Auto on Info  December 2004

In the U.S. in November 2004, Nissan's Sales Soar, Toyota's Advance, GM's Plunge

Nissan, with a 1996-2000 Reliability Percentrank average of .74, increased its U.S. auto sales by 31% in November 2004, over those of November 2003. Its U.S. car sales rose 10.0% and its U.S. truck - SUV, minivan, and pickup - sales rose 58.7%. Nissan's U.S. sales for the first eleven months of 2004 are up 23%.

Toyota, with a 1996-2000 RPA of .90, saw its U.S. auto sales rise by 9% in November 2004. Its U.S. car sale rose 19.1% but its U.S. truck sales fell 1.4%. Toyota's U.S. sales for the first eleven months of 2004 are up 9%.

For November 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 1996-2000 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: November 2004 Toyota Sales, Percentage Changes, and 1996-2000 Reliability Percentrank Averages, by Line, Type, and Model
Manufacturer	Division	Type of Vehicle	Model	Sales Volume	Percentage Change for November 2004 from November 2003	1996-2000 Reliability Percentrank Average
Toyota Motor Corporation				154,272	8.8%	.90
	Scion Division			9,151	395.7%	N/A
			xA	1,879	174.9%	N/A
			xB	3,736	221.3%	N/A
			tC	3.536	N/A	N/A
	Toyota Division			122,263	3.8%	.89
		Passenger Car		64,283	10.6%	N/A
			Camry	30,747	9.3%	.87
			Corolla	24,709	24.0%	.93
			Prius*	5,866	9.4%	N/A
		Light Truck		57,980	-2.8%	N/A
			Sienna (minivan)	10,968	-14.9%	.80
			Highlander (SUV)	9,692	20.6%	N/A
			4Runner (SUV)	7,608	-10.0%	.94
			Land Cruiser (SUV)	564	-2.6%	.88
			Tundra (pickup truck)	8,689	3.1%	.871
			Tacoma (pickup truck)	11,156	1.1%	.93
	Lexus Division			22,858	3.1%	.92
		Passenger Car		10,214	-0.2%	N/A
			ES330	5,919	7.5%	.932
			LS430*	2,529	6.5%	.952
			SC 430 (hardtop convertible)	686	4.6%	N/A
		Light Truck		12,644	5.8%	N/A
			RX 330* (SUV)	8,461	4.6%	.881,2
			GX 470 (SUV)	3,200	8.8%	N/A
			LX 470	983	6.7%	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. August 2004's, September 2004's, and October 2004's Hottest Ten were unavailable.
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 November 2004 over November 2003 are the Scion xB, up 221.3%, the Scion xA, up 174.9%, the Toyota Corolla, up 24.0%, and the Toyota Highlander SUV, up 20.6%. Sales of the Lexus LX 470 for the first eleven months of 2004 exceed those of the Toyota Land Cruiser, a more Spartan cousin, by 41.5%.

Toyota's Scion line, up 395.7%, 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 Corolla, up 24.0%, is an internationally renowned 38-year legend of reliability, durability, and pleasing performance and appearance. As a buyer from Africa at Dubai's mid-eastern auto mart Ducamz put it: Everyone wants one. Indeed, life may not be complete without having owned a Corolla, and life may be appreciably less interesting without having owned the same one for 20 years.

Mazda, with a 1996-2000 RPA of .72, saw its November 2004 U.S. auto sales fall 5%. Mazda's U.S. sales for the first eleven months of 2004 are up 3%.

Honda, with a 1996-2000 RPA of .86, saw its November 2004 U.S. auto sales rise 3%. Honda's U.S. sales for the first eleven months of 2004 are up 1%. Honda Motor Company's models showing the largest sales gains in November 2004 over November 2003 are the Acura RL (1996-2000 RPA of .90), up 358.5%, the Honda Odyssey (1996-2000 RPA of .87), up 22.1%, and the Honda Pilot (too recent to have a 1996-2000 RPA, but a CR 2004 Top Pick), up 19.1%. In November 2004, the Honda Odyssey outsold the Toyota Sienna by 1,286 vehicles, although for the first eleven months of 2004 the Sienna outsold the Odyssey by 8,145 vehicles or 5.9%.

Subaru's November 2004 U.S. auto sales rose 10% and year-to-date sales have fallen 2%.

In summary, the November 2004 sales by the auto manufacturers of quality products were good; sales by Nissan, Subaru, Toyota, and Honda rose 31%, 10%, 9%, and 3%, respectively. Excellent are the first eleven-month sales of Toyota and Nissan, up 9% and 23%, respectively.

