Global Auto Sales Plunge




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ORIGINAL POST

Posted by Ed 5 mths ago
China's car sales plunged 11.6% in September, making for the biggest drop in almost seven years.

http://uk.businessinsider.com/chinas-auto-sales-see-biggest-drop-in-almost-7-years-2018-10/?r=AU&IR=T



Automobile production in Brazil plummeted by 23.5 percent in September, compared to the prior month, while sales slumped by 14.2 percent, the national automakers’ association said on Thursday.

https://uk.reuters.com/article/brazil-autos/brazil-auto-production-sales-plunge-in-september-idUKL2N1WK0QD

COMMENTS

Ed 5 mths ago
UK car sales plunge 20 per cent in September

https://www.independent.co.uk/news/business/news/uk-new-car-sales-plunge-september-smmt-emissions-standards-brexit-a8567991.html

Ed 5 mths ago
The downward spiral in the US auto industry is accelerating, and there may be no improvement anytime soon.

According to a new report by CNBC, October is shaping up to be another terrible month for the industry, after an already abysmal September, as auto dealers around the country have been plagued by marked drops in retail sales and customer traffic in their showrooms.

Scott Adams, the owner of a Toyota dealership in Lee’s Summit, Missouri, told CNBC: “We are definitely seeing business pull back. September was off some, but this month our car sales are down 12 percent and our truck sales are down 23 percent." The report notes that the drop in sales was most pronounced last weekend

https://www.zerohedge.com/news/2018-10-23/october-auto-sales-tumble-our-car-sales-are-down-12-percent

Ed 5 mths ago
“[China] The chief engine of growth for the world’s carmakers is turning into their biggest headache. In the past 48 hours, auto giants from Volkswagen AG and Ford Motor Co. to Renault SA and PSA Group have pinned flagging profits and weakening sales outlooks on a slowdown in the world’s largest auto market. The companies spent billions of dollars over the past two decades setting up production and sales channels in China, as rapid growth saw millions buy first — and second — cars, only to see demand fizzle as the economy wavers.”

https://www.bloombergquint.com/global-economics/growth-engine-for-the-world-s-carmakers-is-becoming-a-liability#gs.k_1Zt_w

Ed 5 mths ago
“UK car output fell by 16.8% in September according to the latest data issued by the Society of Motor Manufacturers and Traders. The trade association said some 25,610 fewer cars rolled off production lines than in the same month last year, capping off a turbulent first three quarters as global trade tensions… September production fell for both home and overseas markets, down year on year by a respective 19.0% and 16.2%.”

https://www.just-auto.com/news/uk-car-production-down-17-in-september_id185278.aspx

Ed 5 mths ago
“Double Whammy of Rising Rates for Us and Our Consumers”: AutoNation

We knew “free money would inevitably end. Affordability would become an issue – particularly around new vehicles.”

It has been a tad rough in the stock market for AutoNation, the largest auto retailer in the US, with 242 new-vehicle dealerships, selling 33 brands, including Toyota, Lexus, Honda, Acura, Ford, GM’s brands, Fiat-Chrysler, Mercedes-Benz, Nissan, Infiniti, BMW, Volkswagen, Audi, Porsche, etc. After the company reported earnings on Tuesday, shares [AN] dropped 4%, and this morning, they’re down another 3% (despite the overall market which has been up sharply on both days). Shares have now plunged 37% from their 52-week high in January.

The problem is in new-vehicles sales.

Many customers are strung out by high vehicle prices and rising interest rates, and they’re switching to used vehicles, which AutoNation also sells – and that part of the business is good. But the new-vehicle business was lousy in the third quarter, compared to the same period last year:

New-vehicle sales fell 5.6%, to $2.93 billion.

The number of new vehicles retailed fell 6% to 78,300 vehicles (overall industry sales fell 4%).
Due to rising prices from manufacturers and a consumer shift from cars to more expensive SUVs and trucks, average revenue per new vehicle retailed rose by nearly $1,000 to $37,017.
New-vehicle gross profit (revenue minus what manufacturers charge after incentives) plunged 13.4% to $125 million.

