Detroit Car Makers Experience August Sales Slump, Cash for Clunkers Heavy Influence
Detroit car makers saw a decrease in sales year-over-year in the month of August mainly because of the inflated sales results from last year's Cash for Clunkers program.
Though the plunge from August 2009 data was significant, it was expected.
"Last year's Cash for Clunkers program spiked industry sales in 2009, so results this August were, not surprisingly, a bit mixed," Don Johnson, vice-president for General Motor's U.S. sales operations, said in a statement. "Importantly, three of our four divisions showed solid gains."
Those brands included Buick, GMC, and Cadillac, which were up 37 percent combined when compared with August in 2009. Buick saw a huge jump of 66 percent, Cadillac soared to 83 percent over last year and GMC rose 12 percent. General Motors saw a 25 percent drop year-over-year, though the company still holds the largest market share.
Ford experienced an 11 percent drop, and Chrysler managed to gain with a 7 percent increase selling 6,389 more units over last year; Chrysler numbers, however, reveal an abnormal success story because the majority of its factories were shuttered last year during bankruptcy proceedings preventing the automaker from taking full advantage of the Cash for Clunkers program.
Ford was the second of the three Detroit car makers that experienced a decline, but the company cited strong sales among the F-Series truck, E-Series Van, Taurus and Mustang retail sales.
Ken Czubay, Ford vice president, U.S. Marketing Sales and Service said in a statement, "The Ford plan is to match capacity with the real demand, and we continue to monitor the key economic indicators as we make adjustments."
Chrysler, the only company reporting a positive gain among Detroit car makers for year-over-year August sales, also achieved a 7 percent gain over last month's July sales.
"Chrysler Group is proud that we have beaten or matched the average industry sales increase for the fifth consecutive month this year and for the calendar year to date," said Fred Diaz, President and Chief Executive Officer – Ram Truck Brand and Lead Executive for U.S. Sales, in a statement. "This is proof positive that we are accomplishing our goals – steady, sustainable growth. We will continue to build on this momentum as we begin production on a stream of new product through the end of this year."
Aside from Detroit car makers many automakers took a hit in sales for the month of August for year-over sales. Toyota dropped 34 percent, Honda dropped 33 percent, Nissan fell 27 percent, Mitsubishi plunged 37 percent, and Hyundai decreased by 11 percent.
Last year aside, according to an article released by IHS Global Insights overall sales for all automakers continue to fall. "Sales have been declining for the middle part of this year, falling another 5% from July and giving rise to concerns that the hoped-for recovery of the auto market in the United States has in fact stalled," the article reported.
Luckily, 2011 models continue to roll out including never-before-seen models being released by Detroit automakers, such as new hybrid versions and gas-electric-hybrid vehicles like the Chevrolet Volt; however, automakers still have to face a sluggish economy, an unemployment rate that's relatively unchanged from June 2010, and weak housing market that all contribute to discouraging consumers from spending.
[Source(s): IHS Global Insights, Motorintelligence.com, The Detroit News, GM, Chrysler, Ford, Associated Press]
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