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William Maley

Sales: By the Numbers - January 2017

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Author's Note: Welcome the to first 'by the numbers' where we take a deeper look at sales numbers and give some perspective on them. Whether it is considering the weather affecting sales to understanding why midsize sedans are falling down, this is the place to see it a new light.

January is never a good month when it comes to car sales. Coming from the spending and holidays of December, people are hesitant to spend money on expensive items. This was reflected in January sales with a 1.9 percent drop.

“Coming off a record December and year in 2016, the industry in January took a bit of a pause with volume down slightly vs. a year ago,” said Bill Fay, group vice president and general manager of the Toyota division in a statement.

Midsize sedan sales are getting clobbered

January marked the tenth month of year-over-year decline in midsize sedan sales. As Tim Cain from The Truth About Cars notes , the class saw a 21 percent decline for the month. This is concerning considering passenger car sales only dropped 13 percent. The big losers for the month were the Hyundai Sonata (down 48.1 percent), Chevrolet Malibu (down 43.2 percent), and Toyota Camry (down 24.3 percent). A lot of this can be attributed to the rise of crossovers and SUVs. Data from Wards Auto shows sales of crossovers rose 9.4 percent and sales of SUVs up 12.6 percent for the month.

Only two nameplates in the midsize sedan class actually saw sales go up - Mazda6 (up 28.3 percent) and Volkswagen Passat (up 64.2 percent). We need to put these numbers into perspective. This time last year, Volkswagen was still embroiled in the diesel emission scandal which caused all of Volkswagen's nameplates to dive downward. As for the Mazda6, that 28.3 percent increase only represents 728 additional models sold (3,300 in Jan 2017 vs, 2,572 in Jan 2016).

What happened Toyota?

January wasn't a pleasant month for Toyota and Lexus dealers. The company reported an 11.3 percent decrease in overall sales. Over at Lexus, they saw sales plummet 25.6 percent. What happened? As we mentioned above, the Camry saw a big drop in January sales. Not helping was Toyota's truck lineup posting a 4.1 percent drop and the Sienna seeing sales drop 33.7 percent. Over at Lexus, their entire passenger car line saw a 40.6 percent decline. SUVs and crossovers did slightly better with a 15 percent drop. Lexus general manager Jeff Bracken admits that December's big sales left dealers with a limited stock of their utility vehicles for January, which explains the sales decrease.

Nissan's Crossover & Incentive Play

Nissan had a record January with 100,761 vehicles leaving dealers. More than half of those sales came from their truck and utility line - 53,313 models. Out of that, 28,760 units came from Rogue crossover (up 46 percent). But January also saw Nissan increase incentives. According to ALG (via Automotive News (Subscription Required)), Nissan raised incentives 24 percent to an average of $4,335 when compared to last January.

Other notes from the month:

  • Chevrolet Camaro, Dodge Challenger, and Ford Mustang all saw drops this month. Of course, you might be thinking, ITS WINTER! But last year, sales of three were slightly higher - Camaro: 5,551 in 2016 vs. 3,588 this year; Challenger: 5,661 in 2016 vs. 3,393 this year; Mustang: 7,580 in 2016 vs. 5,046 this year.
  • You would think automakers would be increasing the transaction prices on SUVs and trucks to make a little bit more dough. Not so. According to Kelly Blue Book's monthly new-car transaction report, the average transaction price on trucks or SUVs either stayed the course or saw a slight decrease/increase (ranging -0.1 to 0.5 percent when compared to last month).
  • Fiat Chrysler Automobiles sales slide continues with an 11 percent drop in January. How do you reverse this? Sources tell Automotive News that FCA is planning to add an additional 400 dealers in the U.S. That's on top of the almost 2,500 dealers across the country. What could go wrong?

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On FCA we saw the stop of production on 4 models, 2 of which, the Patriot and Compass, being major sellers for the them.  The stop of production and dwindling dealer stock on those 2 alone would explain a major reason for the drop.  Add in the 200 and Dart and thee is your difference.  on top of that the new Compass is not yet available.  More worrying is Toyota and Lexus, particularly ANY drop in SUV and CUV sales which cannot be explained away with a half-hearted claim of low inventory. 

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Very interesting and good wrap up.

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I enjoyed reading this, even if it was a lot of bad news.  Good article, thanks!

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