xcel
10-06-2006, 05:50 PM
The Prius has just an eight-day supply. (http://www.forbesautos.com/news/headlines/2006/october/fdc100506-smallsells.html)
Jerry Flint - Forbes.com - Oct. 5, 2006
http://www.cleanmpg.com/photos/data/501/Prius_II1.jpg
Massively popular and fuel-efficient Toyota Prius.
Fuel prices have been dropping the past few weeks. No one knows how low they will go or when they will begin to climb again. Nevertheless, it is reasonable to think that recent experience is making buyers more cautious when it comes to big and fuel-thirsty SUVs and pickup trucks.
The shift in the marketplace is quite evident when looking at the automotive industry’s commonly used figure called “days supply,” which measures how long the stockpile of a particular model would last based on the selling rate over the previous month. In general, the industry considers a 60-day supply to be a manageable number. The higher the supply of a model, the greater the likelihood of production cuts or heavy sales incentives to help clear our bloated inventories. In contrast, models with a days supply down in the teens or single digits are likely to sell for close to their sticker price, if not more.
What’s moving|
Toyota Prius|8-day supply
Toyota Scion xA|10
BMW Mini|11
Honda Fit|11
Nissan Versa|13
Toyota Yaris|15
|
What's Sitting on the Lots|
Toyota Land Cruiser|154-day supply
Dodge Durango|119
Chevy Tahoe|101
Nissan Armada|92
Ford Explorer|85
Toyota Sequoia|67
Source: Automotive News
The comparisons require some additional interpretation, but they give a good indication of what is going on in the industry. That Prius, with only an eight-day supply, is Toyota Motor’s famous hybrid, and the Honda Motor Fit, Nissan Motor Versa and Toyota Yaris are new, small, imported cars. Manufacturers are still filling up the pipeline with these cars, so right now dealers are quickly selling every vehicle that they receive. For example, the 11-day supply on the Honda Fit represents only 1,000 vehicles. That aside, it looks like these small cars are off to a good start in the U.S.
In contrast, dealers are having a hard time selling vehicles like the big SUVs. It was not that long ago that these were high-volume sellers, for which the manufacturers kept good-sized inventories because of the strong demand. Yes, high fuel prices are one reason for the slowdown, but the proliferation of models in this segment and the growing demand for crossover sport utilities is also taking a toll on the truck-based SUVs.
Subcompacts are Strong, Too|
Honda Civic|15-day supply
Toyota Corolla|17
Dodge Caliber|23
Chevy Cobalt|35
Ford Focus|52
Source: Automotive News
The subcompact market is robust, and manufacturers make large numbers of these cars. The Corollas, Civics and the Detroit models are big sellers. The Honda Civic, the leader in this segment, is selling at more than 300,000 a year. That 35-day supply of the Chevy Cobalt is equal to 25,000 vehicles. One of the weaker cars in this group is the Ford Focus, which has a 52-day supply. Whereas the Chevy Cobalt, Dodge Caliber and Honda Civic are all new or relatively new, the Focus is long overdue for a serious makeover.
Big Pickups are Weak|
Dodge Ram|98-day supply
Chevy Silverado|96
Ford F-150|93
Nissan Titan|91
Source: Automotive News
Pickup trucks still lead the industry in sales, but inventories are piling up on the lots. That is why manufacturers are cutting production schedules.
The sales and inventory figures show that car sales are climbing and truck sales slowing, but trucks are still half the total market. Truck sales are shifting from the heavier models to lighter models. Of course, there are some exceptions. Toyota’s new macho FJ sport utility, a retro-styled, white roofed, boxy, rugged vehicle is selling at a 70,000-a-year rate, and the inventory is just 20 days. With just 16 mpg city/19 mpg highway, the FJ is no fuel sipper, and it uses premium gasoline. Yet, thirsty or not, folks like it.
Total inventories at the start of September were 3,241,500 cars and trucks, according to Automotive News. That is equal to a 59-day supply, higher than last year’s 2,955,800, a 52-day supply. Among the Detroit companies, General Motors, Ford Motor and Daimler Chrysler are running a 72- to 73-day supply. That is not terrible, but higher than the best Japanese companies, Toyota (27-day supply) and Honda (31). Yet the overall market is relatively healthy, as last month’s sales matched the year ago month.
If gas prices continue to trend downward, the bigger trucks may get a bit of a reprieve. If so, that would take some of the pressure off Detroit. The home team lags the competition in offering high-quality, fuel-efficient small cars such as the Toyota Yaris. Making small, low-priced cars in a high-cost environment - wages, health care, pensions, taxes - is a tough one. General Motors imports Korean models; Ford has been thinking of a new plant to build such cars, maybe in Mexico; Chrysler is looking for a partner in China.