Per new vehicle retailed, gross profit dropped 7% to $1,571.

More https://wolfstreet.com/2018/10/31/autonation-hit-by-double-whammy-of-rising-rates-for-us-and-our-consumers/

Ed 4 mths ago
“The slump in China’s automotive sector dragged on through October, with year-over-year sales down for the fourth straight month.

“Auto sales last month were off 12% from a year earlier to 2.38 million, the government-backed China Association of Automobile Manufacturers said Friday.”

https://www.wsj.com/articles/china-auto-sales-on-track-for-a-down-year-1541750936?mod=searchresults&page=1&pos=2

Ed 4 mths ago
“BMW has reported that its profit dropped by 27 per cent in the third quarter of 2018. In a statement, the German premium car-maker blamed currency fluctuations, raw material costs, the high cost of electric- and autonomous-vehicle R&D and US president Donald Trump’s trade wars for the fall in profit…

““Along with the rest of the industry, we are increasingly confronted with adverse external factors, the negative impact of which cannot be fully offset,” BMW’s Chief Financial Officer, Nicolas Peter, said.”

https://www.motoring.com.au/bmw-profits-slump-115544/

Ed 4 mths ago
This is unnerving on the heels of China’s 11.7% yoy fall for October car sales.

They can’t blame *this* on the new emissions tests .

“New car registrations in Europe slumped 7.4 percent in October on falling demand in Germany, France, Italy and Spain and as registrations of Audi, Nissan and VW branded vehicles saw sharp declines, monthly auto industry data showed.”

https://uk.reuters.com/article/us-europe-vehicleregistrations/european-passenger-car-sales-slump-7-4-percent-in-october-idUKKCN1NK0LN

Ed 4 mths ago
Indian auto sales drop 10% in peak shopping season

About 2.05 million new cars were sold in India during the period, down 11% from the Diwali season of 2017, calculated from Sept. 21 to Nov. 1.

https://asia.nikkei.com/Business/Business-Trends/Indian-auto-sales-drop-10-in-peak-shopping-season

Ed 3 mths ago
China Auto Sales Plunge, Face First Annual Decline in 30 Years

New-vehicle sales in China plunged 13.9% in November, compared to a year ago, to 2.55 million units, the China Association of Automobile Manufacturers (CAAM) announced today. This was the fifth month in a row of year-over-year drops, and the steepest year-over-year drop since January 2012, which had been caused by the timing of the lunar new year. November brought sales for the first 11 months to 25.4 million new vehicles, a drop of 1.7% from a year ago.

December is historically the strongest month of the year, and the November plunge bodes ill for December. CAAM, which is backed by the Chinese government, has been ratcheting down its forecasts for year-total sales, to keep up with reality. On Tuesday, given the plunge in November, it lowered its sales forecast for 2018 to a drop of 3%.

To put this sales decline for the year 2018 into perspective: This is something that has simply not happened in modern China.

https://wolfstreet.com/2018/12/11/china-auto-sales-plunge-face-first-annual-decline-in-30-years/

Ed 3 mths ago
t's official: auto market data has confirmed that the "boom" created by a decade of low interest rates following the global financial crisis is finally over. According to new estimates from RBC Capital Markets, the global automobile industry is heading into recession, as manifested by its first production drop in nearly a decade.

RBC analyst Joe Spak estimates that worldwide light vehicle output will fall about 4% in the fourth quarter after falling 2.9% in the third quarter. This will be the first time this number has fallen for two consecutive quarters since 2009.

https://www.zerohedge.com/news/2018-12-19/global-auto-industry-enters-first-recession-2009


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Ed 3 mths ago
Vehicle manufacturing in the UK slumped by 19.6% in November compared to the same month of 2017

The industry has now racked up six consecutive months of falling production, according to the industry group, the Society of Motor Manufacturers and Traders (SMMT). Year-to-date, total car production in the UK is more than 8% lower than it was in the first 11 months of 2017.

