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July Sales Report: A Tale of CARS and Trucks

Charles Krome
by Charles Krome
August 4, 2009

Here's the short story on July sales: The market was up about 15 percent compared to June, with buyers purchasing an extra 137,977 units over the previous month, for an overall year-over-year decline of just 12.2 percent. Which has to be considered an improvement.

In addition, I can even report that three automakers (four if you count Kia separately from Hyundai) showed true, no-funky-statistics-needed sales increases: Ford, as most people have already heard, notched a 2.9 jump, Kia was up 4.7 percent, Hyundai scored an 11.9 percent rise and Subaru moved enough metal to boost its sales by 34.2 percent. And most of the other automakers can at least say they again narrowed their sales declines: General Motors was down 19.4 percent; Toyota, 11.4 percent; Honda, 17.3 percent; Chrysler, 9.4 percent; and Nissan 24.6 percent. From a market share standpoint, GM, Toyota and Chrysler gained, the other three lost.

But now let's strap on our ClunkerVision goggles to take a closer look at what the numbers say about the Car Allowance Rebate System. And what I'm seeing is a program that's been a success at quickly boosting sales and slowly '” but noticeably '” changing buying behavior. It's just that most of the action appears to be driven by people who aren't actually taking advantage of the CARS program per se, but are instead getting caught up in the excitement around it. Not that there's anything wrong with that.

What I mean is this: The folks over at Jalopnik have they're calling "official, exclusive" information about the top vehicles being purchased under the program. And yes, the sales winners, except for the Ford Escape, are relatively small, fuel-sipping cars like the Ford Focus (the most-purchased vehicle under the CARS program); Toyota Prius, Camry and Corolla; Honda Civic and Fit; and Chevrolet Cobalt.

But while some of these vehicles saw significant, double-digit sales increases in July, others, like the Fit and Cobalt, actually had double-digit declines: the Honda was off 27.6 percent, the Chevy was down 42.5 percent.

Next, let's look at some of the other big winners from the overall July sales numbers, just kind of randomly selected for contrast value: Jeep Compass, up 95 percent; Jeep Patriot, up 134 percent; Chevrolet Equinox, up 77.8 percent; Ford Escape, up 94.2 percent; Ford Ranger, up 64.5 percent(!); Ford Flex, up 64.7 percent; Dodge Journey, up 21 percent; Toyota RAV4, up 32.5 percent; and Volkswagen Tiguan, up a whopping 180.4 percent. And don't forget that Subaru, as mentioned, posted a +30 percent increase across the lineup.

What this tells me is that the July sales jump had (at least) two components: there were the people using clunker money to buy new cars, and there were people caught up in the general July excitement who bought smaller trucks (and truck-like objects). And the numbers seem to indicate it was the latter group that was responsible for the majority of the overall sales increase in July. In other words, while many American buyers may still be wedded to a certain style of vehicle, they don't necessarily still see the need for the truckish substance.

That's a good thing, and it's something that people '” members of Congress included '” should keep in mind when trying to analyze the effect of CARS.


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