February Vehicle Sales: The Blowup of the Bailed-Out Continues
For the second month in a row, taxpayer-bailout beneficiary General Motors fared worse than every one of its non-bailed-out competitors.
The Associated Press's Tom Krisher and Bree Fowler didn't totally hide that fact, but it took them until the 22nd paragraph of their report, which was supposedly about the February performance of the entire auto industry ("Auto sales slump persists as consumers stay scared"), to mention the specifics of the sales declines at Toyota, Honda, and Nissan. Those declines "just happened" to be smaller than those at General Motors, fellow bailout bud Chrysler, and non-bailout recipient Ford. The AP pair stated in an early paragraph that "Japanese makers fared only slightly better." Readers will, I believe, question Krisher's/Fowler's definition of "slightly."
Also not emphasized, and illustrated in a chart below: The share of the US auto market held by Detroit's so-called Big Three has fallen significantly since the government bailouts of GM and Chrysler in December.
Here are excerpts from the AP pair's report yesterday:
Major automakers' U.S. sales continued their deep slump in February, putting the industry on track for its worst sales month in more than 27 years as huge rebates and low-interest financing failed to spur fearful consumers to make a major purchase.
General Motors' sales tumbled 53 percent from a year earlier, while Ford's U.S. sales fell 48 percent and Chrysler's fell 44 percent. The major Japanese automakers fared only slightly better.
The slide casts further doubt on the financial viability of GM and Chrysler, which need to sell cars and generate critical cash to supplement the $17.4 billion in government loans that are keeping them in business.
Automakers and analysts have been predicting sales will rebound in the second half of this year, but they are becoming less certain. Massive layoffs, the stock market decline and sliding home values are prompting people to hold on to their cars longer, while those who are buying are more often opting for a used car or truck.
..... (Paragraph 22) Toyota Motor Corp.'s U.S. sales plunged 40 percent, while Honda Motor Co.'s sales dropped 38 percent and Nissan Motor Co.'s fell 37 percent.
Sales of the Toyota Camry, the best selling car in the U.S., sank by 41 percent. Demand remained strong for Honda's Fit subcompact, whose sales dropped 2 percent, but sales of its top-selling Accord sedan fell 42 percent.
Most other automakers posted significant declines, but Subaru of America Inc.'s U.S. sales edged up 1 percent in February as sales of its top-selling Forester model doubled. Motor Trend magazine named the Forester its sport utility vehicle of the year in the fall.
Kia Motors Corp.'s sales were about flat from a year earlier.
Here are the details I have on the past three months, followed by data showing how the Big 3's share of Big Six sales has declined since December, the month of the Bush-approved and Obama-sanctioned bailouts began (sources: February 2009, January 2009, December 2008):
I contend that there is reason to believe that potential buyers -- and it doesn't take many to have an effect -- are shunning GM and Chrysler because of their bailed-out status. Unfortunately, Ford seems to be suffering similar blowback, which I believe is at least partially because the press has all too often headlined the aid given to GM and Chrysler as "the Detroit bailout" or "the US auto industry bailout."
The AP pair did not offer the very existence of the bailouts as a possible reason beyond the obvious ones relating to the ever-weakening Pelosi-Obama-Reid Economy aka The POR Economy. They should have, unless they have an answer to this question: What else, besides producing possibly lower-quality cars, explains the 50%-ish plunges in Detroit -- much bigger than before the bailouts -- and the more than "slightly" smaller drops elsewhere?
Cross-posted at BizzyBlog.com.