The Good The Bad And the Ugly - Who Will Rise And Who Will Fall In 2008?

Unless you have been hiding under a rock for the last 6 months, you know by now that 2008 has been brutal for the automakers.  In the first half of the year only 7 manufacturers can show any progress against last years sales pace.  In fact only 1 in the top five in sales volume for 2008 have beaten the sales figures for last year.  The remaining 4 are posting double digit declines for June, and 3 of these are in double digit declines for the year as well.

Chaos is seeming to prevail, because is now common for brands perceived as  benchmarks, being routinely out performed by what were laughingly considered the 98lb weaklings of the class.  

Case in point may be either KIA or Mazda’s performance over the first six months in contrast to mega giant Toyota.   Both of these manufacturers are up for the year while Toyota is in decline.  Who would have ever thought that?  

We won’t even touch on the U.S. automakers many weaknesses; however, it is safe to say the decline of the SUV in its current state is over. Even though the automakers could have easily seen the fall of this dinosaur, many of the executive failed to take action. Those without the foresight are now paying the price. 

The luxury market for one is now in shambles, currently only Rolls Royce and Mercedes Benz have posted positive gains on the year.  Maybe more alarming would be the disturbing slide of Lexus into the abyss.  I mentioned this a few months back and predicted the trend would continue for Lexus until complete new models would be brought to market.  Those that failed to believe me at that time may now fully see the truth. Lexus fell almost 30% last month based on unadjusted figures.  In contrast the perpetual underdog Audi with a relatively fresh lineup posted a 5.3% increase for the same period.  Talk about the 98 pound weakling!  

If you look at the table below you will see two parallel trends emerging.  Path one and probably the most important for now is just how balanced the manufacturer is with economical vehicles.  Path number two is maybe how fresh the lineup is.  Basically if you were heavy into SUVs or were milking the last bit cash out of an older lineup, you were caught with your pants down.  

How will 2008 finally pan out?  I not sure at this time, however I see GM starting to level off in 2008, Ford for me is an unknown, however Chrysler seems to be at a point of no return.  With no new models planned and no money to develop them, they will have to rely on rebadging other maker’s wares.  I can easily seeing them losing 50% of their sales with this philosophy.  We might as well roll out the gurney for Chrysler, because it is already over. 

Will Toyota survive?  Certainly so, however 2008 will not be kind to them. A lack of new models will not drawn the ever reluctant buyers into the showroom. Lexus is an odd ball in this scenario; it certainly is looking like the “reliability” factor is no longer coming into play.  Maybe the consumers are becoming more aware that this perception is based on more on factors other than actual breakdowns.  Either way Lexus must have new models in the pipeline soon or their performance will remain dismal for the remainder of the year.  The competition simply has too many new models coming to market to slice away what were once Lexus customers. 

Now it is your turn to take a look at the brutal truth below and make your predictions for the rest of the year.  I know you all have them, I'll take my notes and we can all compare in three months and then again in six more.