Auto companies have recently reported sales figures for the month of December and full-year 2009. For nearly all, the numbers are better. The numbers are also not particularly good.
Ford Motor Co. (F) posted a nice 33.5% increase for the month compared with December 2008. Toyota (TM) and Honda (HMC) also posted monthly gains of 32.3% and 24.5% respectively. General Motors and Chrysler posted monthly declines of 5.7% and 3.7% respectively.
Gear Up for Big Profits in These Auto Stocks
Annualized numbers demonstrate the overall weakness of the industry in 2009. Total light-vehicle sales in 2009 fell 21.2% compared with total 2008 sales.
Many observers think the good numbers for December mark the beginning of a modest recovery for the industry. That will only prove to be true if job losses continue to decline and consumers begin to feel confident in spending once more.
But even an overall improvement in the economy may come too late for GM and Chrysler. In 2009, for the first time in 47 years, Chrysler failed to sell 1 million cars. The company has just introduced new sales incentives in loan rates and rebates in an effort to lure more buyers into dealer showrooms.
The story at GM could be worse and, in fact, probably is. Excluding fleet sales, Toyota is likely to have sold more light vehicles in 2009 than GM.
Chrysler appears to be on life support. The company’s market share continues to fall, even with incentives. As Chrysler sells fewer cars for less margin, the end is inevitable.
GM is somewhat stronger if for no other reason than it still leads in market share. But excluding fleet sales, which typically produce less revenue than retail sales, GM will certainly fall to No. 2 in U.S. sales to Toyota in 2010. The company’s sales in China and India, though strong and even improving, will probably not be enough to pull it through.
A strong, lasting recovery in the U.S. economy is about the only thing that will give GM a long-term future. Even that is unlikely to save Chrysler.
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