As the alternative rock band The Smiths might say right about now, Stop Me If You’ve Heard This One Before.
The US Automotive market finished August with another strong double-digit gain, up 20% over August 2011. This performance brought the SAAR (seasonally adjusted rate) over 14.5M, but — once again — Detroit’s decent gains (+10%) continue to mask their prolonged share erosion. This is a recurring theme, especially for Ford and GM. Our top three “Car Keys” from the August tally:
1. Japan’s Recovery Grows (Even) Stronger
Toyota and Honda remain red-hot, making it four straight months of big double-digit gains which have far outpaced the market’s brisk growth. Honda’s 60% bounce mirrored their +57% from July, while Toyota outstripped their August 2011 by 46% — impressive considering this gain was on a much higher volume base than Honda.
2. Concentrated Gains
The 20% gain in US vehicle sales was highly concentrated in the performance of three brands, as 126,000 — or nearly 60% – of the 213,000 additional units were from the Honda, Toyota, and VW families. Kia (+22%) and Subaru (+36%) outpaced the market on smaller volume; outside of that, the remaining major automotive brands trailed the market’s advance (BMW, Chrysler, Daimler, Ford, GM, Hyundai, and Nissan). That the gains are concentrated is not the key point; the fact that it is the same 3-4 automakers comprising a majority of the gain over 3-4 months now is significant.
3. Detroit Losing More Share
Detroit’s +10% composite for August looks good on the surface, but still came in at half the market’s overall pace. A closer look shows us that two US brands (GM and Ford) have lost significant share to two Japanese makes (Toyota and Honda) over the past 12 months. A year ago, Toyota trailed Ford by 45,000 vehicles a month. Today, that gap sits at 8,000 … while shrinking rapidly.. At this rate, Toyota’s sales rate should pass Ford’s within the next quarter. Likewise, Honda’s year-over-year gain in actual vehicles sold (49K units) more than doubled GM’s (22K).
Repeating July’s take-away, expect domestic dealers (especially GM and Ford) to be looking for more help than their import counterparts, at least for the foreseeable future.
Use this information to see where local auto dealers are pacing versus the overall market. A Honda dealer who is up 30% over August 2011 might think things are good, when in fact their growth could be severely trailing the market. 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.