Crunching The Numbers: Is 2008 Going To Be The Year Of The Underdog?

When the average person compares companies like Toyota to the Detroit Big 3 some the defining attributes that come to mind are dependability, resale and quality.  I think most anyone can agree these are things at least that Toyota and other have generally done well in these areas and this should always give them the edge in sales.  Toyota in general is well known for analyzing the Big 3’s marketing successes and targeting them where it counts in each category.   Just take a look at sales over the last decade and I believe it will prove to even the skeptic that Toyota is a worthy adversary for the Big 3 in every way.

 But has is it working for Toyota or is there a critical flaw in the strategy? Have they emulated the Big 3 too well?  Let’s take a look a look at the sales figures for the Toyota, the Big 3 this year.  In order to be fair and compare apples to apple we will strip out Cadillac, Lincoln, Ford’s Premium Auto Group, and Lexus from the totals.

  
 As we can see it is a pretty ugly picture for the year.  The Detroit brands are all poorly positioned in the market place and suffer accordingly.  Toyota is down a bit over 3.5% on the year and they chalk it up to buyers simply not in the market place. However only losing 3.5% in this market may be considered pretty darn good.  Specializing in hybrids hasn’t hurt Toyota in any respect here.

 Will Cloning a Proven Leader Work?

 If you look at the market, Hyundai has been following the playbook that Toyota wrote 20 years almost play by play.  In doing so, they have seen a dramatic shift in public perception and have made significant gains in the market place share.  Their lineup in many ways mirrors that of Toyota, trying to capture some of this leader’s glory. So how have they faired in 2008 so far?

 Let’s take a look:

Wow! amazingly close to Toyota’s performance percentage wise, not horrible in the overall perspective but still not the best.  But how are they doing this without the hybrid advantage?

 Is Different Better?

 Now we come to the brands that beat to a different drummer.  While many of these share similar models to our previously mentioned makers, they are arguably market to the buyer that refuses to be generic.  Now if you remember, Toyota and others are claiming that the buyers simply aren’t flocking into the showrooms, so sales are down.  But is this true across the board as we have been led to believe?   You tell me?

Now by looking at these figures there are obviously buyers out there. But they for some reason aren’t choosing their purchases from the mainline makers stock pile of wares.  Why?  Is it due to their core demographic, refuses to fit in with the mainstream?  Or do these makers simply know something the others don’t?  It might even be argued that these 6 makers may simply offer cars that are more fun to drive, or make a statement.  Anyway you look at it, these guys, aren’t complaining about showroom traffic. They are profiting from their superior positioning.

How About The Luxury Market?

In a bad economy, many cut back on the luxury items, so you would think that the losses would be severe. This may ring true especially for the brands that lack the clout of the leaders. But is this true?

I guess you could pretty easily predict Land Rovers predicament.  As with Lincoln, gas guzzlers aren’t really the rage right now.  Acura and Volvo are simply missing the target; however Acura is showing signs of progress with the latest crossover releases. Now I would have expected Lexus to be stronger here with a full line of hybrids, however this positioning has failed to bear fruit for the brand.  Why? Actually they have lost the most sales of anyone in shear numbers. Cadillac and BMW obviously are hurting a bit, but I see both of these brands picking up steam by the end of the year the new CTS and BMWs upcoming releases will all have time to come into play. Audi, Infiniti, and Jaguar are all in flux with slightly depressed sales, however all of these brands should accelerate forward with either a plethora of releases slated, or new models picking up steam.  Who would of thought Audi could have come this far, this fast?

Now with all of this bad news, just how did Mercedes Benz actually show an increase?  The all new C-Class played a large part of this in overall sales.  But I suspect that real key here is the fact that Mercedes core client is simply less prone to economic bumps in the road.  After all, they say, “old money” tends to ride the tide in style far better than “new money”. 

So take a look and tell me what you see in these figures, and why. 

Have the mainline makers lost a critical edge?

Are we on a cusp of a change, and the smaller makers have simply positioned themselves better?

What if gasoline moves to $6.00 a gallon?

