors in their restructuring efforts.
Asian automakers, on the other hand, are poised to do well despite the market contraction, with Toyota actually gaining a full point of market share.
[Source: Automotive News]
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Reader Comments (Page 1 of 2)
L3 10:13AM (12/15/2006)
Whoa, Negative Nellie,
Guess what. People are out there buying cars day in and day out. Maybe we need to find people that were going to buy a used car from a neighbor or who were going to nurse an old car through winter, but the buyers are out there.
You see, unlike most other products, unless someone is too young or too old, almost everybody has a car. So, it is not a matter of 'if' they will buy one, but 'when.'
My dealership is a Ford L-M, and Nissan dealership, and the people in my community love the products. Whether it is a big diesel truck to tow a horse trailer or work at the construction site, or a hybrid Escape to run around the ski resort, Ford makes some very useful products. Nissan Xterras are wildly popular around here, too.
Look on the bright side. People are buying cars. They are buying them EVERY DAY.
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Blooooooooooooood 10:12AM (12/15/2006)
The funny part is that GM and Ford NEED to sell cars to stay alive.......which means they will offer even bigger insentives. Hey i don't care how good Camry or Accord are, but a fully loaded brand new Chevy Malibu for 15G's is a great deal. Way to go Capitan Bob and Camanduer Rick.
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Blooooooooooooood 11:54AM (12/15/2006)
L3, you know i live in USA, i live in big city but i have also been outside...........howcome i seen people towing a horse trailer only 2 times in my life (Police officers..Horse unit)
By towing a horse trailer you mean going to Costco or maybe you are refering to all married women as horses in your community?
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Professor Porsche 10:25AM (12/15/2006)
Trust me, Mr. Misleading headline Man,
2007 will sure NOT be a bad year for TOyota, and even not for HONDA.
They will BREAK SALES RECORDS ONE MORE TIME, while the arrogant, incompetent Big 3 will keep churning out INFERIOR PRODUCT, and STILL not have a clue
Why they have been losing HOME GAMES for 35 years straight to Honda and TOyota!
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Paul 10:27AM (12/15/2006)
maybe next year will be the one where finally there will be one less stupid american car company. with the additional debt ford is taking on and declining sales (why buy a ford) hopefully this company will have its common stock pulled from the market. why would anyone buy a ford with the possibiliy that the car may be an orphan after the company fails. be smart buy smart asian products.
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KT 10:50AM (12/15/2006)
First, let me say, Paul you're an idiot.
Now, on topic, '07 will be down from years past unless the Fed begins to drop rates by mid year. But if the economy continues to slow down in the big ticket item market, things will be slow.
Looks like it will be a really rough year for Chrysler (despite what the one media guy said after seeing their crop of show cars).
http://www.nytimes.com/2006/12/15/business/15chrysler.html?_r=1&ref=business&oref=slogin
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Professor Porsche 10:45AM (12/15/2006)
HONDA AND TOYOTA!! TOYOTA AND HONDA!!!
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Hamud 11:08AM (12/15/2006)
#4 Your comment was so ridiculous that it even made me laugh... Professor, you'r not so far away from been ridiculous too.
Sales might not be that good, but they will still sell a lot of cars. The question is: how much profit you can make on each product?
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Professor Porsche 11:20AM (12/15/2006)
"5. HONDA AND TOYOTA!! TOYOTA AND HONDA!!!
Posted at 10:44AM on Dec 15th 2006 by Professor Porsche"
In fact this was not posted by myself but by somebody else using my name.
That's OK with me, and I also am amused.
In case somebody there does not have a clue, the message means that,
for mid- and low-priced Autos, you still cannot beat Honda and TOyota, and even the other Japanese makers and VW are far inferior
( the domestics are so inferior it is not worth discussing).
Oh, and BTW, if you oractically GIVE AWAY the irrelevant POS you make, you will still make lots of sales, but NOT even a fraction of the profits that Toyota makes, IF you make ANY.
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Claire the lune 11:19AM (12/15/2006)
Yea, Yea, Yea, and the cow jumped over the moon, the dish ran away with the spoon, and the doomers and gloomers crapped in their bloomers.
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Jeff 12:15PM (12/15/2006)
guys guys, none of the current American automakers are going out of business. This is a normal business cycle. A company the size of Ford, GM or Chrysler cannot turn around on a dime. Yes, they missed the mark on the SUV thing, but remember for years, they could not make enough of them. The gas price increase, hurricane, and fed raising interest rates all hit suddenly and it takes years to develop new product and get it to the market.
All of the wishing the demise of GM, Ford or Chrysler is just wishful thinking from some America bashers, it ain't gonna happen.
