By the Numbers - October 2008: "Thanks, GMAC!" Edition
by John Neff on Nov 3rd 2008 at 4:00PM 
Sales for the month of October 2008 were... ahem... not good. The auto industry in the U.S. has found a way to slide further into oblivion with only a few bright spots from Audi and MINI, the latter of which enjoyed monster sales last month we suspect on account of greater production capacity this year versus October 2007.While all the major players were down, General Motors, the largest of them all, was hit the hardest. Its sales volume for October 2008 fell 45% compared to last year. It went from selling an average of 11,923 cars per day in October 2007 to just 6,318 last month. Each of its brands were down, with HUMMER taking the Biggest Loser crown (yet again). The real story, however, is how close behind the other brands were, with Cadillac falling 55.1%, Buick 46.3%, Chevy 40.3%, GMC 52.5%, Pontiac 48.2% and Saturn 54.6%.
What can account for GM's entire brand portfolio taking such a hit? GMAC, the financing arm of General Motors that's majority owned by Cerberus. Halfway through the month GMAC decreed it would only lend money only to buyers with a credit score above 700, which effectively wiped out in-house financing for the majority of GM customers. While dealers could still work with banks to secure financing (and were encouraged to do so), it appears the damage wrought by GMAC could not be undone.
| BY THE NUMBERS - October 2008 | ||||||
|---|---|---|---|---|---|---|
| Brand | Vol. % Change | Total Sales 10/08 | Total Sales 10/07 | DSR % Change | Daily Avg. 10/08 | Daily Avg. 10/07 |
| Acura |
-21.56% | 10,108 | 12,886 | -24.46% | 374 | 496 |
| Audi | 0.3% | 7,443 | 7,420 | -3.4% | 276 | 285 |
| BMW | -13.9% | 20,203 | 23,451 | -17% | 748 | 902 |
| Buick | -46.3% | 7,642 | 14,231 | -48.3% | 283 | 547 |
| Cadillac | -55.1% | 9,541 | 21,267 | -56.8% | 353 | 818 |
| Chevrolet | -40.3% | 107,313 | 179,825 | -42.5% | 3,975 | 6,916 |
| Chrysler | -50.8% | 19,903 | 40,440 | -52.6% | 737 | 1,555 |
| Dodge | -27% | 53,267 | 73,020 | -29.75% | 1,973 | 2,808 |
| Ford | -27.9% | 114,969 | 159,361 | -30.5% | 4,258 | 6,129 |
| GMC | -52.5% | 21,109 | 44,456 | -54.3% | 782 | 1,710 |
| Honda | -25.66% | 75,756 | 101,913 | -28.41% | 2,806 | 3,920 |
| HUMMER | -64.6% | 1,368 | 3,864 | -66% | 51 | 149 |
| Hyundai | -31.1% | 20,820 | 30,232 | -33.7% | 771 | 1,162 |
| Infiniti | -28.5% | 7,112 | 9,954 | -31.2% | 263 | 383 |
| Jeep | -32.9% | 21,360 | 31,856 | -35.4% | 791 | 1,225 |
| Kia | -38.5% | 15,483 | 25,185 | -40.8% | 573 | 969 |
| Lexus | -35.2% | 16,283 | 25,119 | -37.6% | 603 | 966 |
| Lincoln | -27.7% | 7,399 | 10,229 | -30.3% | 274 | 393 |
| Mazda | -25.9% | 16,442 | 22,201 | -28.7% | 609 | 854 |
| Mercedes-Benz | -34.3% | 14,996 | 22,820 | -36.7% | 555 | 878 |
| Mercury | -47.4% | 6,753 | 12,844 | -49.4% | 250 | 494 |
| MINI | 56.4% | 5,272 | 3,370 | 50.6% | 195 | 130 |
| Mitsubishi | -19.3% | 7,486 | 9,280 | -22.3% | 277 | 357 |
| Nissan | -33.5% | 49,833 | 74,992 | -36% | 1,846 | 2,884 |
| Pontiac | -48.2% | 13,054 | 25,182 | -50% | 483 | 969 |
| Porsche | -50.1% | 1,427 | 2,862 | -52% | 53 | 110 |
| Saab | -13.2% | 1,975 | 2,275 | -16.4% | 73 | 88 |
| Saturn | -54.6% | 8,583 | 18,908 | -56.3% | 318 | 727 |
| Subaru | NA | |||||
| Suzuki | -46.7% | 3,482 | 6,536 | -48.7% | 129 | 251 |
| Toyota | -21.3% | 135,818 | 172,473 | -24.2% | 5,030 | 6,634 |
| Volkswagen | -7.9% | 15,889 | 17,260 | -11.4% | 588 | 664 |
| Volvo | -52.1% | 3,717 | 7,761 | -53.9% | 138 | 299 |
| COMPANIES | ||||||
| BMW Group | -5% |
25,475 |
26,821 |
-8.5% |
944 |
1,032 |
| Chrysler LLC | -34.9% | 94,530 | 145,316 | -37.4% | 3,501 | 5,589 |
| FoMoCo | -30.2% | 132,838 | 190,195 | -32.7% | 4,920 | 7,315 |
| General Motors | -45% | 170,585 | 310,008 | -47% | 6,318 | 11,923 |
| Honda Amer. | -25.2% |
85,864 |
114,799 |
-28% |
3,180 |
4,415 |