Have fun!

silver1 - 6/5/2008 11:56:42 AM

+3 Boost

Toyota & Honda will rule the market.....Gas is why.....Corolla & Civic. Good reliable cars, cheap parts if they ever break down. And Lexus will also when it releases it's Luxury Hybrid Prius.

Shredmo - 6/5/2008 12:07:24 PM

+4 Boost

Regarding, "Is different better?", since when are Honda & Nissan considered "different"?

Mini, Subaru, Mazda & VW sell at lower volumes, therefore are less common, or "different", I suppose.

When driving my Subaru, occasionally other Subaru drivers will wave, or nod when they see my Subaru, similar to what you see Jeep drivers, or Motorcycle riders doing on the road. It sort of makes you feel a part of a club ;)

Agent009 - 6/5/2008 12:40:44 PM

+2 Boost

Both are edgy compared to Detroit and even Hyundai and Toyota

Shredmo - 6/5/2008 12:50:16 PM

+1 Boost

I definately agree with that, but under dog may be a bit of a stretch.

silver1 - 6/5/2008 12:20:53 PM

-6 Boost

People are going to be more cost conservative now because of gas, and will start to look at the total cost of ownership: free oil changes, maintenance, how much is it going to cost if something breaks down, how long is the part going to last, etc...

Is it cool to be seen driven in a Ford Focus despite it's mpg?

Is it cool to be seen driving in a Mini Cooper when it starts too look like it's 30 yrs old when it only has 5,000 miles on it, and you call out for work wasting your time in the service department getting it fix although it was covered under warranty, despite it's MPG and being cool to get to drive around in a Low Class BMW German car?

Is it cool to be seen driving in a Land Rover despite that you haven't had a raise in years in your job is not stable and you are not saving any money because your paying the high price in fuel cost?

Is it cool to be seen in a Honda Civic or Toyota Corolla thats it's a reliable car, gets good gas, saves you lots of money during total cost of ownership, despite thats it's a Honda or Toyota people will judge you that your just a low-middle class person that can't afford a Mercedes but you actually can?

I feel that the richer is getting richer and the poorer is getting poorer. It happens when a republic gets into office. So I feel that Luxury cars like Bentley, Lambo, Rolls Royce, Bugatti, should all see an increase, because if you can afford these cars gas shouldn't be an issue with you.

Lexus, BMW, Mercedes, on the other hand, we should see a decrease in cars thats $80,000 and under and also and increase in cars thats $80,000 and up because if you can afford a Lexus LS 600h or a S-Class 600 gas shouldn't be an issue with you..

Now, If Obama were to win office, we should see things go back on track like Camry, Accord, Maxima, TL, E-Class, 5-Series, all sales will sky rocket.

Now if John McCainBush were to win office, we should see Corolla, Civic, Lambo, Bugatti, Rolls Royce sales will sky rocket...

M35MT - 6/5/2008 12:25:20 PM

+4 Boost

Those with lower numbers a taking a big hit on SUV sales. It's obvious.

Also, where is your relationship to the benchmark, or, the market as a whole? I imagine its somewhere close to where Toyota is, -3-5%.

Agent009 - 6/5/2008 12:46:18 PM

+3 Boost

There is no benchmark other than last year.

However it is important to note that Toyota is doing OK compared to the overall market. However the main point is to show the strength of brands outside the mainstream and how they are unaffected by the downturn,

Are the factors due to the buyers in the market that are obviously buying, are they looking for something else? Whether it be uniqueness, style, or even sex appeal?

M35MT - 6/5/2008 1:52:06 PM

+5 Boost

I dont believe it has much to do with people choosing the other brands over the more mainstream brands more so than usual.

It's the fact that the mainstream brands are more succeptible to trends because they represent the largest share of the market.

Someone who buys a Camry, is the typical buyer that sees it as a 'car', not a toy. They buy it because they need it, not because they WANT it.

thetruth01 - 6/5/2008 2:28:13 PM

+5 Boost

Funny how the cars buyers are choosing to buy from the mainstream brands are the mainstream cars. Toyota is down, but Camry is up. Ford is down, but Escape and Focus are up. And Honda is way up because almost their entire lineup is mainstream-Accord, Civic, CR-V.