In a couple years when there is record growth (hey, it's easy to post grrowth figures when you're comparing to the past two or three down years), the stock price will go up and the doomsdayers will be scratching their heads and complaining about the Big 2.5 making too much money. You see, these guys hate American cars, they hate American companies and are looking for any excuse to talk trash.
'nuff said on the topic.
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Professor Porsche 12:55PM (12/15/2006)
"none of the current American automakers are going out of business."
yes
" This is a normal business cycle."
NO. a HUGE NO, and only a blind person that is historically illiterate would say that.
The ONETIME "big 3" (now the troubled 2.5) have been LOSING HOME GAMES to the Japanese for 35 years IN A ROW. I cannot think of a sports team THAT lame.
Meaning they have been losing HUGE CHUNKS of MARKET SHARE YEAR AFTER YEAR, regardless of your CLUELESS "business cycle" comment.
MICHIGAN is the ONLY ONE out of 50 states in the USA that has a recession and high unemployment right now.
How come your preciousd "business cycle" could NOT affect ANY OTHER OF THE 49 STATZES, but only MICHIGAN?>??????
HOw can I take the rest of your clueless post seriously?
How can YOU and the LOSERS in Detroit EVER ACHIEVE ANY SUCCESS when they consider FACT BASED CRITICISM as .. basing and hate?
AND WHY do you claim Americans hate their car companies?
What would it be?
Would it be that they mAke IRRELEVANT and INFERIOR PROducts and are incapable and inflaxible to swing with the changind demands for FUEL EFFICIENCY by the consumer?
Now, just as they failed in 73 and 79 and 82 and..and???
Give us a break.
TRY to learn from your DISMAL FAILURES.
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Lithous 1:14PM (12/15/2006)
Professor Porsche sure reminds me of big dumb Thor (aka voice of Sponge Bob's Patrick character) who was posting on here a bit ago. With typing like "TOyota" and "HOnda" he fat fingers the second letter as a cap all the time. And all the "yelling" he is doing by not using asterisks but instead over capitalizing.
Anyway, he apparenty knows nothing about reality if he believes what he writes.
Facts escape him for sure.
You aren't doing a very good job without any facts what-so-ever big dumb Professor Thor Patrick Porsche.
http://www.youtube.com/watch?v=WYCUxDHfgiY
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Big Daddy 1:25PM (12/15/2006)
The ladies aren't up for riding a new Ford or GM, because they are busy riding me.
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Richard Warren 1:27PM (12/15/2006)
A lie told enough times becomes the truth and urban legend.
Well Professor, you really do need to go back to school and get your degree, because it's obvious you don't have one. Just a few things:
Failures? In November sales of the following were up, Buick 11.6% Caillac 20.3% Chevrolet 3.0% Saturn 23.8% GMC 30.1%
3,730,840 Vehicles sold through end of November. Hmm not moving product?
2006 293,558 2005 276,777 6.1% increase in light vehicles sales with virtually no rebates and after last years "Employee" sales.
Keep this in perspective, GM makes and sells about the same number of vehicles in NA that it did in it's heyday with close to a 50% of market (the market then was much smaller as a total number of new). That was with two other makers that counted back then. When we talk about market share look at the number of makers selling here now. Folks tend to look at a simple answer, or in your case a stupid answer.
On the financial side regarding "all those years of losses" Another urban legend, and it's easy to prove, the financial information is right out there.
http://www.gm.com/company/investor_information/earnings/hist_earnings/index.html
• GM EARNS $1.5 BILLION, OR $3.23 PER SHARE IN CALENDAR-YEAR 2001 FOURTH QUARTER EARNINGS TOTAL $255 MILLION, OR $0.60 PER SHARE
• MARKET MOMENTUM, COST REDUCTIONS, STRONG CASH GENERATION ARE KEY DRIVERS
• GMAC HAS SEVENTH-STRAIGHT YEAR OF EARNINGS GROWTH
• For 2002, GM earned $1.7 billion, or $3.35 per share Excluding Hughes and special items, $3.9 billion, or $6.98 per share
• In the fourth quarter, GM earned $1.0 billion, or $1.71 per share Excluding Hughes, $934 million, or $1.67 per share
• Record revenue, market share gains in three automotive regions, strong cash generation, and improved cost performance were key highlights in 2002
• GMAC posts eighth straight year of earnings growth
• GM Earns $3.8 Billion, or $7.14 Per Share in 2003 -- Adjusted EPS of $5.62
• Fourth Quarter Earnings $1.0 Billion, or $2.13 Per Share -- Adjusted EPS of $1.47
• GMAC Posts Ninth Straight Year of Earnings Growth
• GM Generated More Than $32 Billion in Cash in 2003
• GMAC Posts Record 2004 Earnings, 10th Year of Net Income Growth
• Global Automotive Earnings Rise in 2004, Sales Volumes Gain 4.3 Percent
• Record 2004 Revenue of $193 billion
General Motors Corp. (NYSE: GM) today reported a 2005 calendar-year loss, excluding special items, of $3.4 billion, or $5.99 per share, compared with net income of $3.6 billion, or $6.37 per share, in 2004.