If anything, the trend appears to be accelerating, with November’s 19.6% year-on-year drop in production roughly double the 10% drop registered in October. The chart (courtesy of SMMT) shows rolling-year car production totals — the total amount produced over the twelve-month period:

https://wolfstreet.com/2018/12/25/amid-brexit-mess-uk-car-production-reels-from-worst-november-since-financial-crisis/

Ed 2 mths ago
Carmageddon for GM, Ford & Toyota: 3rd Down-Year in a Row. Industry Sales Below 2015. Hyundai-Kia Drop 11% in 2 Years. BMW & Mercedes-Benz Fizzle

https://wolfstreet.com/2019/01/04/carmageddon-for-gm-ford-toyota-3rd-down-year-in-a-row-hyundai-kia-sales-drop-bmw-mercedes-benz-fizzle/

Ed 2 mths ago
Carmageddon in the UK: Auto Sales Plunge 12% in 2 Years, Diesels in Death Spiral. Consumers, Businesses, Fleets Cut Back

This is getting serious.
Sales of new passenger vehicles, as measured by registrations, dropped 5.5% in December from a year earlier in the UK, the second largest auto market in the EU, behind Germany. Sales in the full year of 2018 dropped 6.8%, “reflecting 12 months of turbulence,” and “the ongoing decline in consumer and business confidence,” according to the Society of Motor Manufacturers and Traders (SMMT).

But in 2017, sales had already dropped 5.7% from 2016; and over the two-year period, sales were down by 12%. This chart shows the year-over-year change in new vehicle registrations:

https://wolfstreet.com/wp-content/uploads/2019/01/UK-auto-sales-2018-12-change-YOY-.png

Sales fell for all three customer types: to consumers (-6.4%), to fleets (-7.3%), and to businesses (-6.4%). A lease counts as a registration because the leasing company buys the vehicle and leases it to the customer, at which point the vehicle is registered.


More https://wolfstreet.com/2019/01/07/uk-auto-sales-plunge-second-year-in-a-row-diesels-in-death-spiral-consumers-businesses-fleets-all-cut-back/

Ed 2 mths ago
China’s most globally high-profile and successful carmaker, Geely, is forecasting flat sales this year, a sharp slowdown from 2018 as the country’s giant auto market struggles with slowing economic growth and more cautious consumers.

Its sales started to slow in the last quarter of 2018, with a 44 percent drop in December alone, according to monthly sales data filings.


“We must lay the foundation for our survival, otherwise we may soon face a period of demise,” he said in the address posted on Geely’s social media last year.


https://www.reuters.com/article/us-china-auto-geely/chinas-geely-sees-sales-growth-evaporating-as-car-market-struggles-idUSKCN1P114X

Ed 2 mths ago
China Car Market Goes Bust, Boost, Boom. Repeat

Beijing’s planned stimulus policies risk prolonging the cycle of highs and lows in an industry where demand is maturing.

China is planning to give the world’s largest auto market a shot in the arm. Don’t be so sure it’ll work.

As the nation prepared to post its first annual decline in car sales in at least two decades, a senior official of the National Development and Reform Commission said late Tuesday the government would announce measures to encourage consumers to buy cars and other goods.

The statement finally confirmed months of speculation of imminent stimulus, sending shares of Chinese automaker stocks soaring Wednesday. China’s car market, which accounts for a third of global sales, has been heading down for six months. Passenger car sales dropped 6 percent in 2018, the China Passenger Car Association said later in the day. Retail sales of sedans, SUVs and other vehicles slumped 19 percent in December.



China's car market boom and bust has been fueled by government support:

https://www.bloomberg.com/opinion/articles/2019-01-09/china-s-car-market-needs-to-end-boom-bust-stimulus-cycle?srnd=premium-asia

Ed 2 mths ago
China Car Sales Collapse: First Annual Drop In Over 20 Years

After we previously reported that UK car registrations just fell at their sharpest rate since the financial crisis, the sharp plunge of auto sales in China has also continued: retail sales of passenger vehicles - which include sedans, MPVs, mini-vans and SUVs - in China fell a whopping 19% in 2018 to 2.26 million units.