M3M5T seems to be making a salient point here. Brands with large numbers of trucks and SUVs are down because those vehicles are dragging the rest of the line down, period, mainstream or not. There's no magic shift in buying trends toward more unique brands. I know that is not very interesting or glamorous, but it is a much more realistic appraisal of the situation.

cdoke - 6/5/2008 12:35:49 PM

0 Boost

Jaguar's CYTD number will be positive next month. In fact if the current trends continue then the number will be between approximately 3.5% and 3.9%

Agent009 - 6/5/2008 12:46:48 PM

+2 Boost

I agree

thetruth01 - 6/5/2008 2:20:50 PM

+4 Boost

"how did Mercedes Benz actually show an increase? The all new C-Class played a large part of this in overall sales. But I suspect that real key here is the fact that Mercedes core client is simply less prone to economic bumps in the road."

A brief moment of clarity by Agent009, interrupted by the expected German fanboyism.

The C-Class 2008 YTD is 31385 vs 2007 YTD 22552, an increase of 8833 units.

Therefore MBZ's positive sales increase this year is WHOLLY attributable to ONE CAR, the C-Class.

Almost every other MBZ vehicle is down, many by double digits. (E down 15%, S down 24%) Had the C been selling at just the same rate as last year, MBZ would be down 7781 units, or down 6.8%, right in line with everyone else. Had the C been faltering at a rate consistent with the rest of MBZ's drop, you'd be looking at MBZ down 9.4% (assuming the C drops at 6.8%, as the rest of the line is averaging.)

So MBZ, outside of the C, is doing quite poorly, old money notwithstanding.

You almost got your analysis right on this one. You were leaning in the right direction. But you just couldnt accept the numbers staring right out at you, because they flew in the face of your strongly held convictions. Thats a real shame.

ChicaneShooter - 6/6/2008 7:39:41 AM

+1 Boost

good points, truth.

imho, the ONLY reason toyota has dropped is due to many large SUVs in their lineup, AND THE TUNDRA.

what do ALL FOUR companies in your first chart have in common? a v8 pickup.

what do ALL THE OTHER companies in all the other charts have in common? LACK of a v8 pickup.

ChicaneShooter - 6/7/2008 6:35:18 AM

+1 Boost

aside from frequent towing, v8 pickups are totally UNnecessary.

tacomas and frontiers with just FOUR bangers (to say nothing of v6s), are fully capable of doing 90+% of anything full size v8s can do. burning about ONLY HALF as much gas!

the box sizes may not haul as many bales of hay or other low density cargo. but they are LOAD RATED for a FULL HALF TON. even 3/4 tons.

VISO - 6/5/2008 2:42:00 PM

+2 Boost

Why wouldn't Audi have come this far, this fast? A typical anti-Audi bias comment. They've been around for over a 100 years, so they know a thing or two about automobiles. Stupid comment as usual

NItePhire - 6/5/2008 3:14:57 PM

+1 Boost

I like the article a lot however I must disagree with one point. Honda is not different in the way that you are presenting. They aren't that small or unique at all. Due to the fact that they have two cars in the top five sold this year and that in the "Different" category that you have only Nissan has one car in the top 15 in sales. Also Mini is completely owned by BMW and doesnt sell in any large numbers compared to the rest of the list and like Scion should be included in their totals. I do understand why you didn't add the other outlet brands though. I read in about three separate articles about three years ago that Honda deliberately does not grow to control quality and demand. They (Honda) CEO's state that this was their plan all along. I even read one article (cant remember where or when) that the CEO's from Toyota stated that Honda wasn't even one of their competitors and that Honda would continue to do what they do very well. As a matter of fact come to think about it Toyota said they were more afraid of Hyundai than anybody due to their recent learning curve.

Star - 6/5/2008 3:52:07 PM

-1 Boost

Anything with good mileage ratings will sell no matter how bad the quality is. The Civic is a good example.

ChicaneShooter - 6/7/2008 7:14:02 AM

+1 Boost

anything that silly chevy shills flog will sell, even if the mileage ratings are CRAPPY (aveo).