SUV sales tank as gas soars
Soaring gas prices sent sales of sport utility vehicles into the tank in North America last month. Sales of the biggest SUVs tumbled as hurricanes Katrina and Rita and fears of gas shortages sent fuel prices soaring to well above $1 a litre across most of Canada and US$3 a gallon south of the border. “These ultra high gas prices are taking a toll on the larger, less fuel-efficient light trucks,” said industry analyst Dennis DesRosiers, who heads DesRosiers Automotive Consultants in Richmond Hill, ON. The slide hit large SUVs in particular. Sales in that category, which includes such behemoths as Dodge Durango, Ford Expedition, GMC Yukon and Nissan Armada, slumped 50% last month in Canada from year-earlier levels, according to data released by the auto makers yesterday. That compares with an overall decline of just 2.4% in the Canadian vehicle market last month. The market also suffered from the end of discount programs at some auto makers that allowed consumers to pay the same price as employees for their new vehicles. Overall, sales in Canada fell to 124,175 vehicles, from 127,233 in September of 2004. Each of the Big Three reported a drop, with Ford and GM noting large declines in truck sales. At DaimlerChrysler Canada, car sales fell, while truck sales rose, sparked by a big jump in sales of minivans.
(Globe and Mail, National Post 051004)
I swear the automotive companies are handi-tarded. Or at least their Marketing departments are. Are they seriously still intent on focusing on the SUV market after seeing how fickle the buyers are?
Ford, GM placed on credit watch by ratings firm
Citing falling sales of sport utility vehicles, ratings firm Standard & Poor's placed both General Motors and Ford on credit watch, saying that the ratings of both of the two companies could be lowered by mid-January. S&P credit analyst Scott Sprinzen said the decision stems from the fact that the 2007 vehicle lineups for both Ford and GM are heavily dependent on SUVs and trucks amid high gasoline prices and cooling demand for big, gas-guzzling vehicles. Sprinzen cited the sales performance of the two companies in September as "the immediately precipitating factor," combined with GM and Ford's already weak financial performance. Sprinzen said the firm will decide to lower or affirm the ratings on GM and Ford after the two companies report their fourth-quarter earnings. "We'll be looking closely at the third quarter numbers and sales performance over the next couple of months," Sprinzen said.
(Wall Street Journal 051004)