By: Tim Plouff
The business side of selling automobiles is driven by hard-core data—not emotions, not fluffy press releases, not ideological dreams, just hard, real world numbers. If consumers aren’t buying the product, if fleets are not signing up for large contracts, and if dealers are not pushing for more inventory, then, well, various trends may well be illusions.
The momentous slide of conventional sedan sales continues unabated, a process that started just over ten years ago. While GM, Ford, and FCA/Stellantis have rapidly shifted to larger crossover and truck portfolios in their showrooms, automakers like Volkswagen and now Mazda are ceasing production on once popular sedans. Toyota, Honda, Hyundai, and Kia remain forces in four-door car production, but even these stalwarts are creating more crossover/hatchback vehicles as they too witness declining sedan sales.
Even when automakers were frequently criticized for creating niche vehicles, or, designs that the critics assailed (think Pontiac Aztek), automakers are business operations first; products that they don’t think will sell (for a profit) generally are not created.
Which leads to the two elephants sharing the stage; the out-sized expansion of all things truck, truck-like, and wanna-be truck, versus everything proposed as a battery electric vehicle.
So far in 2021, the BEV makers are crowing that sales are up to 2.4% of the total new car market—a significant 37% gain over 2019 and 2020. However, with computer chip availability limiting the production of many high-volume vehicles, specifically Ford’s truck-focused lineup, total new vehicle sales are depressed from what the market is willing to devour. Given the addition of several new BEV’s to the marketplace, their sales growth should be occurring.
At least Ford can take solace that the new Mustang Mach-E BEV is a top-five selling electric vehicle in the US market. Lending credence to the company’s decision to label the Mach-E a Mustang is supported by the production data indicating that Ford has built more Mach-E’s so far this year than it has conventional gasoline-powered Mustang’s. Pony car fans should be alarmed; Mustang sales remain flat (actually way down from 2019), Dodge’s Challenger sales are close to beating the Mustang thus far in 2021, while Chevy’s Camaro appears to be morbid.
Bright spots exist for many new products. Toyota’s redesigned Sienna minivan, now solely available as a hybrid, has seen sales more than double the outgoing model—even as Kia’s all-new Carnival van makes inroads into this family-oriented segment. Jeep’s Grand Cherokee continues to sell at a high pace—with an all-new model waiting in the wings. Nissan’s latest Rogue is returning consumers to the stressed brand’s showrooms, GMC’s Sierra continues last year’s elevated sales gains post-pandemic, Land Rover’s Defender is now the marquee’s top-selling product in the States, and Chevy is finally filling long postponed Corvette orders. Fans of Ford’s Bronco are hoping to avoid the same delays that befell America’s favorite 2-seater.
Through the end of June 2021, the big story (besides the projected loss of 1.5-million production units due to the computer chip shortage) is Toyota’s rise to the top of America’s auto sales charts—for the first time ever. Toyota has the number one selling crossover, the RAV4, the top-selling sedans, the Camry and the Corolla lead all challengers, the Highlander is the best-selling full-size crossover, the Tacoma is the leading mid-size pickup truck, and the revised Sienna is the top-selling minivan. Even the brand’s celebrated Prius hybrid, suffering a long sales drought, has seen its numbers return to 2018 sales levels as American drivers resort to whatever is available in inventory starved showrooms.
The conversion to crossovers from sedans is best illustrated by the slowing of hallmark products like Honda’s former top-selling Accord. The brand’s CR-V crossover (213,199-units YTD) is now Honda’s most important product, exceeding Civic sales by 30% and almost doubling Accord sales. The CR-V alone more than doubles luxury brand Acura’s total vehicle sales, data that should raise concern about not only the viability of Acura long-term, but other luxury brands like Lincoln, Cadillac, and Infiniti that are under distinct product development pressure as the automaker’s look to convert to BEV’s ahead of a less than receptive marketplace.
Tesla, the general media’s darling for progressive headlines—despite growing reports of vehicle fires and autonomous driving accidents, has seen good sales growth through the first six months of the year, up 41% over the previous pandemic-afflicted year, with the Model Y now far and away the automaker’s best-selling vehicle. Chevy’s Bolt, up 60%, is in third place and is ahead of the gaining Mustang Mach-E, while Nissan’s Leaf (the only other sales significant solely BEV) is lost somewhere in Kansas.
Despite the negative chip news, Ford’s F-series remains America’s favorite new vehicle, and currently on par with last year’s depressed volume. Stellantis’ Ram series has once again edged ahead of Chevy’s Silverado pickup for the number two slot, over 313,000-units sold, while GMC’s Sierra is up another 24% this year. For perspective, the F-series lineup is outselling the entire volumes of Lincoln, Cadillac, Infiniti, Volvo, Acura, and Mitsubishi—combined.
Auto dealers have virtually no floor-plan costs, advertising expenses are shrinking, while sales are often at, or over, sticker prices—average new vehicle transaction prices have crested $40,000, up over $5,500 in less than a year. This trifecta of increased profits better get banked, as this roller-coaster will crest the curve very soon—probably the same time that excessive inflation re-directs consumer’s purchasing focus.