Auto on Info  September 2004

In the U.S. in August 2004, Sales at Both Ends of the Quality Spectrum Are Mixed, Ford's Market Share Remains at .18, and Once Again Toyota Displaces Chrysler as Number 3

Nissan, with a 1995-1999 Reliability Percentrank average of .74, increased its U.S. auto sales by 7% in August 2004, over those of August 2003. Nissan's U.S. sales for the first eight months of 2004 are up 23%.

The above monthly unit sales percentage change is a daily selling rate percentage change. In August 2004, there were only 25 selling days; in August 2003, 27 selling days. AOI always uses the daily selling rate percentage change, as it gives the best view of economic and automotive industry change. This is also the customary practice of the news media; however, most of the September 2004 news articles dealing with August 2004 auto sales departed from this standard, possibly for sensationalism.

Toyota, with a 1995-1999 Reliability Percentrank average of .90, saw its U.S. auto sales fall by 3% in August 2004. Toyota's U.S. sales for the first eight months of 2004 are up 9%.

In August, 2004, Toyota sales again exceeded those of Chrysler. This is the third such occurrence and the second consecutive month.

For August 2004, Toyota again published very detailed information on vehicle sales. The following table provides this detailed information, but separates out the Scion division from the Toyota division, together with 1995-1999 model Reliability Percentrank averages. Those models that were among July 2004's Hottest Ten, for all manufacturers, are in bold blue. That model that received CAA's most recent Pyramid Award for ownership satisfaction is italicized.

Table I: August 2004 Toyota Sales, Percentage Changes, and 1995-1999 Reliability Percentrank Averages, by Line, Type, and Model
Manufacturer	Division	Type of Vehicle	Model	Sales Volume	Percentage Increase for August 2004 from August 2003	1995-1999 Reliability Percentrank Average
Toyota Motor Corporation				180,394	-2.8%	.90
	Scion Division			12,480	588.4%	N/A
			xA	2,435	302.1%	N/A
			xB	4,927	359.1%	N/A
			tC	5,118	N/A	N/A
	Toyota Division			154,994	-3.8%	.88
		Passenger Car		73,365	-12.9%	N/A
			Camry	35,612	-17.4%	.86
			Corolla	29,481	-10.4%	.93
			Prius*	4,393	1,486.8%	N/A
		Light Truck		69,149	-8.1%	N/A
			Sienna (minivan)	12,128	60.9%	.731
			Highlander (SUV)	11,652	-17.3%	N/A
			4Runner (SUV)	10,382	-8.9%	.92
			Land Cruiser (SUV)	562	1.7%	.731
			Tundra (pickup truck)	10,379	-2.4%	N/A
			Tacoma (pickup truck)	13,187	-19.3%	.93
	Lexus Division			25,400	3.9%	.94
		Passenger Car		11,787	2.9%	N/A
			ES330	6,634	19.7%	.962
			LS430*	2,527	13.2%	.972
			SC 430 (hardtop convertible)	822	-16.1%	N/A
		Light Truck		13,613	4.7%	N/A
			RX 330* (SUV)	9,832	1.8%	.851,2
			GX 470 (SUV)	3,082	16.9%	N/A
			LX 470	699	-0.9%	N/A
1Based on data for 2 or fewer model years
2Includes data for preceding model number
Bold blue script indicates that the model was in July 2004's Hottest Ten, for all models of all manufacturers.
Italicized script indicates that the model received CAA's most recent Pyramid Award for ownership satisfaction.
Underscored script indicates that the model is a recent Consumer Reports Quick Pick.
A gold asterisk (*)indicates that the model is a CR 2004 Top Pick.

The Toyota Motor Corporation models showing the largest sales gains in August 2004 over August 2003 are the Toyota Prius, up 1,486.8%, the Scion xB, up 359.1%, the Scion xA, up 302.1%, the Toyota Sienna, up 60.9%, the Lexus ES330, up 19.7%, the Lexus GX 470, up 16.9%, and the Lexus LS 430, up 13.2%. Sales of the Lexus LX 470 for the first eight months of 2004 exceed those of the Toyota Land Cruiser, a more Spartan cousin, by 37.2%.

Toyota's Scion line, up 588.4%, is a new line. It is intended to meet the tastes and needs of young adults; however, it has, as well, proven popular with Baby Boomers - older folks who are generally young at heart.

The Toyota Prius, up 1,486.8%, is Toyota's gas-electric hybrid. The extraordinary popularity of the 2004 edition is likely a consequence of a combination of factors. First, the 2004 Prius is a midsize sedan. Second, it employs new gas-electric power-train technology that delivers more power and performs greater work per unit of energy source. This gives it an acceleration comparable to that of the Camry midsize sedan and increases its estimated EPA rating for in-city driving from 55 miles per gallon to 60 miles per gallon.¹ In short, the 2004 edition of the Prius is a bigger car with better gas mileage than its previous editions. Third, it is both a Consumer Reports Quick Pick and a CR Top Pick with a predicted reliability in the highest category.

