Autoblog

With sales of the Mercedes-Benz S-Class down 23 percent in the United States, and off nearly 12 percent worldwide, Daimler officials are showing concern. The luxurious S-Class is the most profitable model in the lineup, contributing up to an estimated 25 percent of Daimler's pre-tax profits, the drop is getting painful. With the exception of the new C-Class (up 38 percent), overall sales for the German automaker have fallen in the first six months of the year. In response, Daimler is diverting shipments of vehicles to China and Russia as those emerging markets have yet to see a slowdown.

[Source: Automotive News, subs. req'd]

The amount of automotive dealerships in the United states is staggering. Domestic dealerships alone number over 15,000 in the US. For perspective, there are less than 13,000 McDonald's restaurants in the US. At the current rate, the Detroit three's dealerships are shrinking at a three- to four-percent rate, much slower than share declines that are crippling the domestic automakers.

The sales number gaps between the domestics and Asians is equally astonishing. Your average Dodge dealer sells only 375 vehicles per month year. In stark contrast, your average Toyota dealership hits nearly 1700 sales in the same time period. Steven Girsky, an industry analyst and former GM adviser, placed the desired amount of downsizing at two-thirds of the entire domestic dealer-body.

While most domestic auto dealers will tell you that there are too many dealerships out there, they are understandably inclined to think the other guy should shut down instead of them. Others are looking for corporate buyouts from the Big Three, but Ford, GM, and Chrysler just can't afford to foot the bill for a combined 10,000 closures, many of which would cost well over $1 Million dollars. Ford and Chrysler are actively trying to buy out dealers, but GM is saving its money for more new product. The targeted dealer buyouts from Ford and Chrysler will likely be far fewer than what is needed. Overall, this means little to you the customer. If you're in the mood for a new car and don't want to spend all day waiting to be assisted, it may be a good idea to hit your neighborhood Dodge dealer. You can walk in the door and have no trouble finding a salesman that's willing to deal to get a sale.

[Source: Detroit News]

In the 'this is not news' department, Honda and Toyota are going to steal market share from General Motors and Ford. The only part of the story that changes is the date. This time the headline holds true for January 2007. Gas prices hit $2 per gallon in January, about 50% lower than in January 2006. That, combined with winter weather, would usually mean a spike in sales of SUVs and trucks, but at this point the American public seems to know better. The shift has been made, and fuel efficiency is winning the day for now in the grand old USA.

The main reason GM and Ford aren't selling at 2006 levels is that both companies are trying to rely less and less on fleet and mega-discount sales. Ford has cut production for the first half of 2007, which can largely be attributed to less fleets since both the Taurus and Freestar minivans have been canceled. The new Edge and MKX should ease some of the burden, but it'll take months before dealer lots are properly stocked with the hot new crossover. GM, meanwhile, is ramping up Silverado production as fast as it possibly can, but it will take a few months before all cab configurations are available.

With Americans pining for crossovers and smaller sedans, Honda and Toyota simply offer more choices. If you're looking for a small entry-level sedan from Ford, you have your choice of Focus. Toyota, on the other hand, has the Yaris, Corolla, and pick your Scion. Honda has the Civic and Fit. GM does have the Cobalt and Aveo, but neither vehicle approaches the sales volumes of the Asian counterparts. We think we'll see plenty of these headlines in 2007, so if you're tied to the domestic automakers in any way, you've been forewarned.

[Source: Detroit News]