March small car sales up — SUV, truck sales down
Is $3.25 to $3.50 a gallon the long-awaited for inflexion point for driving a shift in U.S. car-buying habits? Obviously we can’t know for sure, but the Detroit News reported that “cars outsold light trucks” in March. [One auto industry insider told me yesterday that this was only the second time that has ever happened in some two decades.]
Yes, the recession no doubt had an impact on the sales of big, expensive vehicles. But since gasoline prices are going to mostly be going up over the next decade or two, possibly to well above $4 or even $5 a gallon (see “Peak Oil? Bring it on!”), this should be (yet one more) wake-up call to Detroit.
What exactly happened in March? According to a cars.com blog:
In March, small cars like the Ford Focus — up 24% — and Honda Fit — up 73.8% — were bright spots almost universally among automakers. Hybrid sales were also up. On the other end of the spectrum, trucks like the Ford F-Series — down 23.8% — and Dodge Ram — down 31% — saw huge losses, as did truck-based SUVs.
Here are their numbers for March 2008 sales performance for a spectrum of cars, trucks, SUVs and hybrids:
Cars
Chevy Cobalt: Down 23.8%
Dodge Caliber: Up 10%
Ford Focus: Up 24%
Honda Civic: Up 18.3%
Honda Fit: Up 73.8%
Hyundai Elantra: Up 11.1%
Kia Spectra: Up 41.3%
Mitsubishi Lancer: Up 32.7%
Nissan Sentra: Up 21.4%
Nissan Versa: Up 34.2%
Toyota Corolla: Down 21.3% (mainly due to the changeover to the 2009 model)
Toyota Yaris: Up 83.2%
VW Jetta: Up 19.7%
Hybrids
Honda Civic Hybrid: Up 44.3%
Toyota Prius: Up 16%
Trucks and SUVs
BMW X5: Down 41.9%
Chevy Silverado: Down 23.5%
Chevy Tahoe: Down 34.2%
Dodge Durango: Down 38%
Ford Explorer: Down 14.8%
Ford F-Series: Down 23.8%
Honda Pilot: Down 23.6%
Hummer H3: Down 32.6%
Lexus LX 570: Up 156.1%
Nissan Titan: Down 44.9%
Toyota Sequoia: Up 19.8%
Toyota Tundra: Up 16.8%
[Note: “Some companies adjust percentages due to selling days. 2008 had two less selling days than 2007, so the percentages may appear higher.”]
April 25th, 2008 at 12:26 pm
Joe,
There are about 230 million registered vehicles in the US. (maybe 200 million of which are passenger cars) My guess is 10% have fuel efficiency above 23 mpg.
If the driving public find that economic stimulus check a good downpayment on a truly fuel efficient car there will not be supply available but the driver might be inclined to wait.
Bottom line, the driver will eventually trade in that inefficient car and as more drivers trade in cars, the price of used cars will go down as lots fill to capacity. There are customers looking for their first or second car in that low price catagory.
How will we keep inefficent cars from being recycled back into the fleet?
And, is there a plan for recycling that car back into the materials stream given that so much of a car is now plastic?
These are not insignificant questions but I am certain there are no programatic approaches being considered.
John McCormick
April 25th, 2008 at 12:34 pm
John, in case it helps, there are two graphs at the bottom of
http://climateprogress.org/ 2008/ 03/ 13/ killing-the-electric-car-again-part-1/
that show how changes in vehicle sales eventually change the vehicle fleet. It is a slow process. The graphs are from a spreadsheet I created for California (not the entire US), but the shapes of the curves are the same.
April 25th, 2008 at 2:37 pm
From the Washington Post
How to Guarantee Gas Guzzling
By Warren Brown
Sunday, April 20, 2008; G02
Sen. John McCain (Ariz.), the presumtive Republican presidential nominee, often says he knows little about economics. Last week, he proved it.
McCain called for a summer-long suspension of the 18.4 cents-a-gallon federal tax on gasoline and the 24.4-cent federal tax on diesel fuel.
He reasoned that such tax forgiveness would help relieve the financial burdens of Americans suffering from an economic downturn largely caused by combined industry and consumer greed — for example, construction and real estate companies building and selling grossly overpriced homes; finance companies, hungry for profits, lending billions to consumers with little or no regard for financial controls; and consumers applying for and accepting mortgages they could not afford.
That house of cards, built with little governmental oversight, has come crashing down with inevitable casualties. And politicians such as McCain are now scurrying about for solutions before November’s national elections.
But the fuel-tax relief, McCain’s effort, joined by a few vote-hustling Democrats, is pitifully off the mark. More than that, it shows why we are a nation without an energy policy that makes any sense.
Barely a year ago, Republicans and Democrats in Congress were beating up the car companies, demanding more fuel-efficient cars and trucks. Never mind that they had done the same thing in 1975 to bring forth the ill-conceived, poorly implemented Corporate Average Fuel Economy (CAFE) rule requiring maximum feasible fuel-efficiency targets for fleets of new vehicles sold in the United States.
