FOR IMMEDIATE RELEASE
Edmunds.com Looks Back at 2008 and Forecasts 2009 Automotive Trends
SANTA MONICA, Calif. — December 23, 2008 — For the automotive industry, 2008 will be a year to forget. Due to the collapse of the financial industry, car sales plummeted to levels not seen since the early 1990s, when the country's population was 50 million people fewer.
Edmunds.com, the premier resource for automotive information, also noted the following trends during 2008*:
Used Cars Fared Better Than New Cars — Used car sales were down only 8 percent compared to 2007, and Certified Pre-Owned (CPO) sales were flat. During the same period, new car sales fell by more than 16 percent.
"During the downturn in the economy, many car-shoppers hunted for bargains in the used car lot," observed Edmunds.com Analyst Joe Spina.
Consumer Preferences Shifted with Gas Prices — "Over the course of the year, gas prices climbed from an average of less than $3.00 per gallon to well over $4.00 before falling back to under $2.00 per gallon," remembered Edmunds.com Senior Analyst Dr. David Tompkins. "Car-buyers responded to these price swings by gravitating toward fuel-efficient vehicles when prices were high, and reconsidering bigger vehicles when gas prices fell again."
- Hybrid vehicle market share was 2.1 percent at the beginning of the year, peaked at 3.2 percent in April and fell to 2.2 percent in November.
- Compact car market share was 15.3 percent at the beginning of the year, reached 21.3 percent in June and declined to 16.1 percent in November.
- Large pick-up truck market share was 12.3 percent at the beginning of the year, dipped to 9.3 percent in May and climbed back to 13.8 percent in November.
- Midsize SUV market share was 15.3 percent at the beginning of the year, dropped to 11.8 percent in May and rose to 13.7 percent in November.
Automakers Eliminated Models and Sold Brands to Reduce Expenses and Raise Capital — "The U.S. market has always been a competitive place, and now the economic crisis has made it uninhabitable for certain brands," said Edmunds.com Analyst Jessica Caldwell.
- Chrysler discontinued Aspen, Aspen Hybrid and Crossfire.
- Dodge stopped production of the Durango and Durango Hybrid.
- Ford sold Jaguar and Land Rover and divested a portion of its Mazda ownership, while General Motors sold its interest in Subaru, put Hummer up for sale and put Saab and Saturn up for review.
- Isuzu will discontinue selling vehicles in the U.S. beginning Jan. 31, 2009.
- Jeep has scheduled Commander production to end in mid-2009.
Increased Incentives Spending did not Boost Sales — "Some automakers hit new highs in terms of incentives spending this year, but it seems that they reached the point of diminishing returns," stated Edmunds.com Senior Analyst Jesse Toprak.
- In 2008, domestic automakers spent $3,545 per vehicle sold, up 10.3 percent from $3,212 in 2007. During the same period, market share fell by 3.6 percent.
- In 2008, Japanese automakers spent $1,397 per vehicle sold, up 16.4 percent from $1,200 in 2007. During the same period, market share rose by 2.9 percent.
- In 2008, Korean automakers spent $2,052 per vehicle sold, up 10.3 percent from $1,861 in 2007. During the same period, market share rose by 0.5 percent.
- In 2008, European automakers spent $2,794 per vehicle sold, flat compared to $2,802 in 2007. During the same period, market share rose by 0.5 percent.
|True Cost of Incentives SM **|
2009 Automotive Trends Forecasted by Edmunds.com*
Edmunds.com expects new light vehicle sales to decrease by almost five percent in 2009. (In 2008, approximately 13.1 million new vehicles were sold, while almost 16.2 million new vehicles were sold in 2007.)
Edmunds.com also expects that:
- It will be a car-buyer's market for essentially every model because of relatively slow sales all year.
- Cash-strapped automakers will be more selective in their use of incentives.
- Factories will have extended shutdowns as automakers seek to match supply with expected minimal demand.
- Transaction prices of certain models might increase as automakers make significant cuts to production, causing decreases in supply.
- Domestic automakers will sell or eliminate brands in an effort to reduce operating expenses.
- Government involvement as a result of the bailout will spur faster development of alternative fuel vehicles.
- Hundreds of dealerships will go out of business.
- More car-buyers will custom-order their vehicles rather than buying dealership inventory.
- Subcompact and compact cars will continue to be popular as consumers expect gas prices to fluctuate.
- The truck market will stay flat despite impressive new model introductions.
"Concessions made by the unions as part of the federal bailout will make it a bit easier for automakers to reap the benefits of factory shutdowns," commented Michelle Krebs, Editor of Edmunds' AutoObserver.com. "Automakers will no longer have to pay workers who are not working, and that quickly adds up to real savings."
* All data reflects activity between January 1 and November 30 of the indicated year.** Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all of the manufacturers' various United States incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.
About Edmunds.com, Inc.
Edmunds.com, Inc. publishes three Web sites that empower, engage and educate automotive consumers and enthusiasts. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value® , is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in January 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in February 2006 and is an automotive social networking Web site and home to the oldest and most established automotive community. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.