Eventful First Half Left Market Where It StartedBy Dale Buss July 8, 2011
For auto makers in the first half of 2011, success and failure, growth and decline in the U.S. market was fairly neatly defined by where they were from and in what segments they had vehicles available. Japanese brands mostly suffered, and American, Korean and European makes for the most part prospered at the opportunity to pick up sales and market share from them. Meanwhile, consumers snapped up small cars, fuel-efficient crossovers and, surprisingly, pickup trucks -- wherever and by whomever they were made and offered -- while large cars, large utility vehicles, luxury models and supply-constrained hybrids and all-electric nameplates basically only held their own.
Anomalous events also dominated the course of those six months, beginning with Americas second gasoline-price spike to more than $4 a gallon in less than four years, followed by the epochal March 11 earthquake and tsunami in Japan, and ending with a softening of the U.S. economic recovery that made it the slowest-developing bounce-back on record. So the market ended on the sour note of a seasonally adjusted annual rate (SAAR) of only 11.4 million units in June, the worst month of the year so far, after peaking at 13.3 million units in April. Year-to-date, auto sales are 6.3 million, 12.8% above last year.
And yet, most automaker executives and outside analysts interpreted the way the half-year ended up on a rather positive note for what it may have portended for the second half of 2011. It was really hard to draw a bead on the underlying trends in the market because of all these huge surprises that really dictated what went on from month to month, said Jessica Caldwell, the senior U.S. industry analyst for Edmunds.com. And where we ended up at the end of June was pretty much where we began in January: with a market in definite recovery mode, though not a strong one; higher demand for fuel-efficient vehicles; and more potential for market-share losses by Japanese brands, and gains against them by their rivals, than ever before.
George Pipas, head of U.S. industry analysis for Ford, said that the industry was running at a SAAR of more than 13 million units through April. If [May and June] would have been normalized by sufficient inventory by us and the Japanese, he said, we would have had a first-half sales rate of around 13 million units."
Gasoline-price increases that began late in 2010 skewed the market significantly in the first half of 2011. The pump-price run-up scared American consumers into hugely higher consideration and purchase of small cars during the first half, which gained 9.1 percent as a segment over the year earlier. Midsize-car sales rose 21.5 percent during the half, while large-car sales decreased by 4.4 percent. Sales of small and midsize SUVs took off like a rocket, rising by 33.9 percent and 18.8 percent respectively, as they clearly met the changing target of many American consumers both in attributes and availability. Meanwhile, sales of luxury cars rose by only 0.4 percent and luxury SUVs by 8.9 percent.
The scramble for small cars put an initial strain on supplies even as General Motors, with the Chevrolet Cruze (top); Ford, with a new Focus and a nearly new Fiesta; and Hyundai and Kia were ramping up output. When the bottom suddenly dropped out of Japanese-brand supplies of cars made in Japan and North America in March, everything tightened up much more and fast. By the second quarter, dealers were furtively trying to ease shoppers into consideration of mid-size cars and small SUVs instead, and many buyers simply decided to wait until later in the year when their preferred Toyota Corolla, Honda Civic or Ford Focus would probably be available. The lack of inventory and higher prices constrained the U.S. market overall, and so did persistent economic uncertainties, as even a reversal in the gas-price trend couldnt rescue June sales comparisons with last year.
Incentives essentially disappeared on small cars by the second quarter, and transaction prices rose significantly. Incentives in June were at the average of $2,100 a car for the third consecutive month according to Edmunds.coms proprietary True Cost of Incentives formula, Caldwell said. We havent seen a run like that since 2002, where the industry has sustained incentives at such a low level for so long. And every OEMs incentives averaged below $3,000 a unit. Another result of the shortage, Caldwell noted, was that there wasnt a lot of opportunity for consumers to go to other brands [Toyota, Honda, Nissan] to get better deals there. Nothing was being sold at bargain-basement-type prices.
Trucks Drive On
Pickup-truck sales during the period actually illustrated the powerful but strange dynamics of the first half of the year better than any other segment, even though the small- and mid-size car segments were the most roiled by events. Americans demonstrated greatly increased sensitivity to gasoline prices as they rose robustly through most of the first two quarters, until June, and the erratic economic recovery offered only unpredictability in key business sectors such as construction and small companies. Those two factors alone might have produced unbeatable headwinds for pickup-truck sales. But instead, pickup-truck sales actually increased by 10.9 percent during the first half, in line with the gain posted by mid-size cars and nearly abreast of the entire markets 12.8-percent sales increase over the first half of 2010.