In addition, SUV retail sales also fell 18.9% year over year to 965,772 units.

https://www.zerohedge.com/news/2019-01-09/china-car-sales-collapse-first-annual-drop-over-20-years

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Ed 2 mths ago
https://mk0mexiconewsdam2uje.kinstacdn.com/wp-content/uploads/2019/01/vehicle-sales.jpg


https://mexiconewsdaily.com/news/light-vehicle-sales-down-7-in-2018/

Ed 2 mths ago
China’s Consumers Rattle Global Automakers as Sales Plunge
by Wolf Richter • Jan 14, 2019 • 0 Comments
Welcome to the Big Club of Saturation & Decline.
For the month of December, light new-vehicle sales in China plunged 13%, compared to a year ago, to 2.23 million vehicles, the China Association of Automobile Manufacturers (CAAM) announced on Monday. Sales through June had risen 6%, but then came July, and now there have been six months in a row of year-over-year declines – with the last four months dousing any remaining enthusiasm about China’s consumers with double-digit declines:

July: -4.00%
August: -3.8%
September: -11.6%
October: -11.7%
November: -13.9%
December -13.0%

These declines pushed light new-vehicle sales down 4.1% for the year, to 23.7 million. This phenomenon of declining auto sales is new to China’s managed and pump-primed growth-no-matter-what economy. Data going back to 1990 show relentless annual sales increases. Between 2005 and peak-year 2017, new vehicle sales multiplied by a factor of six:

More https://wolfstreet.com/2019/01/14/china-auto-sales-plunge-4th-month-in-row-2018-first-down-year-since-1990-welcome-to-the-club-of-saturation-decline/


https://wolfstreet.com/wp-content/uploads/2019/01/China-auto-sales-2018.png

https://wolfstreet.com/wp-content/uploads/2019/01/China-auto-sales-2018-yoy.png



Apparently, stimulus works wonderfully... while it works.... easy credit... record low interest rates... extended amortization periods..... encourage people to buy new cars....

But... eventually ... the market saturates... consumers who already have an auto loan with years left to pay on it.... do not trade in their cars for new cars... because then they would have TWO loans to repay....

Ed 2 mths ago
For US automakers in China:

GM’s sales dropped 10% to 3.65 million vehicles, including a 25% plunge in Q4. But its premium brand Cadillac saw sales jump by 17%.

Ford’s sales plunged 37% to 752,000 vehicles, including a December collapse of 59%.

Ed 60 days ago
Sales in the EU of passenger vehicles dropped 8.4% in December compared to a year earlier. It was the fourth month in a row of sharp year-over-year declines that wiped out the growth of the first eight months of 2018:

Sep: -23.5%
Oct: -7.3%
Nov: -8.0%
Dec: -8.4%

2018 was marked by record low interest rates on consumer loans, thanks to the ECB’s interest rate repression that consisted of its negative-interest-rate policy and QE. These low interest rates might have boosted purchases over the past few years.

But toward the end of 2018, they no longer seemed to have any magic in them.

Also the pent-up demand from the euro-debt crisis – it had pushed sales down sharply from 2011 through 2013 – helped sales over the past few years, but that demand too seems to have been exhausted.

https://wolfstreet.com/2019/01/16/eu-auto-sales-down-hard-in-past-4-months-flat-for-2018/

Ed 48 days ago
The stock of America's iconic motorcycle maker, Harley Davidson, is in full-blown slaughter mode this morning, after the company reported dismal earnings, barely breaking even in the last quarter of a year in which HOG got caught up in President Donald Trump’s trade wars.

Harley-Davidson fell over 8% pre-market after the company reported 4Q EPS and revenue that not only missed the lowest Wall Street estimates, but were the biggest miss to consensus since 2009.

The company also reported 4Q motorcycle shipments of 43,489, down 7.9%, which fell well short of the company’s forecast given in Oct. for total shipments of 45,800-50,800. This even though the company said it finished the year with 52,000 more Harley- Davidson riders than one year ago.

Some more highlights courtesy of Bloomberg:

U.S. retail sales tumbled 10 percent in the three months ended in December, the eighth consecutive quarterly drop. Harley is struggling to attract younger riders and is looking to offset that by offering cheaper bikes and selling clothing and gear, including on Amazon, to reach new customers.


