Edmunds.com Predicts A Horrific Sales Month
If there's a silver lining, it's Toyota's. The group predicts that Toyota will top 19% market share for the first time ever.
Adjusted for extra sales days this month, the firm sees Chrysler sales dropping around 40%, Ford's dropping a little over 37%, and GM's 43%. The firm predicts that Honda, Nissan and Toyota will be off 20%, 32% and 19%, respectively.
Jesse Toprak, executive director of industry analysis for Edmunds.com, says the big sales weekend--Columbus Day--wasn't. "Looking ahead, November is traditionally one of the worst sales months of the year, and December is usually one of the best. If the election and other variables don't have a significant impact on auto sales through December, we are looking at an annual total of about 13.6 million units."
The company predicts that while the major players in the U.S. market will all have sales shrinkage in October, only the domestics will pay a price in market share. If sales predictions hold true, the combined monthly U.S. market share for Chrysler, Ford and General Motors in the U.S. will be 45.5% versus 52.5% last year and 52.9% in September.
Edmunds predicts that Chrysler will end the month with a 10.3% share of the U.S. market--down from 11.8% last year--and that Ford will have 14.2% of new car sales in the U.S. for the month, down from 15.5% in October 2007 but up from 12.3% last month. GM's market share will take a big plunge this month if Edmunds is correct: 21% for the month versus a four-year high of 29.4% last month.
The steep drop in share and sales reflects discontinuation of its September incentive program offering employee pricing to everyone. "[The other automakers] didn't quite jump on the bandwagon in terms of incentive, and GM took advantage of that and got record market share. But now GM has discontinued that and Toyota is more aggressive this month with their zero-percent program, allowing them to grab record share."
But the firm predicts that Honda, which has gotten traction for its subcompact Fit and Civic cars in the gas-strapped U.S. market, will see market share grow to 10.9%--up from 9.4% last year and 10.9% last month.
Nissan will hold down the fort with 6.9% share, even with last year and up from 6.2% last month. Toyota will also gain share, garnering 19.1%--up from 16.1% last year and 15% in September.
Toprak says the overall drop is driven by low consumer confidence. "Consumers are postponing purchases until the economy shows more stability," he says.
"On a relative basis, it seems like when times are tough consumers see cheaper Japanese cars as safe choices. But it only works to a certain extent. If you look at sales of Honda and Toyota vehicles, they have suffered, too, but they are doing better because of consumer perception and product mix," he says.