To meet the surging demand for the Prius, Toyota announced that it plans to increase production by 50% from August 2004 to July 2005.¹

Mazda, with a 1995-1999 Reliability Percentrank average of .72, saw its August 2004 U.S. auto sales fall 20%. Mazda's U.S. sales for the first eight months of 2004 are up 6%.

Honda, with a 1995-1999 Reliability Percentrank average of .86, saw its August 2004 U.S. auto sales fall 7%. Honda's U.S. sales for the first eight months of 2004 are up nearly unchanged. Subaru's August 2004 sales fell 13% and year-to-date sales have fallen 6%.

From the foregoing, it may be seen that August 2004 sales by the auto manufacturers of quality products were mixed - Nissan up quite a bit, Toyota down a bit, and Honda and Mazda down quite a bit; however, overall, the sales by auto manufacturers of quality products in the first eight months of 2004 have been good; for Toyota (+9%), Nissan (+23%), and Mazda (+6%), excellent.

At the other end of the quality spectrum, General Motors, with a 1995-1999 Reliability Percentrank average of .30, had August 2004 sales that were down 7% from those of August 2003. Nonetheless, GM's sales may still be rather artificially bloated, as Ford is jettisoning some of its low-profit-to-unprofitable fleet sales and GM is gathering up a goodly amount  of what Ford is discarding. GM's U.S. sales for the first eight months of 2004 are down 2%.

Chrysler, with a 1995-1999 Reliability Percentrank average of .31, saw its August 2004 U.S. auto sales rise 1%. Chrysler's U.S. sales for the first eight months of 2004 are up 2%.

Ford, with a 1995-1999 Reliability Percentrank average of .51, saw its July 2004 U.S. auto sales fall 4%. Ford's U.S. sales for the first eight months of 2004 are down 5%.

All three of the Big Three had lower U.S. car sales in the first eight months of 2004. The decrease in car sales suggests that the conceptual equation "Big Three cars = poor quality" may be well planted in the U.S. and is beginning to enter the second quartile of the U.S. population, although the bottom quartile is likely nearly untouched.

The U.S. market shares, historical and year-to-date, together with natural market share estimates, are given in the table below.

Hyundai continues to edge closer to a 3% market share, Chrysler tenaciously clings to its 13% market share, and General Motors' and Ford's shares will likely fall no further in the remainder of the year. Nissan still needs more months of good sales to retain its 6% market share for the year.

In the Hyundai vs. General Motors war, Hyundai is winning, with vehicle sales up 1% in August 2004 and 3% for the first eight months.

Sales by Saab, a European subsidiary of General Motors with a 1995-1999 Reliability Percentrank average of .50, are down 22% for the first eight months of this year, but sales by Volvo, a European subsidiary of Ford with a 1995-1999 Reliability Percentrank average of .35, are up 3% for the first eight months. In the late 1980s and early 1990s, Volvo had high Reliability Percentrank averages; from these it may still be benefiting. Reputations usually endure well beyond reality.

In the niche markets, Porsche August sales rose 22%, BMW sales rose 15%, and Mercedes-Benz sales rose 11%. The rotation out of Mercedes' U.S. made M-Class SUV, with its abysmal 1998-2000 Reliability Percentranks of .03, .15, and .02, slowed some; sales fell 7%. For the year, M-Class sales are down 14%.

Note: Big Three sales and market shares do not include sales of European lines - Mercedes-Benz, Saab, Volvo, Jaguar, and Land Rover.

Source for August 2004 auto manufacturer sales data: Wall Street Journal, September 2, 2004, page A14, "Automobile Sales Statistics." As now seems usual, the August 2004 daily selling rate percentage changes given in the Journal were not corrected for the increased number of selling days in August 2004, despite a statement to the contrary.

Source for detailed Toyota sales data: "Toyota Reports August Sales," September 1, 2004, at http://pressroom.toyota.com/photo_library/display_release.html?id=20040901a

Source for Reliability Percentranks and Percentrank averages: AOI's Table I-MVRP

Source for July 2004's Hottest Ten: "Hot Off the Lot," Wall Street Journal, August 11, 2004, p. D4

Sources for Consumer Reports Quick Picks: Consumer Reports, February 2004, p. 49 and Consumer Reports, May 2004, p. 53, Consumer Reports, August 2004, p. 51

Source for CR Top Picks: Consumer Reports, April 2004, p. 9

¹ "Toyota Announces 50-Percent Boost in 2005 Prius Hybrid Production To Meet Unprecedented Demand," at http://pressroom.toyota.com/photo_library/display_print.html?id=20040803b