Sales of MINI automobiles in 2005 were up 13 percent, ending the year with a record-setting 40,820 vehicles compared to the 36,032 reported last year. The division also reported December sales of 2,436 cars compared to 3,810 cars sold in the last month of 2004, a decrease of 36 percent.
MINI USA Press
Great news, in stark contrast to the rest of the industry (save for Toyota). Mark LaNeve needs to get his head examined, re: his comment that GM’s cars are as good or better than Japanese counterparts. IMHO they’ve gotten better than 10 years ago but at not at that level.
GM and Ford Lose More Market Share
By GINA CHON
Staff Reporter of THE WALL STREET JOURNAL
January 5, 2006; Page A3
Detroit auto makers General Motors Corp. and Ford Motor Co. lost more market share in December, and industry executives are warning that a softening housing market, higher interest rates and continuing volatility in energy prices could put a damper on U.S. auto demand this year.
Mark Fields, Ford’s executive vice president and head of the Americas, said yesterday that he expects U.S. sales in 2006 “probably won’t outshine” 2005. Other industry executives said they expect sales in 2006 to be roughly flat compared with 2005. In December the pace of light-vehicle sales fell to a seasonally adjusted annual pace of 17.17 million vehicles from a 17.94 million-vehicle pace last December.
SOFTER SALES
See the complete December U.S. auto sales data1.Paul Ballew, GM’s executive director of market and industry analysis, said he expected 2006 to largely reflect the sales performance of 2005. He said although GM sales were down 10% in December, GM was happy with its results, considering GM had a record sales month in December 2004.
While domestic auto makers predicted a flat year for 2006, Toyota Motor Corp. predicted growth in the auto market. Jim Lentz, a group vice president at Toyota, said he expected the Japanese auto maker would increase sales by 5% in 2006, on top of a 10% increase for 2005. Toyota’s market share was 13.7% in December, compared with 12.2% last year. The Japanese auto maker is preparing to open more North American factories as it shoots for a 15% share of the U.S. market.
A slow- or no-growth year for U.S. auto demand promises to intensify the industry’s market-share wars, and increase pressure on GM and Ford to take stronger medicine to reverse losses in their high-cost North American operations. GM has outlined plans to shed 30,000 jobs, mostly through attrition, by 2008. Ford says it will detail its downsizing plans Jan. 23.
Even as Detroit’s auto makers face changes to their old-line businesses, tradition dies hard. GM yesterday trumpeted its Chevrolet brand’s dethroning of Ford as the No. 1 selling brand in the U.S., the first time Chevy has won the top spot since 1986. It was an echo of the old Detroit, where Ford and Chevy defined competition in the mass market.
GM’s U.S. market share declined in December to 25.9%, compared with 27.8% last year. Ford’s market share was 17.9%, compared with 19% last year. DaimlerChrysler AG’s Chrysler Group continued to outperform its crosstown rivals, reporting a 2.3% decline in sales that allowed it to hold 14.9% of the market in December, up from 14.6% a year ago.
Mr. Fields said the debate in the U.S. auto industry should no longer be about the Big Three. “It makes for great headlines…but it’s the wrong debate,” he said. “The real focus should be the up-for-grabs Big Six — the battle among six huge North American, European and Asian companies for growth and profits in the North American market.”
December’s sales results highlighted a significant and continuing shift in American consumers’ tastes that battered GM and Ford’s profits, and poses continued risks going forward. Sales of so-called traditional sport-utility vehicles, or SUVs, built on frames similar to pickup trucks, fell sharply in December, continuing a downward trend of the past three years. Rising in the place of truck-based SUVs are so called crossovers, which are derived from passenger-car chassis.
Car makers expect sales of crossovers to outpace sales of traditional SUVs for the first time in 2006. They predict that passenger cars will continue to do well in 2006, as demand for large SUVs remains flat or declines.
While GM, Ford and Chrysler have plans to field more crossovers, analysts say these models are unlikely to return the kind of profits that truck-based SUVs generated at their peak.
The shift away from large SUVs in 2005 presents an immediate challenge for GM, which is gearing up to launch officially next week a redesigned lineup of large truck-based SUVs. These SUVs, code-named GMT-900, are central to GM Chairman and Chief Executive Officer Rick Wagoner’s near-term strategy for reversing GM’s North American losses, which have totaled $4.8 billion through the first nine months of 2005.
GM could use the SUVs to launch a new pricing strategy, aimed at avoiding a repeat of last year’s summer-clearance sale, when GM offered vehicles at employee-discount prices. The offer created a sales surge followed by several months of depressed demand.
GM offered a new round of incentives.
Incentives for some 2006 models, such as full-size SUVs, offer as much as $5,500 cash back until Tuesday. For some 2005 models, rebates for as much as $8,000 are offered until Jan. 31.
