But how fast and how far?
What goes up must come down. If you’re not growing you’re dying. The status quo is never static. To many, these oft-quoted business mantras may seem like just so much rhetoric. But not in the automotive world.
Here, the pendulum is constantly swinging back and forth between success and failure, albeit at different rates and to different extremes for different brands and dealerships.
There were several big pendulum swings as 2011 morphed into 2012, not the least of which was a major upturn in new vehicle sales in Canada. From a low SAAR (Seasonally Adjusted Annual Rate) of 1.54 million in December — the lowest level since May 2011 — to 1.7 million in January, which was the highest level since January 2008.
Measured differently, January’s sales were up a phenomenal 25.4 per cent from the same month in 2011, and 11.6 per cent ahead of the January average for the past five years, second only to 2008’s.
It’s too soon to break out the bubbly just yet, however. One month does not a record year make. It might be tempting to interpret that one-month swing as an indicator that the tide has turned, to mix in another metaphor, but doing so might also be delusional.
There are many possible reasons for the huge month-to-month change in fortune, including fleet sales delayed until the new fiscal year, pent-up consumer demand, refreshment of the supply chain following the Japanese disasters of 2011, introduction of new product, or all of the above. (Most likely all of the above.)
But taking a longer-term look, the pendulum really is swinging back toward the positive end of the sales arc. Slowly…very slowly.
With short-term exceptions, sales have been tending upward since bottoming out in January 2009. And the consensus seems to be that 2012 will continue that slow-growth trend, up a little from 2011 but
not dramatically.
Chrysler, Kia and Audi have momentum
Within the overall market swing, some automakers are carrying a lot more momentum than others. High among those is Chrysler, whose January sales were up 22 per cent from January 2011 and 18 per cent from the company’s five-year average for the month, making it the best January since 2002 and beating out Ford for the top sales spot, with 16.9 per cent market share.
Not a bad way to start the year. But it was no fluke accomplishment. January was the 26th consecutive month of year-over-year sales increases for Chrysler and it gave General Motors a serious run for second place throughout 2011, finishing the year not all that far back in third (just four per cent behind in total sales).
But Chrysler is not alone in terms of momentum. Kia’s sales were up 24 per cent in January, marking the South Korean brand’s 37th consecutive month of sales increases, during which it has gained 1.6 per cent of market share (to 2.9 per cent). With no sign of slowing down.
Audi, too, is on a tear. The German brand was second only to Kia in terms of percentage sales gain in calendar-year 2011, and continued that run through January with a 32 per cent increase for the month.
After a difficult 2011, the Japanese automakers appear set to make up for lost sales in 2012. With their supply lines reinstated, Honda (+143.8 per cent) and Toyota (+18.3 per cent) regained their old form in January — 38.6 per cent and 8.8 per cent ahead of their five-year averages, respectively.
GM taking the brunt
But where there are winners there have to be losers. And GM is taking the brunt of the losses right now.
It’s more than three months since GM posted a significant monthly increase, year-over-year, and sales were down 11 per cent in January, from 2011, in a market that was up over 25 per cent. GM’s January market share was down to 13.3 per cent — perhaps its lowest ever.
There was another big swing in January, with passenger car sales up 28.4 per cent to trucks’ 7.4 per cent increase. For the past year, truck sales growth has substantially outpaced that of cars.
The apparent turnaround may simply reflect the sudden resurgence of Honda, with its Civic back in full production, and similar returns to normal car production by other manufacturers. Or, it could suggest a budding change in the market place.
Time will tell. By the time you read this you’ll have the benefit of February’s sales numbers, which may answer some of the questions January left hanging. But it’s a long ways yet to the end of 2012.