| Nissan NA | -33% | 56,945 | 84,947 | -35.4% | 2,109 | 3,267 |
| Toyota Mo Co | -23% |
152,101 | 197,592 | -25.9% | 5,633 | 7,600 |
Update: Dodge numbers fixed.
Reader Comments (Page 3 of 5)
Samurai Jack 7:03PM (11/03/2008)
No, if sales stay depressed like this and manufacturers are forced to cut prices to make sales we're all in for a world of hurt. Why would they continue to make cars if they know the value is just going to drop, or that they'll take a loss on the sale? Why would you buy a car now if you reasonably believe the price for the same vehicle will be lower next month? Along this path lies layoffs and deflation. Believe me, we do not want to go there.
I think it's clear we're about to witness a major shift in the auto industry. Smaller more efficient cars are just the beginning...
Iridium 5:01PM (11/03/2008)
The biggest problem is that there are just too many cars being sold. Along with how many cars were sold over the past 10 years there is an incredible glut of used cars on the market as well. This has caused the value of used cars to plummet. All of the incentives didn't help either.
Residual value is just piss poor on almost everything other than hybrids. Why would you buy a new car when you can get a 2005 with low miles that sold for $17-20k new for $10-12k all day long.
Just like the housing market the US auto industry overbuilt and caused the economic collapse of itself.
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Soccer Mom 5:04PM (11/03/2008)
I am actually surprised that Hummer still sold something. That is a major accomplishment. Same goes for Saab.
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Purifoy 5:21PM (11/03/2008)
Talk about pain and suffering!
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Noidor 5:24PM (11/03/2008)
I've always suspected that for most part, people who buy GM products do not have excellent credit history, and probably no college degree. But this is the direct result of GM pushing the deal rather than the product. So all the people with money & credit went elsewhere, while those without went to GM for cheap leasing/financing. Not that hard to figure out. Again, this is somethng I've been saying for years.
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alex 5:32PM (11/03/2008)
You really are slow, aren't you?
All the people who have money, a good credit history (700+) had no problem getting a loan to buy a GM product; read the story genius. People with worse credit were not able to get a loan, due to Cerberus' doing, therefore could not buy a GM product. All of the other manufactures did not have such issues of getting loans for their customers (good AND bad credit).
If you have one, you need to have your college degree taken away from you.
Noidor 6:16PM (11/03/2008)
Alex, I don't think I'm slow, but thanks for the "compliment". Unfortunately I believe that you are the one with comprehension handicap. All I merely said was that the major reason why GM has been losing such a huge chunk of sales is partly due to people with less then perfect credit being unable to qualify. They are the ones who make up most of GM's customer base.
Those with better credit are buying other products from other manufacturers. So what am I trying to say? If GM would have avoided making all its brands as "value brands" then the current damage would not have been as severe.
I'm right, you're wrong, I'll hold on to my qualifications...thanks
knifetramp 7:26PM (11/03/2008)
"All I merely said was that the major reason why GM has been losing such a huge chunk of sales is partly due to people with less then perfect credit being unable to qualify. They are the ones who make up most of GM's customer base."
Total rubbish. The 700 credit score affects 1/3 of the folks applying for credit to buy/lease a GM vehicle. Your comments that GM buyers are low-educated with credit problems is laughable.
