On the surface, May’s automotive numbers looked pretty good.
After all, May 2012 saw 25% more vehicles sold than May 2011. Is there more to this? Local dealers need to look deeper into the numbers to see the real story. Here are three smart starting points on today’s US automotive market:
1. May 2011 was a Disaster
In May of 2011, there were 1.06M light vehicles sold. That’s not good for May. The auto market was still recovering from recalls and natural disasters on the supply side of things, and much tighter financial restrictions on the demand side. In short, analysts were expecting this May to leave last May in the dust — by much more than 25%. If you follow the SAAR (you should), the seasonally-adjusted selling rate dropped to 13.7M units, well below prior 2012 forecasts set at 14.5M.
2. Pacific Power
While April’s gains were lead by a strong showing in the US by European makes, May’s positive ground had a Pacific flavor, led by Toyota’s +87% rebound over May 2011, and Honda’s +48%. All told, Asia-Pacific automakers sold 41% more vehicles this May versus last year. The frenetic pace of Korean sales slowed a bit, but keep in mind their May 2011 was pretty strong compared to the market. Hyundai and Kia showed gains of 13% and 7%, respectively. In short, nearly two-thirds of the market’s 25.7% YTY gain was fueled by Asia-Pacific imports.
3. That’s a BIG Point
Last May, one point of share in the US auto market was worth a bit more than 10,000 vehicles. Because the market has expanded dramatically over the past 12 months, a point of market share today equals roughly 13,300 cars. That’s a huge difference.
This fact makes Toyota’s share gain that much more impressive. The recovering giant sat at just over 10% of the US market in May 2011, following the challenges of recalls and natural disasters. A year later Toyota’s share is 15.3%. It has stormed well ahead of Chrysler and is closing in on Ford. And despite consistent gains, GM’s share remains as its smallest portion of the US market in decades. Will Toyota soon be sitting atop the market?
Toyota is in the midst of a triple-crown of solid metrics: expanding market share of an expanding market, all with growing price points. Not a bad rebound at all.
Use this information to see where local auto dealers are pacing versus the overall market. A Toyota dealer who is up 40% over last May might think things are good, when in fact their growth could be severely trailing the market. Be sure to stay on top of this info. Follow ESA on Twitter or Facebook to get your daily helping of market intel!
Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.
ESA Graph of the Week