Sales in Europe and Asia also fell, and worldwide deliveries dropped 6.7 percent. CEO Matt Levatich unveiled a turnaround plan in July that calls for 50 percent of revenue to come from outside the U.S. by 2027. He’s introducing as many as five electric models, including lightweight, urban bikes to target growth in Europe and India.


Harley said in June it would move some U.S. production overseas to sidestep EU tariffs that jumped to 31 percent from 6 percent, sparking the ire of Trump, who said he’d back a boycott of the company’s bikes.


Analysts think demand for Harley’s new electric motorcycle, LiveWire, will be limited because of its $29,799 price tag. Its cheapest bike starts at $8,699.

It wasn't just HOG: shares of peer Polaris Industries also come under pressure today after providing a 2019 adj. EPS forecast of $6.00-$6.25, which trailed street estimate $6.95.


The maker of off-road vehicle and Indian motorcycles said the 2019 view includes the combined negative impact from external factors including the annualized impact of tariffs, adverse foreign exchange impact and higher interest rates of about $1.50 per share.

https://www.zerohedge.com/news/2019-01-29/hog-gets-slaughtered-after-harley-reports-biggest-miss-ten-years

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Ed 30 days ago
European Car Sales Fall For Fifth Month In A Row

In keeping with the global stagnation that has enveloped the auto industry, the latest EU/EFTA vehicle registration data paints an ominous picture to start 2019 in Europe, where passenger car registrations dropped 4.6% year over year and sales declined in all of largest markets in Germany, France, the U.K., Italy and Spain.


Here's how the data looked on a per manufacturer basis:

VW Group sales drop 6.4% y/y; ytd down 6.4%
PSA Group sales drop 2.3% y/y; ytd down 2.3%
Renault Group sales drop 0.9% y/y; ytd down 0.9%
Ford sales drop 6.6% y/y; ytd down 6.6%
FCA Group sales drop 14.9% y/y; ytd down 14.9%
BMW Group sales drop 3.1% y/y; ytd down 3.1%
Daimler sales drop 1.5% y/y; ytd down 1.5%
Toyota Group sales drop 6% y/y; ytd down 6%
Nissan sales drop 24.7% y/y; ytd down 24.7%



And here is a look at the trend of ugly YOY misses that began consistently in September of last year.

https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/EU%20reg.jpg


Bloomberg Intelligence analyst Michael Dean put it clearly in a note: "The EU auto-demand cycle has peaked."

Spain saw the largest decline in registrations, down 8%. Italy followed, down 7.5%. Both Audi and Porsche saw double digit percentage declines, as VW Group sales were down 6.4%.

Brexit continues to be a major point of volatility for many of these manufacturers. Renault and Ford have both warned that unless the U.K. leaves Europe with a deal, both companies could miss estimates and that the effects could be "catastrophic".


https://www.zerohedge.com/news/2019-02-15/european-car-sales-fall-fifth-month-row

Ed 30 days ago
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Ed 28 days ago
Autos Carnage Continues

Another day with not overly bullish data points for the beaten autos. China reports horrible car sales numbers, as well as talks of Trump considering import tariffs post the long-awaited report from the US Commerce Department, hit the wires early this morning

A possible tariff that Trump may impose would be a major negative for the carmakers already facing a cooling global car sales market. Both the tariffs as well as the Chinese imploding sales hit the market within a few hours.

https://www.askbrokers.com/news/market-intelligence/autos-carnage-continues


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Ed 28 days ago
China's automobile sales in January fell 15.8 percent from a year earlier, the country's top auto industry association said on Monday, marking the seventh straight month of declining sales in the world's largest auto market.

China's Association of Automobile Manufacturers (CAAM) said in an emailed statement to Reuters that sales dropped to 2.37 million vehicles last month. This follows a 13 percent drop in December and a 14 percent fall in November.


https://www.cnbc.com/2019/02/18/chinas-jan-car-sales-fall-nearly-16percent-from-2018-7th-month-of-decline.html

Ed 28 days ago
“Car sales in January continued to decline, and there was no sign of improvement. We estimate that February wholesales will also drop sharply” said Xu Haidong, CAAM assistant secretary general.

