DETROIT (AdAge.com) -- For the auto industry, 2005 was a roller-coaster year marked by generous incentives, wild swings in monthly vehicle sales, the decline of traditional truck-based sport utilities and a comeback for cars.
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As automakers report December monthly and calendar 2005 new-vehicle sales today, Asian transplants saw sales increases while Detroit continued to struggle. Toyota Motor Corp. was the biggest winner so far.
Toyota up 10%
Showing declines in 2005 compared to calendar 2004 were: General Motors Corp. (down 4%); Ford Motor Co. (down 5%); and Volkswagen of America's VW brand (down 12.5%). Reporting annual increases were: Toyota Motor Sales USA (up 10%); Nissan North America (up 9.6%); American Honda Motor Co. (up 5.2%) and VW sibling Audi of America, which sold 83,066 units vs. 77,917 in 2004.
DaimlerChrysler, BMW, Hyundai and Kia haven't yet reported.
A highlight was Toyota's Lexus brand, notching its sixth consecutive year as the nation's luxury best-seller. Lexus said it set a new annual sales record in 2005, with 302,895 vehicles sold, a 5.5% jump over 2004. The Toyota division's Camry was the country's best-selling car for the fourth-straight year, with 431,703 units sold, up 1.4%. Toyota said 2005 marked the second time it has sold more than 2 million new vehicles in its 48-year history here.
"Finally shaking off its autumn chill, the industry enjoyed a bit of holiday cheer as buyers returned to showrooms," said Jim Press, president-chief operating officer of Toyota Motor Sales USA. "Solid calendar-year results vouch for the industry's fundamental health and bode well for the coming year."
SUV slide to continue
Once red hot, sales of traditional truck-based sport utility vehicles in the U.S., like the Ford Explorer, will keep sliding through the end of the decade, George Pipas, U.S. sales analysis expert at Ford Motor Co., predicted today. His comments came in a conference call with analysts and media regarding Ford's December monthly and calendar 2005 new-vehicle sales results.
Mr. Pipas said the automaker's Ford, Lincoln and Mercury brands took the industry's biggest hit in traditional SUV sales, falling 29% last year vs. 2004 while the industry as a whole saw sales in the segment drop by 14% through November. The industry's sales in that segment peaked in 2002 at 3 million units and then experienced three straight years of decline, he said.
Ford Motor reported its total U.S. sales in December slid by 9% compared with the same month a year ago. Although its calendar 2005 sales of all new vehicles slid 5% to 3.17 million, the news was brighter in the car segment. The automaker said it sold 1.04 million cars, marking its first increase in car sales since 1999.
"We feel like we're positioned to take advantage of what appears to be a growing demand for passenger cars," Mr. Pipas said. The automaker's most recent car entries, the Ford Fusion, Mercury Milan and Lincoln Zephyr, tallied combined December sales of 11,808 units, 33% higher than November. Ford executives had called 2005 "the year of the car" because of a slew of several crucial new-model launches.
Cars over light trucks
Merrill Lynch said 2005 marked the first time since 1981 that cars regained market share over light trucks, which encompass pickups, sport utilities and minivans. The shift was most prominent in the last four months of the year in the wake of Hurricane Katrina and the $3-plus-a-gallon price of gasoline.
Detroit, which relies heavily on trucks, could suffer accelerated market share losses if this car trend continues, noted John Murphy, auto analyst at Merrill Lynch.
Crossovers -- car-based SUVs or wagons like the Ford Escape -- will be the hottest segment in the industry between now and the end of the decade, Mr. Pipas predicted. The entire industry sold 14% more crossovers, or CUVs, through November 2005 than a year ago, with Ford, Lincoln and Mercury sales in the segment up by 39%, he said.
$3.5 billion in December incentives
In December, the industry spent $3.5 billion on U.S. incentives, with Detroit's GM, Ford and Chrysler Group accounting for $2.7 billion of that, said auto site Edmunds.com. By contrast, Japanese transplants spent $496 million in incentives last month, while the Europeans spent $200 million and Korean marketers $92 million. As a whole, the industry spent $42.6 billion in 2005 incentive spending, or $1.2 billion less than 2004, according to Edmunds.com.