by Lloyd Frazier
Looks like the Germans and the Japanese are vying for the crown now. GM is in the tank and losing ground daily and Toyota sales have sagged 32% in September. That is the biggest decline for Toyota since 1987. Consequently, their share value has fallen below VW’s. Contrast that with Volkswagen’s all time high of 304 Euros in September. VW holds the crown due to higher market capitalization of a higher exchange rate. Overall, U.S. car and truck sales fell for the 11th month in a row. That is the longest sales slide in 17 years. Withering truck and SUV sales are what is killing Toyota. GM, Ford and Chrysler are feeling that same pain as well. If VW’s portfolio contained a large portion of trucks and SUVs, I am sure the story would be much different.
The U.S. is not the only country feeling the pinch. China, India, and Western Europe are expecting further downturn in their markets. Predictions for 2009 are for even more decline in auto sales. The credit crunch is really starting to sting dealers. Most dealers are asking for bigger down payments or even cash to purchase a new vehicle. All-cash transactions are the highest in 3 years. Thirty-one percent of non-luxury sales were all-cash in the last week of September.
Toyota being the global player that they are, should weather the storm and come out of this slump in pretty decent shape. GM, if they can get the cash infusion they so desperately need, should salvage their existence as a major player for another year or two. Volkswagen wants to be the biggest player in the world of automobiles. They have quite lofty goals for units sold here in North America. One wonders why they partnered with Chrysler to get a minivan in their line-up. They have been marketing it quite heavily in television ads here in the states. Only time will tell if that was a good move or not. And the little ol’ black beetle from the early days has been quite the spokesman in its commercials.
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