“The reason for the sales drop is still the slowing overall economy, and consumption decline in small- and medium-sized cities” Xu said.

https://uk.reuters.com/article/uk-china-auto/chinas-car-sales-tumble-road-ahead-bumpy-idUKKCN1Q70FZ

Ed 28 days ago
Japanese carmaker Honda is set to announce the closure of its only British car plant in 2022 with the loss of 3,500 jobs, a lawmaker told Reuters, in the latest blow to the UK car industry as Brexit approaches.


Honda built just over 160,000 vehicles at its Swindon factory in southern England last year, where it makes the Civic and CV-R models, accounting for a little more than 10 percent of Britain’s total output of 1.52 million cars.


“This is not Brexit-related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”

https://uk.reuters.com/article/uk-britain-honda-jobs/honda-to-close-uk-car-plant-with-the-loss-of-3500-jobs-idUKKCN1Q71BO

Ed 28 days ago
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Ed 25 days ago
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Ed 23 days ago
Carmageddon for Ford in the US, China, and Europe

Ford’s annual sales through its joint ventures in China – by far the largest auto market in the world where GM sells more vehicles than in the US – peaked in 2016 at 1.297 million vehicles, according to Ford’s 10-K. But in 2018, Ford sold only 731,000 vehicles. A two-year plunge of 44%.

https://wolfstreet.com/wp-content/uploads/2019/02/US-Ford-sales-China-2018.png


Ford’s US sales dropped for the third year in a row.

In 2018, Ford sold 2.54 million vehicles in the US, according to its 10-K. It was the third year in a row that sales declined, bringing the total decline to 5% from its peak in 2015. This puts the 2018 sales volume below where it had been in 2013:

https://wolfstreet.com/wp-content/uploads/2019/02/US-Ford-sales-US-2018.png



Ford of Europe’s long-term decline

When the Eurozone went through the Financial Crisis and its subsequent Euro Debt Crisis, Ford’s sales plunged 37% between 2008 and 2013. Then they recovered. In 2018, sales rose to 1.44 million vehicles. Quite a feat for a company whose global sales are swooning. But those 2018 sales were still down 16% from 2008:

https://wolfstreet.com/wp-content/uploads/2019/02/US-Ford-sales-Europe-2018-.png

https://wolfstreet.com/2019/02/22/carmageddon-for-ford-but-its-not-what-you-think/

Ed 23 days ago
https://wolfstreet.com/wp-content/uploads/2019/02/US-Ford-sales-global-2018-b.png

Ed 16 days ago
US Auto Sales Tumble To 18 Month Low As SUV Demand Hits A Brick Wall

SUVs were, until this month, one of the sole remaining bright spots in the rapidly slowing U.S. auto market. Despite the fact that they were crippling traditional sedan sales, Americans' transition to SUVs was seen as a silver lining, prompting many automakers to make infrastructure changes to account for the change in demand.


Those days, however, seem to be over, according to the latest, February U.S. auto sales data. Fiat Chrysler posted its first monthly sales decline in a year, according to Bloomberg.


The kicker? Jeep, the company's driving force for the past several years, showed a rare back-to-back drop in deliveries. Charlie Chesbrough, senior economist of Cox Automotive said: “The results today suggest a much bigger story: The sales pace has finally shifted into a lower gear.”

The fact that Jeep sales have slowed is a warning indicator that the SUV "boom" in the U.S. could be coming to an end.

Mired by higher interest rates and continued tightening of credit, buyers are forcing once record high SUV sales and prices back down again. As a result, Fiat's Jeep Wrangler sales fell 5.9% in the month, as inventory continued to pile up at dealerships.

Fiat joined companies like Toyota, Honda and Nissan, as virtually every OEM both missed analyst estimates for the month and posted an annual sales decline.

https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/feb%20sales.jpg


Some more details:

Ford sales, which are now only reported on a quarterly basis, were estimated to have fallen 4.4% in February as a result of the company's F-Series sales falling.

The Ford brand's total sales were down 5.1% with Lincoln sales helping cushion some of the blow, rising 15%.

GM sales are also estimated to have fallen 5.3% in the month, following a 6.9% drop in January.

