Editor: You’re OK, now, aren’t you?

Jun 1, 2010

The automotive news nowadays abounds with such upbeat-worthy items as the economy is certainly improving, consumers are beginning to spend again and Wall Street pushes the Dow over 11,000 (now and again). Oil companies reported, again, record profits (except for BP, with its Gulf oil rig catastrophe). Ford touts its big profits. GM, too (although, will there be consumer fallout should the automaker be taken to task over its claims that its “complete” payback of the borrowed bailout isn’t all as claimed).

Volkswagen declared a near-triple gain in profit over loss from April 2009 to April 2010. And some think Nissan could be the biggest winner with 50% sales growth April 2010 over April 2009.

There’s also Audi of America, after toasting its “best first quarter in the brand’s history” this year, reporting its April 2010 sales increased just shy of 33% over last April. Plus, Asbury Automotive, the country’s sixth largest auto dealer ballyhooed its first-quarter-to-first-quarter sales leap from $300,000 in 2009 to $7.4 million in 2010.

More good news. Kia Motors America announced last month that its April sales produced a 17.3% increase over the same period last year; its year-to-date sales are up almost 13% (with its new U.S-assembled Sorento CUV topping the list as Kia’s best-selling vehicle). Edmunds.com is even more generous than Kia is to itself; it claims the combined Hyundai/Kia April sales were expected to be 35% over 2009.

The list could go on. And it does.

Even troubled Toyota sold consumers with enough assurances of its products’ safety and reliability (or maybe its incentives) to claim April U.S. sales in its Toyota, Lexus and hybrid divisions to be more than 24% above the same period last year. Still, the negative impact of the several and mass recalls and “a flood of damaging publicity to their brand, Toyota’s PQS [perceived quality score] has decreased significantly by 16.5 points between fall ’09 and spring ’10,” according to ALG, an automotive residual values research firm. “Consumers continue to remain wary of Toyota’s quality since the recalls, resulting in a drop in PQS ranking among mainstream brands from first place in fall ’09 to 6th place in spring ’10.”

Moreover, many aftermarket suppliers say their businesses are up.

These companies, clearly, know who’s on first. At least from their perspectives. But like with GM’s “full-loan payback,” is there more to the story than we’re seeing?

Even though Edmunds.com’s’ CEO, Jeremy Anwyl, a staunch supporter of the car sales business and oft-critic of the government’s involvement in the auto industry, says the “economy is showing signs of recovery.” But then he notes that “consumers are still wary, so today car-shopping is largely about bargain-hunting.” Don’t most Americans hunt for bargains? Isn’t that why there are so many Wal-Marts?

But Edmunds’ also proposes that as the March buyer incentives wane, “April’s dip shows the auto industry’s recovery will be a slow and bumpy one,” its senior analyst, Michelle Krebs, said. In fact, Edmunds.com wrote in bold that it “Forecasts April auto sales: Car sales down as automakers pull back on incentives.” Sales always dip once incentives are gone and consumers wait to see whether new ones will appear – which they will as summer edges on.

The Wall Street Journal, also acknowledging America’s economic growth, headlined in early May that “Cars [are] in ‘full blown recovery’ as discounting aids sales.”

With all this economic positivity – real or perceived – coursing through the automotive world this must mean that restylers should be feeling the good effects right about now.

Aren’t you?

Aren’t you?