U.S. October sales results from the Japanese Big Three continue to diverge based on the status of inventories after the Japan earthquake and resulting production issues, as well as the incentive levels deployed in the waning months of the year. Overall, the U.S. auto market grew 7.5% year-over-year in October, as it slowly returns to pre-Great Recession levels, with only Nissan outpacing this rate of growth, helped with the highest incentive levels among the Japanese Three full line automakers. Total U.S.industry volume declined from September, an ominous sign, as the jobless recovery of the U.S. economy continues with 25 million potential taxpayers under-employed or unemployed.
The market leader Toyota Motor continues to suffer from the aftershocks of the tragic March earthquake, but it is now slowly rebuilding inventories and its dealers are showing they can sell “just in time.” On a volume basis, sales of Toyota, Scion and Lexus brand vehicles declined 7.8% from the year-ago month.
Nevertheless, Toyota, or TMS as its U.S. umbrella sales company is called, remains a serious contender as demonstrated by its return to the Number Three U.S. sales spot as TMs raced past the previous usurper Chrysler Group by 20,000 vehicles. Chrysler had clawed its way back into the Number Three spot post-earthquake when Toyota was without a good selection of vehicles, and even though Chrysler Group had its best sales month in four years it was unable to hold the position.
While traditional “Toyotathon” advertising will begin closer to Thanksgiving as it has for 32 years, the low interest rates and special lease programs that comprise it are now available starting today for many 2011 and 2012 models, according to Bob Carter, Group Vice President and General Manager of the Toyota Division who is also in charge of TMS. Lexus, too, is starting aggressive subsidized lease and low interest rates today.
Acura, Honda’s luxury label, posted sales of 11,115, an increase of 4.8% versus October 2010, with year-to-date sales of 100,261, compared to Infiniti’s 79,000. This means that natural-disaster battered Lexus with ytd sales of 153,739 of cars and light trucks – virtually all of which are made in Japan – will easily retain the Japanese luxury vehicle sales crown for the U.S. in 2011. However, Lexus will be displaced from luxury sales leadership for the first time in more than a decade by BMW and Mercedes-Benz, in that order.
Nissan North America – NNA – reported October U.S. sales of 82,346 units versus 69,773 units a year earlier, a healthy increase of 18%. Nissan Division sales also set a new October record, increasing 22% for the month to 75,484 units. Sales of Infiniti vehicles decreased 13.5 percent from the prior year, to 6,862 units, and look meager compared to Lexus at more than 10,000 units.
American Honda posted October sales of 98,333 vehicles, an increase of 3%. Total Honda and Acura year-to-date sales reached 958,130, down 5.3%. Honda Division posted October sales of 87,218, an increase of 3.2% versus October 2010. Like Toyota, Honda Dealers are selling or “turning” vehicles on their lots after 30 days far faster than the industry average rate of roughly 50 days.
“As dealer inventories continued to replenish in October, we saw increased momentum over last month’s sales,” said John Mendel, American Honda executive vice president of sales. “We look forward to continued strong demand for our products despite these continuing challenging times due to the flooding in Thailand and ensuing production limitations.”
AutoInformed translation: more inventory troubles and sales problems remain ahead for Honda, and even though Toyota is downplaying the issue, it faces them too. Nissan, with its heavily U.S. and Mexico sourced components, maintains that Thailand flooding is not an issue. But as production executives well know, it takes but one piece to wreak havoc with output rates. We’ll see.
Incentive levels among the Japanese Three remain well below those deployed by General Motors and Ford and Chrysler. The overall industry average is a whopping $2,158 per vehicle, with the Detroit Three all higher $2,700-$3,000, according to Edmunds.com. Nissan leads the Japanese at $2,355 Toyota $1,602 Honda $1,260.