Toyota sales were weighed upon by weak demand for its RAV4 compact SUV. Deliveries fell 12.5% for the model as overall sales fell 5.2% in February.

Honda saw sales of its Pilot SUV fall 8.8%. Nissan saw deliveries of its Rogue crossover SUV plunge 16%.

In total, the annualized February sales rate slowed to 16.6 million, the worst reading in 18 months, according to researcher Autodata Corp., also missing expectations.

https://www.zerohedge.com/news/2019-03-02/us-auto-sales-tumble-18-month-low-suv-demand-hits-brick-wall

Ed 16 days ago
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Ed 13 days ago
Deflationary Red Alert: Chinese Car Dealers Are Slashing Prices, And It's Not Helping

A new deflationary tide is rising amid the battleground that is China's auto industry, where manufacturers and dealers are scrambling to try and find a solution to tumbling demand, and while many have resorted to generous incentives and loan offers for consumers to regain market shares, Bloomberg reports that so far none of the measures have succeeded in stimulating the moribund local car markets.

Incentives and reductions totaling more than 10% of the sticker price are now common, while interest free loans are also being offered to try and lure car buyers to showrooms, especially outside of China’s major cities. For now, however, buyers still aren’t taking the bait and car sales continue to decline this year in China, after their first annual drop in more than two decades.





Meanwhile, desperate to put a price floor below the rapidly deflating Chinese auto market, in late January Beijing urged authorities to roll out measures to help boost vehicle sales in rural areas, noting that a similar effort about a decade ago helped revive demand. While local governments have yet to make any announcements, automakers are moving ahead with offers their own.

For instance, BAIC cut about $1000 off the price of its Senova Zhidao sedan. Buyers also have the option of choosing a $149 down payment or 0% interest for three years. Volkswagen said this month that it will offer an incentive package valued as much as $1800 for rural consumers that need to replace their aged models with new ones. Chongqing Changan said it would provide up to $3300 worth of incentives, as well.

https://www.zerohedge.com/news/2019-03-04/deflationary-red-alert-chinese-car-dealers-are-slashing-prices-and-its-not-helping

Ed 13 days ago
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Ed 11 days ago
Australia's GDP shows we're in a type of 'recession' and car dealers are bearing the brunt

Australia's economy is coming to a screeching halt and the nation's car dealers are bearing the brunt.

Industry figures show new car sales in February were down a whopping 9.3 per cent on the same month last year.

That backs up a 7.4 per cent slide in January, a 14.9 per cent slump in December and a 3 per cent fall over 2018 as a whole.

Either this is an early warning sign of things to come in other industries or a shock absorber for the rest of the economy.

https://www.abc.net.au/news/2019-03-06/car-dealers-bearing-the-brunt-of-australian-economic-slowdown/10875580

Ed 11 days ago
The Lyft IPO is all about destroying car ownership as we know it.

Car sales in Britain declined 18.2% in January. It was the eighth successive month of decline.

Sales in Turkey declined 60%.

Europe-wide, sales are down around 6%.

In the US, total car registrations have declined by about 10%

Tire sales – a proxy for vehicle production – are down in China, too.

People just don’t want cars that much anymore. Uber and Lyft are reducing the need for new cars. Automobiles could be entering an historic decline.

https://www.businessinsider.nl/carpocalypse-cars-automobile-sales-data-us-europe-2019-3/


Don't want... or can't afford.....

Either way.... if this continues... the auto industry collapses...


The auto industry is the single greatest engine of economic growth in the world. The global auto industry is a key sector of the economy for every major country in the world.

http://www.oica.net/category/economic-contributions/

Ed 9 days ago
Carmakers Get No Relief in China as Auto Sales Keep Plunging



China’s car sales fell for the ninth consecutive month in February, pulling automakers deeper into a slump that’s threatening their long-term growth plans in the world’s largest market.

Retail sales of sedans, sport utility vehicles, multipurpose vehicles and minivans fell 18.5 percent to 1.19 million units last month, the China Passenger Car Association said Friday. That follows a 4 percent decline in January and the first annual drop in more than two decades.