Including special items, GM reported a loss of $8.6 billion, or $15.13 per share for 2005, compared to net income of $2.8 billion, or $4.92 per share in the year-ago period. Revenue was $192.6 billion in 2005, compared to $193.5 billion in 2004.
And at the moment, GM for all Toyota's crowing, is still the number one vehicle maker in the world. Failure? Hmmmm
What has failed is the education system that taught you.
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Professor Porsche 1:55PM (12/15/2006)
Oh yeah, keep whistling in the dark.. do not admit the reality,
ans as for TOyota overtaking GM in Sales ALSO, it will only be a matter of a couple of years.
AND in fact, if you do not foolishly measure it in "number of cars" but in $ of business sales, Toyota is ALREADY well above GM, ford and everybody else,
because it does not have to sell its SUPERIOR PRODUCTS at FIRE SALES PRICES like FORD AND GM
Wallow in your DEEP DENIAL, Big 3 LOSERS.
SERIAL LOSERS OF HOME GAMES 35 years in a row.
And instead launch personal attacks at the MESSENGER that brings you the REALITY of your bad news.
Losers...BEYOND SALVATION.
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Professor Porsche 2:08PM (12/15/2006)
"Failures? In November sales of the following were up, Buick 11.6% Caillac 20.3% Chevrolet 3.0% Saturn 23.8% GMC 30.1%"
Thissentence above shows 100% clearly WHAT IS WRONG with the morons that run the big 3, the idiots that consider success every MONTH that they do better compared to their DISMAL Month last year, and Do not care to see the DISMAL FAILURES 35 years in a row.
(and The Japanese do better building their cars RIGHTG HERE int he US than the FORDS building their cars in MEXICO.)
"3,730,840 Vehicles sold through end of November. Hmm not moving product?"
Sure... if you give it away to RENTAL FLEETS. Ever came across a HONDA rental?? LOL!!!
AND even to non-rental customers, if you give it away with up to $8,000 in INCENTIVES? SOME PRODUCT! LOSERS...
"Keep this in perspective, GM makes and sells about the same number of vehicles in NA that it did in it's heyday with close to a 50% of market (the market then was much smaller as a total number of new). "
THIS SHows 100% how UTTERLY CLUELESS you are!!!!!!
In its heyday, clueless idiot, GM was selling to a nation HALF THE SIZE of the USA today! (150 MILLIOIN vs 300 MILLION), and, what's MORE important, that population today has FAR MORE Income than THEN! EVEN ajdusted for inflation, idiot!
IF things were the SAME, as you CLUELESSLY imply, WHISTLING IN THE DARK,
GM should sell TWICE the cars today that it sold TZHEN,
and, the eaSIEST WAY TO SEE I5T, IT SHOULD HAVE THE EXACT SAME MARKJET SHARE!!!!!!
iNSTEAD, ITS MARKET SHARE WENT FROM ITS HEYDAY AT 50-55% TO TODAY'S DISMAL, LAME 25%-27%!!!!
but TO NOT LISTEN TO THE TRUTH, GM APOLOGIST...
GO AHEAD, MAKE MY DAY, INVEST YOUR HARD EARNED OR EASILY INHERITED $, IF ANY, IN GM SHARES FOR THE FUTURE OF YOUR KIDS.. I DARE YOU
(AND IF YOU DO, I WILL NOT BE SURPRISED, A SUCKER IS BORN EVERY GOD DAMNED MINUTE.. YOU CANNOT LEGISLATE AND OUTLAW STUPIDITY, RETARD!)
AND THEN YOU QUOTE PROFITS, MEASLY LITTLE PROFITS OF LESS THAN 3%! (3 BILLION ON 200 BILLION OF SALES????? IS THIS ACCEPTABLE?? whY DOEN'S gm GO PUT ITS CASH IN A LOSER SAVINGS ACCOUNT INSTEAD?)
aS FOR THE PER SHARE NUMBERS, THEY ONLY LOOK DECENT BECAUSE THE VALUE OF A SHARE OF gm HAS PLUYMMETED.
TOYOTA CAN BUY THE ENTIORE GM 20 TIMES OVER, SO STRONG IS ISTS STOCK.
BUT KILL THE MESSENGER THAT BRINGS YOU THE TRUTH, INSTEAD OF TRYING TO IMPROVE, ARROGANT MORONS IN DERTOIT, IN BED WITH THE CORRUPT, MOB INFESTED, CRIMINAL UNION LEADERSHIP!