For the moment, trends are positive, but we will see whether large numbers of American buyers really want tiny cars.
Jerry Flint - Forbes.com - Oct. 5, 2006
http://www.cleanmpg.com/photos/data/501/Prius_II1.jpg
Massively popular and fuel-efficient Toyota Prius.
Fuel prices have been dropping the past few weeks. No one knows how low they will go or when they will begin to climb again. Nevertheless, it is reasonable to think that recent experience is making buyers more cautious when it comes to big and fuel-thirsty SUVs and pickup trucks.
The shift in the marketplace is quite evident when looking at the automotive industry’s commonly used figure called “days supply,” which measures how long the stockpile of a particular model would last based on the selling rate over the previous month. In general, the industry considers a 60-day supply to be a manageable number. The higher the supply of a model, the greater the likelihood of production cuts or heavy sales incentives to help clear our bloated inventories. In contrast, models with a days supply down in the teens or single digits are likely to sell for close to their sticker price, if not more.
What’s moving|
Toyota Prius|8-day supply
Toyota Scion xA|10
BMW Mini|11
Honda Fit|11
Nissan Versa|13
Toyota Yaris|15
|
What's Sitting on the Lots|
Toyota Land Cruiser|154-day supply
Dodge Durango|119
Chevy Tahoe|101
Nissan Armada|92
Ford Explorer|85
Toyota Sequoia|67
Source: Automotive News
The comparisons require some additional interpretation, but they give a good indication of what is going on in the industry. That Prius, with only an eight-day supply, is Toyota Motor’s famous hybrid, and the Honda Motor Fit, Nissan Motor Versa and Toyota Yaris are new, small, imported cars. Manufacturers are still filling up the pipeline with these cars, so right now dealers are quickly selling every vehicle that they receive. For example, the 11-day supply on the Honda Fit represents only 1,000 vehicles. That aside, it looks like these small cars are off to a good start in the U.S.
In contrast, dealers are having a hard time selling vehicles like the big SUVs. It was not that long ago that these were high-volume sellers, for which the manufacturers kept good-sized inventories because of the strong demand. Yes, high fuel prices are one reason for the slowdown, but the proliferation of models in this segment and the growing demand for crossover sport utilities is also taking a toll on the truck-based SUVs.
Subcompacts are Strong, Too|
Honda Civic|15-day supply
Toyota Corolla|17
Dodge Caliber|23
Chevy Cobalt|35
Ford Focus|52
Source: Automotive News
The subcompact market is robust, and manufacturers make large numbers of these cars. The Corollas, Civics and the Detroit models are big sellers. The Honda Civic, the leader in this segment, is selling at more than 300,000 a year. That 35-day supply of the Chevy Cobalt is equal to 25,000 vehicles. One of the weaker cars in this group is the Ford Focus, which has a 52-day supply. Whereas the Chevy Cobalt, Dodge Caliber and Honda Civic are all new or relatively new, the Focus is long overdue for a serious makeover.
Big Pickups are Weak|
Dodge Ram|98-day supply
Chevy Silverado|96
Ford F-150|93
Nissan Titan|91
Source: Automotive News
Pickup trucks still lead the industry in sales, but inventories are piling up on the lots. That is why manufacturers are cutting production schedules.
The sales and inventory figures show that car sales are climbing and truck sales slowing, but trucks are still half the total market. Truck sales are shifting from the heavier models to lighter models. Of course, there are some exceptions. Toyota’s new macho FJ sport utility, a retro-styled, white roofed, boxy, rugged vehicle is selling at a 70,000-a-year rate, and the inventory is just 20 days. With just 16 mpg city/19 mpg highway, the FJ is no fuel sipper, and it uses premium gasoline. Yet, thirsty or not, folks like it.
Total inventories at the start of September were 3,241,500 cars and trucks, according to Automotive News. That is equal to a 59-day supply, higher than last year’s 2,955,800, a 52-day supply. Among the Detroit companies, General Motors, Ford Motor and Daimler Chrysler are running a 72- to 73-day supply. That is not terrible, but higher than the best Japanese companies, Toyota (27-day supply) and Honda (31). Yet the overall market is relatively healthy, as last month’s sales matched the year ago month.
If gas prices continue to trend downward, the bigger trucks may get a bit of a reprieve. If so, that would take some of the pressure off Detroit. The home team lags the competition in offering high-quality, fuel-efficient small cars such as the Toyota Yaris. Making small, low-priced cars in a high-cost environment - wages, health care, pensions, taxes - is a tough one. General Motors imports Korean models; Ford has been thinking of a new plant to build such cars, maybe in Mexico; Chrysler is looking for a partner in China.
For the moment, trends are positive, but we will see whether large numbers of American buyers really want tiny cars.