How Bad Was The Week For AutoMakers? Let Me Count The Ways

Implications: Was there any good news in the past weeks automaker and auto retailers reports? Not much.

Analysis: Between the automakers and the auto retailers, the past week was one they would all like to forget. GM, Ford, Chrysler, and even Toyota, came in with quarterly reports that were even worse than expected.

The large public auto groups followed up with reports of declining sales, diminished profits, and CarMax reported that that the one segment some felt was immune to sales declines, used cars, was also down.

So, will the good times ever return in North America? Back to the halcyon days of record sales and profits?

Certainly, things are still climbing in growth markets like China, if flattening off: July passenger vehicle sales were up 6.79% year-on-year though down 17.02% from June. Passenger vehicle sales for the first seven months of this year grew 15.9% to 4.10m units. Honda China's sales rose 33.6% from a year earlier and were up 23.1% year-to-date.

Oh, for some good news from the West. Instead we had to see that U.S. sales tanked 20%last month. Though, as ever, there were bright spots in the form of volume hikes for well-made and relatively fuel-efficient domestics like the Chevy Malibu and Ford Focus and import fuel-sippers like Toyota's Corolla and Yaris and Honda's Fit, up an astounding 72.9% in its final model year.

Amongst individual automakers, only Nissan, at 0.1% and Daimler at 15.7% made gains in the U.S. last month. Chrysler led Detroit over the cliff, down 34.4% followed by GM -31.8% and Ford -21.3%.

So could we find better news on the other side of the Atlantic? Nope. Falling consumer confidence over there saw the UK new car market fall 13.0% in July-the steepest decline since December 2006. Western Europe didn't grow either.

Even Toyota's worldwide reach did not immunize it from the U.S. subprime crisis and leasing residual meltdown. Operating income was off 38.9%, net income off 28.1%. Analysts felt that though the mighty automaker was taking some knocks it was moving quicly to adjust its model mix.

Meanwhile Chrysler claimed a operating profit and a healthy cash surplus. And, in an authoritative business paper, said it was looking at outsourcing development and  production of mid-size cars to Nissan, where it is already doing small-car business.

The public auto retailers? All of them are down, a few of them, like Lithia, can't seem to figure out how to deal with the new auto environment. Others, like CarMax, are finding out that when you have a "no-hassle" selling model, it doesn't leave you a lot of options in closing deals.

Oh, did we mention, all of the captive lenders, and most of the major banks are getting out of the leasing business? it remains to be seen just what impact this will have on sales over the next several months. It certainly won't be good.