What happened? Purchases by commercial truck buyers who had waited out the Great Recession, including home remodelers and ranchers, fueled something of a cyclical recovery of the pickup segment even though they couldnt be entirely certain about the future of the economy. New six-cylinder F-150 models offered by Ford and an emphasis on mileage specifications by all players gave buyers who were worried about gas prices a reason to stick with the category anyway, while demand also paradoxically surged for new heavy-duty offerings by the major players. Too, when gas prices began easing in June, pickup sales almost immediately ticked up again. So sales of both the Ford F Series and the Chevrolet Silverado both grew about 10 percent during the period. And buyers recovered faith in Chrysler significant enough to boost sales of Ram pickups by 33 percent over the first half of 2010.
Combined with the bottleneck on small-car availability, these factors helped pickup trucks take a growing share of the first-half market. Full-size pickups were driving our transaction prices higher, Pipas said. Don Johnson, vice president of U.S. sales for GM, said that the company experienced very strong demand from dealers and in ordering for full-size pickups, to the extent that GM ended June with a 110-day-plus supply of pickups in inventory, a level that made outside observers uncomfortable. Were going to moderate inventories somewhat with some minor production changes but not with aggressive incentives.
Following is an analysis of individual automakers 2001 first-half performance, ranked by the best-performing of the Big 6 automakers (including a combined Hyundai and Kia) and the remaining automakers, in no particular order:
Hyundai/Kia: Probably Cant Get Any Better
Hyundai Motor America set an all-time U.S. sales record for first half of 2011, its 322,797 units sold shattering the first-half record established in 2010 of 255,782 sales. The record first half amounted to a 26-percent overall gain and Hyundai said retail volume grew by 38 percent. We are confident going into the third quarter that the company is on track for its best year ever, said Dave Zuchowski, Hyundai Motor America's executive vice president of national sales, in a release. Pretty safe statement, considering some of the first-half numbers for Hyundais individual models (first-half 2010 in parenthesis): Elantra, 103,331 (57,564); Sonata, 115,014 (89,249); Tucson, 23,537 (19,689) and Genesis, 15,454 (12,891).
But its not all peachy. The rampant success of Hyundais new midsize and compact cars means some buyers were diverted from the companys aging models, particularly the Santa Fe midsize crossover, where 34,821 sales in the first half was off almost 10,000 compared with last year and the fullsize Veracruz ran only about 800 units ahead of last years pace. First-half sales for the run-out Accent (the all-new 2012 model just went on sale) and Azera models also were down. The company also claimed the new Equus flagship a head-scratching addition to the U.S. lineup continues to delight premium luxury sedan buyers while exceeding sales and market-share targets. The Equus found 1,392 presumably high-income buyers in the first half.
At Kia Motors America, the story was much the same, although the numbers for Hyundais equally explosive sister brand 245,104 sales didnt quite work out to a record first half, although the brands total first-half growth was an impressive 44.1 percent. Kias 2011 first-half boom was fueled by a near-tripling of Sportage compact crossover sales to 25,369 (8,743); a 20-percent-plus climb for the Sorento midsize crossover and a searing first half for the Soul compact hatchback at 54,987 (28,637). Other big gainers in the expanding 8-model Kia lineup included the Forte compact car, with 43,022 (33,467) first-half sales and the Optima midsize sedan, with 36,617 (15,627) deliveries. Kias Sedona minivan is playing its last tune, with sales barely keeping pace with first-half 2010 and the Rio, Spectra and Rondo also are being phased out. The Borrego SUV was the only model staying in the Kia lineup that had a first-half sales decline.
Chrysler: Back in the Game
Perhaps the most remarkable performance of the first half of 2011 belonged to Chrysler Group LLC. Written off as a carcass just two years ago, the company rallied thanks to taxpayer funds and Fiats direction. For most of 2009 and 2010, Chrysler had little new product to offer. And even now that it is pushing fresh vehicles out of the pipeline, they arent revolutionary just yet. Still, mixing a handful of solid new offerings with some marketing magic and the focus offered by Fiat, Chrysler put together six months to remember: Overall U.S. sales grew by 21 percent, the most of any of the major automakers from 2010, to 639,932 units, including a 30-percent year-over-year gain in June alone.