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C. McFeeny 2:49PM (12/15/2006)
Porche -- What is your point? I mean, really. You're a broken record. HOnda & TOyota = good. GM & Ford = BAD. Plenty of people that work for and work at these companies here in the greater Metro Detroit area realize that there are many, many problems with the big two point five. I try to to my small part to help improve things where I can.
I live in Detroit, my family is from Detroit -- I don't want to move anywhere else. I could get a job elsewhere in another industry, but I like it here. Living here and working here in the high tech field means working for the automotive industry. It's pretty easy to sit in your ivory tower and throw thunderbolts of browbeating criticism.
At the very least you could be making constructive criticism ala Mr. Farago at thetruthaboutcars.com. But apparently intelligent discourse is not your style.
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Lithous 2:55PM (12/15/2006)
Thissentence above shows 100% clearly WHAT IS WRONG with the morons that run the big 3, the idiots that consider success every MONTH that they do better compared to their DISMAL Month last year, and Do not care to see the DISMAL FAILURES 35 years in a row."
Hmmm. so if their dismal month last year was still better than Toyota then what does that make Toyota's sales? You don't want to admit that what goes up *must* come down. GM had such huge percent of the market that it was innevitable for it to fall. But again, if GM's sales were dismal and Toyota had less then Toyota's sales must have been worse than dismal. It is a free country, if fleet or anything else is counted, which GM is doing less of these days then Toyota could do the same. Toyota does have fleet even in our military thanks to (former?) autoblog readers like Takeo.
"AND even to non-rental customers, if you give it away with up to $8,000 in INCENTIVES? SOME PRODUCT! LOSERS..."
The things that are $8K incentives are usually the large SUVs in which GM still makes money total for the year on them. Though, the Toyota-sell-a-thon I saw a commericial for the other day in which 2007 models were being sold at deep discounts might be an indicator that having a sale isn't below any company (accept Oakley and Gucci).
"GO AHEAD, MAKE MY DAY, INVEST YOUR HARD EARNED OR EASILY INHERITED $, IF ANY, IN GM SHARES FOR THE FUTURE OF YOUR KIDS.. I DARE YOU"
Tons of people have made money off of GM in the last 6 months. Making money is making money.
"TOYOTA CAN BUY THE ENTIORE GM 20 TIMES OVER, SO STRONG IS ISTS STOCK"
OK Yoda. Then they should do it. I know, they wouldn't want to according to you but if Toyota was so great they could buy Yugo and make it better than Lexus in a year (at least at your level of perception of them). The truth is we only really get stats on reliablity of U.S. vehicles shown to us. And it just happens that GM sells many more vehicles where we get the stats. Toyota could sell the biggest pieces of crap in Thailand and most of Asia and where ever and it isn't counted in the Consumer Reports ratings. So they make half as many for sale here (slightly more this year but 2005 sales were half of GM's in the U.S.) and so of course the number are going to be very different as far as reliability. Take stupid perceptions out and so many people writing books and making movies about how bad GM is and say they did it to Toyota instead (but of course they are perfect and even Jesse Jackson couldn't find anything wrong with Toyota to extort money from them, oh, wait he did) and the outcome is nothing like what is going on right now.
"BUT KILL THE MESSENGER THAT BRINGS YOU THE TRUTH, INSTEAD OF TRYING TO IMPROVE, ARROGANT MORONS IN DERTOIT, IN BED WITH THE CORRUPT, MOB INFESTED, CRIMINAL UNION LEADERSHIP!"
Anyone who states that GM isn't trying (and isn't succeeding) to improve is a sad individual in total denial.
Toyota is on a roll but will it last more than 75 years as #1? We'll have to see.
But have a great day Minister of Misinformation.
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Professor Porsche 3:01PM (12/15/2006)
18. Porche -- What is your point?
My points are painfully obvious, and I am suprised you do not see them.
Obviously the Big 3 or 2 or 2.5 or, more accurately, the ONCE big whatevers, fail to see them either, and that is the reason of their demise.
(whether they literally go bankrupt or not).
I will resent if some clueless president after 2008 makes welfare queens at oour(the taxpayers and the car buyer's) expense of the Big 3
The otherwise great Ronald Reagan did that with the unacceptable, protectionist, so-called "voluntary import quotas" when he twisted the arms of the Japanese to limit their impoorts to the USA to a number far less than the consumers, the US consu,ers., wanted.
It made the Japanese car dealers and the japanese wealthy beyond any reason, and the poor consumers had to pay $2,000-$3,000 extra for a small car, ($5,000-$7,000 in today;s $),
OR, as I did, buy a POS 5-speed 4-door 46 MPG Highway , 28 city Pontiac 2000, and get what little I paid for.
Very basic transportation that had to be JUNKED at 11 yrs and only 65,000 gentle miles.
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