Mark LaNeve, head of GM’s sales and marketing, says one of the ways it hopes to beat its competition is to undercut its competitors in sticker prices.
“Our argument to the American public is our cars are just as good if not better and you’re paying more for Japanese products,” Mr. LaNeve says.
Gordon Stewart, head of the Harper Woods, Mich., Stewart Management Group that has three Chevy dealerships, said the public has only recently become aware of GM’s coming SUVs so he hasn’t yet heard of a lot of demand for those vehicles. He is optimistic for 2006, predicting sales will increase about 5% because of the product launches.
Wonder why such a decrease in units sold in December, yet overall units are up for the year. What happened in December to show such a decline?
In a word……….rebates and the employee pricing (ok more than one !) were discontinued.
I disagree – GM scores better than some of the Japanese and German makes. So it’s not really fair to kick a car manufacturer while they’re down.
I agree with Kurt’s point. GM has scored well. The biggest issue I have with most American cars is their resale value, or lack thereof. My Dad traded in his Cadillac STS for the latest model and after only 4 years he got next to nothing for it.
If you lease, then it doesn’t really matter as much. But as an ownership thing, resale makes a difference IMHO.
Regardless of the ratings GM and others have gotten, I still notice differences in quality, engineering and handling. There is still some catching up to do.
You know I’m an AMERICAN, born here, live here, love the place but………F………GM & Ford! Malibu, Cobalt, Aztek, Fusion, Five Hundred, Aerostar, Vue, Impala, Monte Carlo, Saturn….says it all. Embarassing!
Cadillac has been the only brite spot for them in the last few years.
Since others brought up the subject……….a neighbor has just bought a $55K+ Corvette. He’s had more time at the dealer in the last two weeks that I did with my original ’02 MCS in it’s 1st year which wasn’t great advertising for MINI.
This was about MINI not those idiots.
<blockquote>I disagree – GM scores better than some of the Japanese and German makes. So it’s not really fair to kick a car manufacturer while they’re down.</blockquote>
A lot of that undoubtedly has to do with customer expectations. Owners of Buicks frankly don’t have the expectations that a MINI, BMW or Acura owner would have. Yet many of the products overlap price points so it’s not like the customer should really expect less. Even the brand new car (the name escapes me) that they’re pushing these days is a complete joke when it comes to quality of materials and craftsmanship. It’s more of an appliance than a car (a bad one at that) and it’s something that owners don’t want to even think about. They just want it to start, go, stop, and occasionally turn.
To ScottinBend, this follow-up is interesting…Sure, I agree GM & Ford have gotten better…
GM Official Regrets
Employee Discounting
By GINA CHON
Staff Reporter of THE WALL STREET JOURNAL
January 5, 2006 1:15 p.m.
General Motors Corp.’s top North American sales and marketing executive, Mark LaNeve, said he now regrets launching the employee-discount program that drove GM sales to record levels last summer, and doesn’t plan to repeat such promotions this year.
Instead, Mr. LaNeve said in a recent interview that GM will roll back prices, and try to emphasize the advantages of its new models. Mr. LaNeve declined to say how much GM would lower prices compared to Ford Motor Co., Toyota Motor Corp. and other car makers, but he said the sticker prices would be “aggressive.” The first indicator of how low GM tends to go will be in the pricing for the new Chevrolet Tahoe, which will be announced next week during the Detroit auto show. The current base model has a starting price of $34,990.
“In some ways we are turning back the clock,” said Mr. LaNeve, vice president for GM North American vehicle sales and marketing, in an interview just before GM’s year-end holiday break. “The Japanese made their mark by making good products at a lower price. So to some extent, we are going to underprice them.”
Mr. LaNeve said the employee-discount promotion, which GM began last June, was very efficient in moving vehicles. Ford and DaimlerChrysler AG’s Chrysler Group soon followed with their own programs in July.
But after the program ended three months later, sales dipped and hit a low in October, when sales fell by 26%. The payback from the summer sales bonanza was compounded by high gasoline prices because of Hurricane Katrina, which drove down sales of sport-utility vehicles.
The employee-discount program also caused the Detroit auto maker to focus its advertising messages on the sales promotion, instead of highlighting product attributes and its effort to reduce base prices on certain models.
Hindsight being 20/20, I probably wouldn’t have done it,” Mr. LaNeve said.
GM intends to kick off an aggressive product message in 2006 to talk about quality and value. GM plans what Mr. LaNeve describes as a “straightforward message on competitiveness, price advantages.” In some cases, that will mean calling out specific competitors, like Toyota and Ford, sometimes on a model-by-model basis.
This year is critical for GM, which is launching 19 new products, including five full-size SUVs, two full-size pickup trucks and a handful of new smaller SUVs, known as crossovers.