This business is all about product, and consumers are rapidly discovering everything we now have, said Reid Bigland, head of U.S. sales for Chrysler. Each Chrysler Group brand is contributing to our success and driving our 46-percent retail growth. Bigland attributed part of the increasing attractiveness of Chrysler products to Fiat engineering, which has helped the company to be able to boast now of 12 models with EPA-rated fuel economy of 25 miles a gallon or higher, including four models that get 30mpg or more.
Of the brands, Jeep contributed the most to Chryslers vast improvement over a year earlier. An all-new Grand Cherokee, introduced last fall, became the first substantially overhauled new product that Chrysler could crow about in the post-bailout era. And sure enough, for the first half of this year, the new Grand Cherokee sold 114 percent more units than a year earlier. Similarly, the new Jeep Compass posted a 107-percent increase over a year ago. In June, another Jeep, the iconic Wrangler, was the brands best-seller, with sales of nearly 11,300 units, a 27-percent increase from a year earlier. Jeep posted 14 consecutive months of year-over-year sales increases through June.
Ram truck, separated as of last year from the Dodge brand, also has come through with flying colors for Jeep. Brand sales rose by 31 percent for the half, to more than 120,000 units, including a 32-percent gain for the Ram pickup, the full-size workhorse of the brand. Meanwhile, Dodge posted a 15-percent sales increase over the first half of 2010 even though the brands lineup now largely is predicated on the Avenger, Charger and Challenger muscle cars presumably a tough proposition in a fuel-conscious age. Sales of the new Durango SUV to the tune of nearly 24,000 units during the period, versus practically none a year ago, helped, as well as a 14-percent increase in sales for Dodges highest-volume vehicle, the Caravan minvan, despite tougher competition from Japanese entries.
But with apologies to Bigland, the auto business isnt all about product, because if it were the Chrysler brand would sell practically nothing. The new 200 hasnt been critically acclaimed as a reskin of the Sebring sedan it replaced. Yet Chrysler sold more than 32,000 of them during the first half, compared with sales of 21,000 Sebrings a year earlier, largely on the strength of the now-famous Super Bowl TV ad starring the 200, Eminem, and the city of Detroit. Imported from Detroit has come to stand for a new attitude not only on the part of the brand but also for the company as a whole. And as Fiat continues to fill out and replace Chryslers product line with more tangibly worthy offerings, effective marketing may have to continue to carry a good part of the load for Chrysler for months to come.
General Motors: Car Story
GM sold 1,261,610 vehicles in the first half, up more than 17 percent over year-earlier sales and about four percentage points better than the industrys overall unit gain for the period. For the first time in many years, GMs performance was driven by its renewed competence in cars rather than its recent reliance on pickup trucks and utility vehicles: The Chevrolet Malibu was the nations best-selling car in May, and the Chevrolet Cruze was the best-selling model in June.
Overall, domestically made GM cars sold 27 percent more units in the first half than a year earlier, which also reflected the success of the newly launched Buick Regal. In fact, Regal has been supercharging sales to such an extent that Buick finished better for each month of the first half in year-to-year sales comparisons. Regal and Regal Turbo accounted for about 30 percent of Buicks June sales. And while Cadillac sales edged down in June because of GMs planned constriction of deals with daily-rental fleets, for the six months, Cadillacs sales were up by 18 percent, led by a 42-percent boost for CTS and a 16-percent rise for SRX.
The company also was involved in another notable subplot in the first half: sales of its Chevrolet Camaro muscle car. Through June, GM had sold nearly 48,000 Camaros in 2011, compared with just over 46,000 Camaros in 2010, when the new model was introduced. Just as significant as its year-to-year gain was the fact that Camaro sales continued to outpace those of the Ford Mustang, its closest rival, which sold 39,000 units in the first half, a decline from about 40,000 units a year earlier. On the other end of the green scale, Chevrolet Volt continued to trickle out of GMs plant in Hamtramck, Mich., on a planned slow ramp-up, with many of the 2,745 units sold during the first half going to fill out dealer stocks of demo vehicles. GM will go into heavy Volt promotion mode again later in the year as it ramps up production and the extended-range hybrids competition with the all-electric Nissan Leaf.
