US auto sales: Toyota rises, Nissan marks time

by SR on May 7, 2012

US auto sales confirm Toyota strength; inventory still low

US auto market year-to-date cumulative sales by year

  • Conclusion: US auto sales looking to exceed 2008 levels in 2012. I have been having a leisurely rummage through the US auto sales data for April 2012, which was released during Japan’s Golden Week holidays last week. It’s taken four years since the global financial crisis but it looks as if this year we will finally see the auto market in the US exceed the level of 2008, which marked the start of the GFC. The chart above shows that in 2012 (the red line) US auto sales are already well above the level of 2011 (the cyan line) and are nudging the purple line that shows 2008. As 2008 monthly sales drooped substantially towards the end of the year, there is a good chance that we will beat 2008 shipments in 2012, which is of course what the seasonally adjusted annualized rate (SAAR) of monthly sales has been telling us recently (see below).

Seasonally adjusted annualized rate of monthly auto sales (SAAR)

  • Toyota keeps pushing, nudges up market share. Toyota managed to raise its US auto market share substantially over the previous year in April 2012 but this is only to be expected considering the post-earthquake supply chain disruption that was freezing auto output in Japan at the same time in 2011. Inventory helped cover the shortfall in April 2011, when Toyota’s share was still 13.7% but in May 2011 that plummeted to 10.2% (the red line in the graphic below). Back in the present, Toyota raised its US auto market share sequentially from 14.5% in March to 15% in April 2012. Baby steps, but encouraging.

US auto market share by brand

  • Inventory still lagging. My feeling is that with the new models and launches it has going this year Toyota can and will do better with its market share in the US provided that it can raise output; the inventory days are still looking rather low (see chart following). Toyota needs to get more product into the channel as quickly as possible and that push is what drove global production in March 2012 to a record high. This does of course benefit core Toyota suppliers such as Denso and Aisin Seiki.

Toyota days of US auto sales in inventory

  • Nissan’s apparent weakness is normal-ish for April. In contrast to Toyota, Nissan posted a sharp sequential fall in its US auto market share (the purple line in the market share chart) from 9.7% in March 2012 to 6.0% in April 2012. Year-on-year, the company’s market share was basically flat, as Nissan’s US sales do not depend to any significant extent on Japan-based production and so US sales were not much affected by the earthquake. That plunge in share in April 2012 compared to the previous month looks bad, but this is not as abnormal as it may seem. If we take the month-on-month change in Nissan’s US market share, in percentage points, for all the months of April over the past decade we can see that there is a pronounced tendency for it to fall. I interpret this – forgive me, Nissan management – as the company stuffing the channel and using incentives to meet sales targets for the financial year and then relaxing in April. (Somewhat unusually Nissan’s US subsidiary has a March year-end, like the parent company in Japan. It is more common for US subsidiaries of Japanese companies to have a December financial year end.) That tendency for market share to drop off in April has become much stronger over the past few years, perhaps in response to increasing pressure from head office in Tokyo to meet sales figures with an all-out push in March (again, this is conjecture on my part).

Nissan US auto market share change in April compared to the previous month, in percentage points, from 2001

  • Hyundai Sonata? What’s that then? Looking at the market share chart, it is interesting to note that Hyundai’s market share of the US auto market has remained fluctuating around the 5% level since early 2009. I also note that, according to publicly available data from Wards Automotive, the Toyota Camry was the top selling car in the US with 105,405 units for the first four months of 2012. Next came the Nissan Altima (96,360) with a big gap to the Honda Civic at 77,169. No Korean models appear in the top 10, despite all the excitement over the Hundai Sonata last year. Yes, a good car and nobody will deny that Hyundai and KIA haven’t been doing well in the US, but over the past two years their Japanese rivals, Toyota in particular, have been fighting with one hand behind their back. That will change in 2012.

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