“Our comeback has to be fueled by great products,” Mr. LaNeve said. “There has been no comeback in our industry that hasn’t been fueled by great products.”
Aside from trying to stop its market-share slide, which was at 26% for 2005, Mr. LaNeve is looking at addressing the perceptual gloom surrounding the company. There are rumors that GM will file for bankruptcy-court protection. Analysts say GM produces cars that nobody wants to buy. And some consumers who left GM in the 1980s still refuse to return.
“We’ve got to get our mojo back in terms of the way we are viewed,” he said. “But I don’t know what the answer is. How do we get America rooting for us?”
The issue that I’m most interested in is why are MINI sales down so much in December compared to last year?
Hmmm, maybe it’s a combination of several things: tighter economy (although Christmas retail sales grew, they didn’t grow as much as the sector wanted) due to higher fuel costs this fall, and people gearing up for the more expensive winter, overall; the housing bubble is also definitively softening, especially up here in the Boston area where I am; people realizing there’s a new model coming (but it’s quite a ways off, so it will be interesting to see if the next 6-8 mos are also softer) and more competition in the segment(Audi A3, new VWs, etc)
BTTT!!!!
Chris LW
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As always, <a href="http://www.gbmini.net/sales.shtml" rel="nofollow">MINI sales details</a> are on my website. I wonder if the December downturn is the beginning of production backing off for the factory rework …
Maybe the MINI Sales Reps were spending their huge sales bonuses on a record year and floated into 2006.
The slow sales may be due to the fact that there are few MINIs on the lots. (Might be because of the factory rework Ian mentioned.) The dealers seem to have mostly cabrios — not big sellers in December.
We, the aficionados that visit motoringfile.com and attend track days, are most likely the exception, not the rule. I would guess many buyers don’t know about the configurator and the many options available. They buy what they can see.
Ford Fusion, Mercury Milan, Lincoln Zephyr = Mazda 3 sedan
Chevy Cobalt, Saturn ION, Chevy HHR = Opel Astra
I think some people here are pretty much hung up on “Badge engineering”.
Slght correction for Frank
Ford Fusion, Mercury Milan, Lincoln Zephyr = Mazda 6 sedan
Volvo S40, Volvo V50, Ford Focus (new euro version not the rehashed US version) = Mazda 3
Thanks for the Link Ian C. Most of the downturn in sales year on year is convertible sales. This seems to confirm my hunch that sales were higher last year as the drop-top was fairly new and probably still generating early excitement, despite the winter chill.
I agree with O Capn on those massive articles posted here….UGH! Start your own website!
Frank, if that badge engineering was directed towards me I’m not sure what you meant. You have sum spalain’n to do.
Giacomo, yes it was (Tongie in cheek).
Can you explain how the new Ford Fusion, et al are embarrasing cars? Agreed, there are no MINIs and probably you and I will never buy one, but for what I have read in the automotive press and reputable rags, Ford seems to have a winner in their hands with the Fusion. The Fusion comes on the 20th anniversary of Ford’s most significant and successful mid-size sedan effort ever: The Taurus.
The Fusion, Milan and Zephyr all ride on the Mazda 6 platform which appears to be pretty good when stacked up against other established competitors.
I also think the 2006 Impala looks like a fairly attractive set of family wheels. At least it has more style than the hum-drum Toyota Camry and Buickesque Honda Accord. The SS version has a 5.3L small block V8 producing 303HP. Unfortunately this car is still FWD.
What about the Chrysler 300? Yes Detroit has some catching up to do and I am also find myself in agreement that Detroit’s bad reputation with consumer will forvever hunt them However, I see a concerted effort to revive the car segment and step away a little from the SUV and full size truck. I also believe that quality is no longer an issue with Detroit products, rather the bad perception among consumer is what hampers them.
Have you seen the new Pontiac Solstice? (And upcoming Saturn Sky roadster?) That thing looks SWEET. I never taught I would find myself ever salivating over a Pontiac or Saturn. Roadsters are out of the question for me, but I give credit where credit is due… GM did a terrific job with these cars. There are certainly not yesteryear’s Pontiac Fieros.
I hate Fords, but the current Mustang is a terrific car and proof positive that GM should have never abandoned the Camaro and Firebird/TransAm into obsolence. Where is the current day Dodge Challenger?
Detroit is engaged in an uphill battle, but for the first time in 30+ years, there are some very good products “Gotta haves” coming out of their plants.
Frank I won’t say much..To each is own…but I do disagree with most of what you said and find most of the cars you describe a joke.
It is ok to be biased. But being blind folded to Detroit’s progress is being a little arrogant, me thinks…
To each his own…
We agree to disagree on this now back to MINI stuff.
Agreed!