Johnsons insistence that GM has its pickup-truck inventory situation under control still left some outside analysts wary at the end of June that the company might be repeating its vulnerability of 2008, when ample stocks of Silverado and GMC Sierra ran into the summer gasoline-price spike, and the company had to lather on thousands of dollars in extra incentives per vehicle to move them. He said that GM does a higher proportion of truck sales to fleets than its main competitors, and they have very specific needs and, thus, require a more ample selection on hand to satisfy. GM also is trying to build its pickup pipeline ahead of a long shutdown of its truck-assembly capacity because of a changeover to new versions of its models next year.
GMs fleet sales for the first half comprised about 27 percent of total sales, lower than last year and lower than its primary competitors, Johnson said. Like competitors, it is gradually attempting to reduce its presence in the daily-rental part of the fleet business, and GM was successful in doing so during the first half. Meanwhile, commercial-fleet sales a more desirable part of the fleet business were up 31 percent in June compared with a year earlier, the 15th straight month of such increases.
Nissan: Making A Statement
The first half for Nissan North America Inc. certainly couldnt have been joyous, but it did manage to sidestep many of the most drastic supply-driven declines of its chief Japanese rivals. Sales for the first six months were up 14.7 percent to 504,973, a solid performance considering the extensive reach of the Japan disaster and the fact sales for the Infiniti luxury-vehicle unit were flat in the first six months and sales were down for four of Infinitis six nameplates. But Nissans truck sales boomed by 18 percent in the first half, led by a resounding revival of the Quest minivan, which sold 5,192 units to 167 in the first half of 2010. The strong-selling Rogue compact crossover also was up a significant 36.7 percent.
The body-on-frame Frontier pickup and Pathfinder SUV also were up by double digits, a curious performance for a period dominated by high gasoline prices but perhaps signaling there is a definitive market remaining for such vehicles. The fullsize Titan pickup slumped, however, down 20.2 percent to just 8,878 sales for the first six months. The high-volume Altima improved sales by 17.6 percent to 131,842 units and the Sentra compact car posted a healthy 42.4-percent gain, perhaps boosted by low inventories for competitor models from Japan. Sales for the Versa subcompact slid by 15.9-percent, however, and the Cube funk-car was off by 26 percent in the first half to just 11,492 sales. Infinitis only models on the positive side of the ledger in the first half were the G sedan, up 4.9 percent and the QX56 SUV with a 27-percent gain.
Ford: Small Cars in Demand
For Ford, the bar already was high for showing first-half improvement. The company had emerged from 2010 as the clearest winner of the Big Six automakers in the U.S. market in terms of market-share gains, new products and brand momentum. Yet Ford managed to tack on more success during the first six months of 2011, with its overall sales rising by 12 percent, to 1,069,736 units, compared with a year earlier. Fords gains were about equally divided between cars and trucks.
The company stood to pick up even more ground on its foreign and domestic competitors after the March 11 disaster in Japan. But Ford was itself constrained in how many Fiesta, Focus and Fusion units it could produce to take advantage, particularly because the new Focus was in launch mode for much of the first half. As it was, Fords year-old Fiesta racked up more than 42,000 sales during the period, making it the brands third-best seller from nothing in less than a year. Fusion continued to anchor Ford in the compact segment, with sales increasing by 18 percent, to 132,000 units for the six months, and the new Focus managed a 9-percent increase, to 98,000 units, despite some availability constraints. Ford sold nearly 13 percent more cars overall, including Lincoln models, during the first half than a year earlier.
Lincoln remained a big disappointment for Ford during the period. After jettisoning the mid-position Mercury brand last year, Ford was expected to turn immediately to buttressing Lincoln. But it has taken longer to do so than anticipated, with Ford seeming to rely overly on the fact that it fielded nearly an entirely overhauled fleet for Lincoln a few years ago. Consequently, Lincoln brand sales dipped by 4 percent during the first half, to fewer than 44,000 units, as only the MKZ fortunately, the brands leading-volume model posted anything close to a double-digit percentage increase in sales, up 24 percent during the first half, to sales of 14,000 units.