The worst car-market slump in a generation has prompted dealers and manufacturers to resort to generous discounts and cheap loans, yet consumers are still in a wait-and-see mode ahead of potential government incentives aimed at reviving the market, especially in rural areas.


Executives are predicting that the gloom will spell the end for the worst-performing manufacturers as the industry’s consisting of hundreds of manufacturers prepares for a reshuffle

https://www.bloomberg.com/news/articles/2019-03-08/carmakers-get-no-relief-in-china-as-auto-sales-keep-plunging

Ed 9 days ago
China Auto Sales Crash in February Amid Accelerating Industry Collapse

Just days ago, we reported that US auto sales had tumbled to 18 month lows, continuing what has been an abhorrent start to the year for the automotive industry after a dismal 2018.

Unfortunately, the global misery doesn't appear to be anywhere near over yet, with arguably the world's most important market, China, set to post another slate of miserable sales numbers for February.

New estimates from China's Passenger Car Association paint an outright terrifying picture for auto demand in the world's most populous nation as we head approach the end of the first quarter.


Unofficial auto sales data for February includes China's passenger vehicle sales down 16.9% YOY to 1,207,538 units for wholesale, and down 19.0% YOY to 1,169,751 units for retail. Luxury brands saw a 2.9% retail sales decline and mainstream JV brands had a 13.8% decline.

Domestic brands had a 27.5% decline.


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Meanwhile, the latest weekly sales estimates for OEMs released by Morgan Stanley show that Chang'an Ford will see a stunning drop of 76.1% in sales, followed by China's Brilliance Motor, who is set to see a 47.3% decline in sales.

BAIC Motor estimates are for sales down 46.9% and SAIC GM expects a drop in sales of 20.8%. SAIC VW and FAW VW will fall 8.9% and 4.1%, respectively, while Dongfeng Nissan is set to fall 8.3%.

Bucking the trend will be names like GAC Honda and BAIC Hyundai, rising 6.4% and 6.8%, respectively. GAC Toyota and Beijing Benz also will see positive traction in YOY sales, rising 20.4% and 17.1% YOY despite falling 62.2% and 21.6% sequentially, while the oddly named GAC Trumpchi is flat Y/Y.

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That said, almost all manufacturers are expected to experience significant double digit sequential drops.

The CPCA also expects a "lackluster" market in March with limited effect from discounts offered to rural customers.

We reported just days ago that car dealers in China, especially those in rural areas, were unable to lure in new buyers with traditional incentives, even as price reductions of more than 10% from the sticker price are now common, while interest free loans are also being offered to try and lure car buyers to showrooms, especially outside of China’s major cities.

For now, however, buyers aren’t taking the bait.

https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/chart_1.jpg


https://www.zerohedge.com/news/2019-03-08/china-auto-sales-crash-february-amid-accelerating-industry-collapse

Ed 7 days ago
It’s been a cruel winter for auto sales, as slowing deliveries of even once-hot sport utility vehicles signal the rapid onset of a widely expected downturn in U.S. new-car demand.

Even Jeep, Fiat Chrysler Automobiles NV’s star SUV brand, suffered a second consecutive monthly decline, driving the carmaker to its first total sales retreat in a year. At Ford Motor Co., sales fell 4.4%, worse than analysts projected, due in part to a drop-off in sales of its top seller, the F-Series, according to a person familiar with the results.

Those companies joined Toyota, Honda, and Nissan in trailing analysts’ estimates for February in a Bloomberg News survey.

Sales dropped 5.9% for Fiat Chrysler’s lucrative Jeep Wrangler, which entered February with inventory piling up at dealerships. The monthly results wiped out an early gain of as much as 1.7%, and the stock was little changed as of 3:30 p.m. Friday in New York. Shares of General Motors and Ford, which have switched to publicly reporting U.S. sales only on a quarterly basis, were also little changed.

“Affordability is going to be a challenge for consumers going forward, and we’re beginning to see that,” Michelle Krebs, senior analyst for car-shopping researcher Autotrader, said by phone.

http://fortune.com/2019/03/01/auto-car-sales-decline-jeep-ford-toyota-honda-nissan/


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