GM suffers from having Cerberus/GMAC hold a gun to GM's head. I think it's clear that selling Chrysler to Cerberus has been a complete disaster.
Mike 8:25PM (11/03/2008)
Noidor,
If financing across the board on car loans were capped at a 700 score and the numbers were what they are, then you'd have a leg to stand on.
Since it is only the financing arm of one company putting on that cap, it makes sense that the affected company's sales would slip at a greater rate than it's competitors who aren't handicapped by the same situation.
Now I won't go as far as to recommend you turn in your college degree, but if it's in business or financing, you may want to take a refresher.
Noidor 12:22AM (11/04/2008)
Mike,
Reason why other companies won't implement the fico>700 rule is because they already have guidelines that are stringent enough to drive away any potentially credit unworthy customers (maybe w/ slight exception of Toyota). Because remember, it's not just about the FICO (score is the score and that's that), but also additional open lines, payment history...full blown credit evaluation.
It GM's constant chase for volume with value brands and GMAC' lax standards, which contributed to the mess that they're in right now.
BigWill 8:20AM (11/04/2008)
"Because remember, it's not just about the FICO (score is the score and that's that), but also additional open lines, payment history...full blown credit evaluation."
What do you mean "score is the score and that's that"? You're implying that open lines and payment history have nothing to do with the FICO score and that's flat out wrong. There are 5 broad categories that comprise the FICO score which are:
1) Payment history
2) Amounts owed
3) Length of credit history
4) New credit
5) Types of credit in use
Under those 5 broad categories are approximately 20 specific items that determine the FICO score. About the only thing extra to consider for a car loan is employment history.
http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf
P.V. 5:35PM (11/03/2008)
Wow. Just when I thought it couldn't get any worse.
I'm surprised that MINI posted such a huge percentage increase.
I'm also surprised that Honda's percentage drop is bigger than Toyota's. Is there any explanation for this? Is it because Honda can't push their cars off the dealer lots, or because they don't have sufficient inventory?
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Chris 6:01PM (11/03/2008)
Its not like Mini had all that many models last year.
Plus refreshes help a lot.
ron 7:00PM (11/03/2008)
Where's the numbers for the Smart car???
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why not the LS2LS7? 7:54PM (11/03/2008)
Another cause for the bad GM numbers is GM doesn't have a big deal sale going on, unlike Toyota's 0% offer.
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montoym 8:20PM (11/03/2008)
That probably didn't help I'm sure.
Nonetheless though, it is interesting to note that despite the huge drop from GM, it still managed to outsell Toyota by over 18K units(effectively their main competition). That's a fact that is lost when looking solely at the percentage drops and not the # of vehicles sold.
sj 8:47PM (11/03/2008)
Its amazing that people will look at a 33% drop from Nissan or a 25% drop from Honda and say nothing. If only the Big 2.5 posted numbers like that we would get endless posts about how their management teams should be fired. Also, Toyota manages a 2% decline WITH ZERO % FINANCING. That is NOT good but the media and posters here dont even blink an eye. Toyota launches an unprecendented incentive campaign and barely does better than Ford last month. That is major to me and shows that even with incentives their product mix isnt right for this market. Lexus is doing terribly which suggests that the theory about GM doing bad because it has low credit, uneducated customers seem pretty stupid. Lexus got outsold by BMW again which suggests BMWs customers must be fairing better than Lexus' in this economy. If GM had normal lending from GMAC and a major 0% offer I suspect they would have done better. Conversely if Toyota didnt have such an aggressive program they probably would have been down 30%+ last month.
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s10 9:01PM (11/03/2008)
Well obviously the whole market is down.. but some are falling harder than others.. that's one reason more attention goes to the big 2.5...
Another reason is that these are figures for the big 2.5 main market, while for the other makes it is not their main market.
Regarding BMW and Lexus... The average Lexus buyer is normally older than the average BMW buyer... so different income patterns... maybe this has something to do with it?
s10 9:05PM (11/03/2008)
...and these figures are just an indication...
Toyota/Lexus sold 45,491 cars less while GM sold 139,423 cars less... that is a huge difference.
RedLineTire 9:10PM (11/03/2008)
Good, insightful points sj.
But please drop the 'blame the media' bunker mentality. It has to be the most over-played phrase in use today.