The new Ford Explorer made a bigger splash during the first half than even Ford executives expected, and its performance also stood out. With 2mpg better fuel economy than the staple Explorer it replaced, and improvements throughout plus an effective social-media marketing campaign to fuel its launch Explorer managed to roll up nearly 66,000 sales in the period, already surpassing the nameplates full-year total of nearly 61,000 units in 2010. tear year emalk.iod, In the first six months of 2011, Explorer sales totaled, 65,823, surpassing last years full-year sales total of 60,687. Explorer was a first-half surprise for us, said Ken Czubay, Fords U.S. vice president of sales. We didnt expect such a strong response to this product. [And] customers are buying well-equipped Explorer models.
The other biggest first-half surprise for Ford was how quickly truck buyers embraced the new availability of six-cylinder engines in the F-150 lineup after a few years absence. By March, more than half of F-150 buyers were opting for one of the two six-cylinder engine offerings, mostly the EcoBoost version, presumably because Ford marketing and dealers had been able to assure them that they wouldnt be sacrificing too much power and performance compared to an eight-cylinder offering. In large part as a result, Ford sold more than 264,000 F Series units in the first half, a 10-percent increase over a year earlier even though gasoline prices averaged significantly higher.
Fords fleet business in the first half was right on plan, Czubay said. Sales to daily-rental customers grew by only 3 percent, under Fords plan to de-emphasize that part of the fleet market. But sales to commercial-fleet customers grew by 22 percent. Overall, fleets accounted for about 34 percent of the companys sales, about like last year.
Honda: Bypassed By The Recovery
With a still-solid industry rebound underway, the supply-side effects of the Japan disaster weighed heavily on the three large Japan-based automakers to pull them down even against the industrys rising tide. With June sales closing out the first half of 2011, Honda was a scant 1.6 percent ahead of its 2010 first-half pace, at 607,442 total sales, compared to 593,909 for the first half last year. There is manifest evidence in Hondas first-half sales results to demonstrate how earthquake-depleted supplies entirely reversed the companys momentum. After the first quarter this year, Hondas total sales were up 18.5 percent; for the first half, the number plummeted to 1.6 percent. At the end of the first quarter, Civic sales were up 19.5-percent compared with the first quarter of 2010, yet despite the launch of the new-generation 2012 Civic in April, by the end of the first half, Civic sales had fallen 5.1 percent behind last years pace.
In the first half, the Fit and the low-volume Insight hybrid were the only two Honda passenger-car nameplates to be ahead of 2010s sales pace, although every truck model except the Ridgeline retained a first-half sales improvement compared with the same period in 2010. But even gains on the truck side of Hondas business were drastically chopped post-Japan disaster: CR-Vs 55.9-percent first-quarter sales gain was reduced to 26.8 percent by the end of the second half; the Odysseys 13.1-percent first-quarter lead over like-2010 was hammered to just 0.1 percent at the end of the second half. At Acura, the luxury-car divisions first-quarter sales outpaced the same period in 2010 by 11.4 percent, but at the end of the first half, overall Acura sales had receded 1.4 percent compared with the first half of 2010. The RDX compact crossover and MDX crossover were the only two of Acuras six-model lineup that had increased first-half sales compared with 2010.
Toyota: Getting Back to Ground Level
As it ended 2010, Toyota was battling at least two big bogeymen in the U.S. market: the continuing sting of its safety recalls and subsequent sour publicity, and the fact that its lineup at American dealers was getting a bit tired. But 2011 offered reasons for new optimism besides the turn of the calendar: Toyota finally was close to putting the whole safety-recall mess behind it, and some new models including a freshened Camry would be on their way later in 2011.
But of course, larger forces then intruded on Toyotas plans, and the March 11 turn of events sucker-punched Toyota with a blow that still has the company reeling. As the companys supply network and assembly plants in Japan and in North America attempted to recover from the disaster, production and inventories of its most staple models for the U.S. market dwindled, including the iconic Prius hybrid. Lexus models, mostly built in Japan, suffered especially, with sales dropping by 42 percent during the six months right after Lexus had battled with BMW to the end of 2010 for U.S. luxury-segment volume leadership.