The legislation Congress approved last year had the same flaw as the one it pushed through in 1975: The measure required car companies to do everything and asked consumers to do nothing. It ignored a basic rule of economics, which is that decreasing the cost of a highly valued commodity increases consumption of that commodity.
The 1975 rule gave us substantial increases in technical fuel efficiency. Today’s V-8 engines burn much less gas than V-8s produced in the 1970s. Today’s in-line four-cylinder engines consume less fuel than their counterparts a generation ago.
But all of those gains in fuel efficiency were wiped out by the same phenomenon that brought us to our current economic crisis: consumer and industry greed.
More fuel-efficient vehicles plus the cheapest gasoline in the developed world meant cheaper driving. Cheaper driving led to more consumer demand for bigger, more powerful vehicles. What company could resist that temptation? Consumers wanted bigger and more powerful vehicles and were willing to pay big bucks for them. Every major automobile manufacturer, including Honda with its Acura MDX SUV and Ridgeline pickup, went for the gold.
Cheaper driving also meant more vehicle miles driven and more gasoline and diesel fuel consumed. The United States produces 5 percent of the world’s oil. It consumes 25 percent — much of it from countries that are politically less than democratic or republican.
Our wanton consumption of oil has only recently begun to be checked by price increases at the pump. In terms of fuel economy, that pump pain has brought measurable gain in the exercise of consumer common sense in the automotive marketplace.
Sales of small, fuel-efficient cars — for example, the Honda Fit, Hyundai Accent, Ford Focus, Chevrolet Aveo and Nissan Versa — rose 3.6 percent in the first quarter of 2008, according to data compiled by Automotive News, the Detroit industry trade journal. Small cars constitute 17.8 percent of all new vehicles sold in the United States, up 2.1 percentage points from the comparable quarter a year earlier.
A decade ago, when fuel-consumptive light trucks made up 50 percent of all new vehicles sold in the United States, small cars barely constituted 5 percent of new-vehicle sales in this country.
The difference is the price at the pump. Consumers are rational economists. If a highly desired good is offered to them at a low price, they will buy more of it — often substantially more than they need, just in case. If the price is high, consumers will consume less.
Isn’t lower fuel consumption and less reliance on foreign oil what Congress said it wanted when it passed its fuel economy legislation last year? Can McCain get us there with lower federal fuel taxes?
April 25th, 2008 at 3:31 pm
Because this many come up, there was a very interesting article in American Scientist which showed that safety was an engineering issue.
April 25th, 2008 at 7:08 pm
Eli: yes, and this is at least in part due to the widespread increase in the 1990s in the use of
- “crash codes” in computers to simulate large numbers of different sorts of crashes,
- and good 3D visualization tools to look at the results
In some cases, *less* metal was actually safer, because it directed crumpling in a safer direction.
There was a classic Ford Taurus crash simulation that we got and used as a demo at SGI. The visual simulation lighted high stress with bright colors. For a fairly small range of left-front collision angles:
- the dummy would pitch forward
- the airbag would stop it
- it would bounce back
- and then there would be a flash of bright yellow on the dummy’s skull, as the top of the doorframe buckled inward at just the right time to break the skull. I think the solution was actually weakening the metal a little, but I heard that kind of story several times from others.
Some aspects of auto design are very different now than it was in the 1980s, in part because auto engineers have the tools to be able to use less material and still be safe, and to test many designs cheaper.
I was especially amused to see a program about moose, and be told that Saab designers simulated moose collisions, and the the shape of my car (a 9-5) was in part determined by the need to shed moose as safely as possible.
April 26th, 2008 at 12:47 am
Sorry, but it’s too early to tell if there’s a real change.
You know how you hate it when people pick (say) one month which is colder than (say) the same month in the last year, and say, “hah! See? No global warming! The trend is broken! New trend!” Well… same goes for the marketplace.
Also, there’s some dodginess in sales figures - my spouse works for a car company, so I know. For example, each company has its own fleet of cars. Officially, it buys those cars from itself at cost. What happens is that each national division keeps those “sales” off the books until they have a bad quarter, then they put them in to boost it up. And sometimes if they have a genuinely really phenomenal quarter they may hold some of the sales over to the next quarter, since they’ll inevitably not be phenomenal two quarters in a row, but the CEOs will expect them to be.
In science terms, there are big error bars on those figures. However, over some years we’ll be able to see if there’s a trend one way or the other, at the moment the apparent change is over too short a period, and well within those error bars.
April 26th, 2008 at 1:22 am
Why no mention of American made hybrids? The Malibu hybrid is a very good seller.
April 26th, 2008 at 7:20 am
Great news on the auto sales front. A further point on McCain’s gas tax repeal. Would this not hurt construction since the tax goes to highway repair projects? Hence, this would hurt one of the industries that hew would like to help.
April 26th, 2008 at 4:05 pm
As for used cars (which in some sense may provide better metrics than new car sales, fo reasosn Kiashu mentions), the SJ Mercury News carried several AP stories today, one by Dee-Ann Durbin and Tom Krisher, and the other by Adrian Sainz.
Among other things, some dealers are refusing to take SUVs as tradeins.
For those unfamiliar with the concept of “stranded asset”, it’s worth learning.