At the other end of the quality spectrum, November 2004 sales by General Motors, with a 1996-2000 RPA of .29, fell 13%. GM's year-to-date U.S. sales are down only 1%, although in recent months its inventories have grown to be huge.

Analysts predict a fire sale by GM at the very end of December in an attempt to reduce its rather gargantuan inventories. It will likely be akin to its late September 2004 fire sale, one extending for a very short period but backed by hefty advertising. The objective, analysts say, is to create a sense of urgency among buyers. This gives consumers little time for thought, a big plus and important tool given GM's quality history. Nonetheless, an important question is whether a fire sale will work as well a second time. November sales suggest significant consumer discontent with the sufficiency of GM's discount ploys.

Chrysler, with a 1996-2000 RPA of .33,  saw its November 2004 U.S. auto sales rise 9%. Chrysler's U.S. sales for the first eleven months of 2004 are up 3%. One arguable explanation for Chrysler's success of late is that Chrysler has taken a Big Three novelty-by-grotesqueness strategy to an extreme and given it a well conceived selectivity of application.

Ford, with a 1996-2000 RPA of .50, saw its November 2004 U.S. auto sales fall 4%. Ford's U.S. sales for the first eleven months of 2004 are down 5%.

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

In the Hyundai vs. General Motors war, Hyundai, with a 1996-2000 RPA of .31, trounced GM in November with a 12% increase in U.S. auto sales. Hyundai's eleven-month sales are up 4%, just a tad short of giving it a .03 U.S. market share. So, to win the race to natural market share, most likely GM must do much worse.

Kia, too new in the U.S. to have a 1996-2000 RPA, was the star of the month with a 50% increase in U.S. auto sales. Its year-to-date sales are up 14% to 249,947, exceeding Subaru's year-to-date sales by 48.7%. Kia is a subsidiary of Hyundai Motor Company Limited and also has a .02 U.S. market share.

U.S. auto sales by Saab, a European subsidiary of General Motors with a 1996-2000 RPA of .50, are down 22% for the first eleven months of this year, but sales by Volvo, a European subsidiary of Ford with a 1996-2000 RPA of .29, are up 3% for the first eleven months. In the late 1980s and early 1990s, Volvo had high Reliability Percentrank averages; from these it may still be benefiting.

In the niche markets, Porsche November sales fell 1%, BMW sales were unchanged, and Mercedes-Benz sales rose 8%. Sales of Mercedes' U.S. made M-Class SUV, with its abysmal 1998-2001 Reliability Percentranks of .01, .15, .01, and 0.00, plunged 20.6%.

A look back on 2004 reveals a remarkable phenomenon - a big consumer shift toward the quality products of Toyota and Nissan and an abandonment of the products of two of the Big Three. As this shift and abandonment took place at a time when the Big Three offered huge discounts and several new models, even seasoned auto analysts were short on prediction. And with a quality gap between Toyota and the Big Three that is more than a quarter of a century old, no explanation is readily available.

With a look to 2005, some things seem safely said. Firstly, General Motors may shed 2 percentage points of U.S. market share in 2005 without significantly jeopardizing its existence, but a loss of 3 percentage points likely means that it will be out of business by 2012. Secondly, novelty may have carried Chrysler unscathed through 2004, but its historical mediocre-to-poor reliability should begin to take hold in 2005. Thirdly, China's consumption of steel and the consequent regional steel shortage should slow car production in Japan by several of Japan's auto manufacturers. In particular, reduced output in Japan should help to moderate Nissan's U.S. sales growth.

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

Source for November 2004 auto manufacturer sales data: Wall Street Journal, December 2, 2004, page C4, "Automobile Sales Statistics," and "November 2004 U.S. Auto Sales," the Associated Press, available at Yahoo! News. The latter has the correct daily selling rate percentage changes.

Source for detailed Toyota sales data: "Toyota Reports Record November Sales," December 1, 2004, at http://pressroom.toyota.com/photo_library/display_release.html?id=20041201

Source for Honda sales data: "American Honda Announces November Sales Results," December 1, 2004, available via http://automobiles.honda.com/info/news/landing.asp?bhcp=1&BrowserDetected=True

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, Consumer Reports, December 2004, p. 59

Source for CR Top Picks: Consumer Reports, April 2004, pp. 8,9

Correction: AOI initially reported that November 2004 sales by Mercedes-Benz fell 8%, but they in fact rose 8%. This error was corrected December 8, 2004.