Toyotas overall U.S. sales for the six months dipped by 4 percent, including a 15-percent drop in Toyota cars built in North America. Model by model, Toyota couldnt meet the demands of American consumers at a time of rising gasoline prices, when a new small, fuel-efficient Toyota was the first choice of many as a way to cope with the new pocketbook pressures. Sales of Camry, the best-selling car in America for many years running, plunged by nearly 28 percent during the period because of limited availability. Corolla sales tanked by 17 percent. Extremely limited in availability by the disaster, Prius sales fell by 62 percent even as the company was gearing up the introduction of a larger new model to expand the lineup, Prius V, during the period. Sales of most of Toyotas trucks and utility vehicles also suffered likewise.
Only in the last few weeks of the half did things finally begin looking up for Toyota. Company executives moved up their timetable for resumption of full production of many models, which began in June, with the remainder expected to resume full output now by October 1. As it ended June, Toyota launched a full-fledged incentive campaign for the Independence Day weekend, and Bob Carter, Toyota division general manager, declared that the company was back in the sales business. June marked a significant turning point for Toyota, said Don Esmond, senior vice president of automotive operations. For the first time since the earthquake and tsunami disrupted worldwide automotive production and reduced vehicle inventories, total [Toyota Motor Sales] sales increased compared with the previous month.
BMW And Mini: Bolting For First Place
Sales for the BMW Group were up 18% in the first half to 143,521 units, compared to 121,585 in the same period in 2010, as the brand clearly has the opportunity to topple Toyota Motor Sales USA Inc.s Lexus from its longstanding position as the top U.S. luxury brand. With all that's gone on in the world in the last month, our own economy and auto market are still volatile places, so you'd better have the right models and business strategy to attract customers in this environment," said Jim O'Donnell, BMW of North America Inc. CEO. We've been fortunate to have both and that's why we're in the market leading position for the first half of 2011 and more new models are on the way giving us the opportunity to stay there.
Sales for the BMW brand increased 13% in the first half on sales of 113,705, compared with 100,632 sold in the first six months of 2010. Much of the growth was fueled by the 270-percent burst for new-generation X3 crossover, which moved 12,725 units compared with 3,439 in first-half 2010. The new 5-Series, now on sale in the U.S. for more than a year, enjoyed a Lexus-busting 59.6-percent increase to 25,287 units. But the low-volume 1-Series was off 20.9 percent for the period and sales for the best-selling 3-Series, perhaps a casualty of the new X3 and 5-Series appeal, slid by 7.1 percent in the first half. Sales at BMWs Mini small-car unit jumped 42.3% on volume of 29,816 compared to 20,953 in the first six months of 2010. The first half also was a record for Mini, thanks to the addition of the all-new Countryman model (8,146 first-half sales) and a 20.5-percent gain for the standard Cooper and Cooper S lineup, against six-month drops for the Cooper Convertible and Clubman.
Mercedes-Benz: Keeping BMW In Sight
For the first half, Mercedes-Benz USA posted 118,021 sales, a 10.4% increase and enough to stay ahead of arch-rival BMW when factoring out Mini sales from BMWs total but Mercedes now counts sales of its Sprinter light-commercial van (7,095 first-half sales) in its overall totals. Without Sprinter, Mercedes-Benz passenger-vehicle sales were 110,926, a 6.5-percent increase compared with the first half of last year. Mercedes first-half gains on the passenger-car side were fueled by a 15-percent improvement for the E-Class midsize sedan, to 31,960 sales. The low-volume CL- and SL-Class and SLS AMG all had gains as well. The brands crossover models all enjoyed double-digit gains in the first half, with the exception of the 1.3-percent improvement for the GLK compact crossover. The company also said sales of diesel-powered vehicles were up 188.3 % for the year, at 5,953 units versus 2,727 in the first half of 2010.
Mitsubishi: A Big Move
Mitsubishi Motors North America knows how to do the numbers. Its volumes may still be small, but for the first six months of 2011, Mitsubishi effectively was the fastest-growing automaker in the U.S. if one discounts Swedish Automobile NVs luxury-car unit Saab Automobile AB. President & CEO Yoichi Yokozawa said, We feel that we are just at the beginning of an extended period of growth in the U.S. market. First-half sales for Mitsubishi, underway with an unprecedented strategic shift in its product strategy, improved by 65.6 percent and the company has enjoyed ten consecutive months of year-over-year sales increases. Sales of Mitsubishi cars were up 43 percent in the first half and crossover sales leaped by 119 percent. The company said sales of vehicles assembled at its U.S. assembly plant in Normal, IL were up 116 percent for the first six months of 2011.
