General Motors deliveries are down 42.5%. Toyota posted a 37% sales decline. Ford reported a drop by 38.1%. Yet, executives remain optimistic.
With figures like these, it is hard to believe that manufacturers are finding optimism. GM had total deliveries of 155,380 in March, down 44.7% from a year ago, but cited a 23% increase in deliveries from February.
In an open call with journalists reported by Ward's Auto, GM Vice President of Sales Mark LaNeve remarked optimistically that "the market is beginning to show some signs of life." Even more surprising was LaNeve’s estimate of annual sales of slightly more than 10 million units (seasonally adjusted).
GM’s focus to keep consumers in their vehicles rather than allowing returns to dealerships has also helped to boost confidence in the company. Considering that GM’s lending arm has relaxed new finance terms to 620 points, this optimism is well-founded, especially when taking into account the decision made six months ago to not extend finance terms to anyone with scores under 700.
Similarly, Toyota’s sales numbers are still down, but have improved since February. Bob Carter, general manger Toyota division, commented on the situation and expects that the worst is behind the auto industry.
“Perhaps that’s a very early indication we have floored and there’s some optimism returning to the market,” he tells Ward's Auto.
The proof lies in the Toyota-specific division, which delivered 18% more vehicles in March.
Finally, Ford’s new products are helping the manufacturer to regain market share in an industry it feels is beginning to show signs of life again. The company commented on the situation, saying that the smaller decrease in retail volume, which was 36%, should equal a retail market share in the realm of almost 14%. This would mark the fifth straight month in which Ford penetration has exceeded 13%.
Jim Farley, vice president of sales and communications, also highlighted the enthusiasm in an interview with Ward’s.
“That’s very encouraging for our team, considering our incentive levels," Farley said.
Ford has been able to refrain from increasing its incentive programs, while its competitors have increased incentives an average of $500 per vehicle. Although Ford has instituted a new program that will mimic GM’s Total Confidence program, Farley said that the cost to the automaker would be minimal, perhaps $200 per vehicle.
Sales in March showed signs of a resurgent market. Compact vehicles had a 27.18% growth over February sales.
SEMA-member companies can first start by providing appropriate parts to help consumers accessorize and personalize the vehicles that are selling well. According to J.D. Power, compact-vehicle sales grew 27.18% in March over the previous month. This segment has been the benefactor of economic conditions as consumers uneasy with the current economy have opted for smaller, efficient and affordable vehicles as replacements. — SEMA Research & Information Center