What do Mercedes, Mini and Nissan have in common? They were the only three car makers to see sales rise in the US market last month.
July was nothing short of a sales blood bath in America. Chrysler’s sales fell 34 per cent compared with July 2007. GM was down 32 per cent, Ford down 21 per cent. Even impregnable Toyota was down 18 per cent. Over the whole of the first half of 2008, the numbers are not quite so terrifying, but then the sales slow-down only now seems to be gathering pace.
The pace of the downturn is such that some analysts are warning that General Motors is burning cash at such a rapid rate that it could be in really serious trouble in just 12 months. The only hope is that the new car market stabilises.
And there’s good and bad news for the UK’s car makers. Mini sales are up 32 per cent, Rolls Royce was up 5 per cent and Jaguar crept up 2 per cent on the back of the XF.
But then again the pound is still very strong against the dollar, making it hard to turn a profit on US sales. So BMW isn’t going to up production for US-bound Minis, despite the demand. There are more profitable markets to be serviced. On the other hand, Bentley sales are off 28 per cent, Aston Martin by 18 percent and Land Rover around 32 per cent. It’s a worst-case scenario: the strong pound renders profits wafer-thin and the sinking American economy is hammering sales volumes.
Cash burning at Ford and GM will also have a serious effect on new product development in Europe. Sources say that future EU-market models are already being culled as the head office drowns in red ink. The old cliché that if the US sneezes, the UK catches a cold has never been truer. But it seems that the wider European car industry is also set for a dose too.