Subaru: Missing Another Record By A Hair
Subaru was on track to set its third annual sales record in a row when the Japan was struck by the earthquake and tsunami, disrupting production of about half of its model line sold in the U.S. Nonetheless, Subaru executives believe 2011 will be the second-best year ever for the Japanese automaker, behind 2010. Subaru sales for the first half of 2011 totaled 132,049 vehicles, up 4.8 percent from the first six months of 2010, but sales in the last two months were down from year-ago levels due to lack of inventory of Japan-built models. For the first half, sales of the top-selling Outback, built in Indiana, totaled 51,239 vehicles, a 24.5-percent increase over the 2010 first half; sales of the Legacy were up 12.1 percent to 21,284 vehicles. Sales of the Forester remained 13.5 percent higher for the year at 37,142, making its Subarus second bestseller, but sales have been off the last couple of months. Also built in Japan, the Impreza saw first-half sales slip 2.2 percent to 21,110 units. Tribeca sales were off 2.8 percent to 1,274 units.
Volkswagen: Setting the Stage
Volkswagen of America has lots coming down the pike in the second half, including a new Beetle, and the new Passat that was designed for U.S. tastes and is being built at the companys new plant in Chattanooga, Tenn. VW executives expect those two models to comprise two of their three biggest sellers in the American market over the next few years, as the brand attempts to make a meaningful dent in the United States for the first time in decades. But the company had neither of them to sell during the first six months of the year. And that is part of what makes Volkswagens 22-percent first-half year-over-year sales increase pretty remarkable.
About three-quarters of VWs sales during the first six months were Jetta, the last new model it introduced in the U.S., last year. Jetta sales for the period rose about 66 percent over a year ago. With consumers searching for scarce small cars during the first half, Volkswagen also enjoyed a 29-percent pickup in sales of its Golf subcompact, to nearly 9,000 units. Similarly, sales of the sibling GTI model were up 12 percent for the first two quarters, also to nearly 9,000 units. But even though Eos sold 18 percent more units in June, its best single month since May 2009, sales of the VW hard-top convertible were flat for the entire six months, at about 3,750 units. Toureg and Tiguan SUVs posted strong double-digit sales increases.
The first half of the year marked a period of unprecedented growth as more customers discovered the value, fuel economy, design and driving experience of the Volkswagen brand, said Jonathan Browning, president and CEO of Volkswagen of America. As we head into the second half of the year, we expect this trend to continue, particularly in the fall when we add the all-new Passat and Beetle to our dealer showrooms.
Audi, VWs luxury brand, continued its recent surge in the U.S. market during a first half that didnt treat the luxury segment very well overall. Audi sales rose 15 percent during the period, including a 5-percent boost for its staple A4 sedan, an 11-percent increase for the smaller A3 (including 46-percent diesel sales of A3 during June), and by strong double digits for its Q5 and Q7 utility vehicles. Audi also launched its widely anticipated A7 sedan during the period.
Mazda: Hanging Tough During Crisis
First-half sales for Mazda North American Operations (MNAO) were up 5.8 percent at 122,379 vehicles sold, as the brands increasingly popular CX-7 and CX-9 crossover models posted the brands best increases 21 percent and 16.4 percent, respectively, save the 26.7-percent first-half jump for the Mazda5 wagon. Troublingly, though, sales for the best-selling Mazda3 were off 8.5 percent, the midsize Mazda6 dropped by 15 percent to a meager 15,572 six-month sales total and the MX-5 Miata sportscar now averages about 500 sales per month.
Volvo: Finally Aboard The Recovery
Volvo, having been sold last year by Ford to Chinas Geely, is finally aboard the U.S. car sales recovery. In the first half of 2011, Volvo sold 36,304 vehicles, up 28.7 percent from the first half of 2010. Its strength is being derived almost entirely from its new S60, which made up about a third of its sales; Volvo has sold 11,048 of them so far this year. Volvos next bestseller has been the XC60 with 7,474 sold for a 40.1 percent increase, followed by the XC90 with 5,082 sold for a 10.4 percent increase. The C70 eked out a 2.7 percent increase in sales to 2,964 sold. The rest of Volvos relatively expansive line for its size saw declines, some of them double-digit drops.