OEM Sales Figures Year Over Year
July 3, 2006
The Year over Year news on some auto manufacturers may look depressing, but you have to consider what happened this time last year.
GM introduce the "Employee Discount" promotion. The promotion was widely accepted by consumers, and was soon matched by Ford and Chrysler in the following month.
Thus, what we have is an "artificial blip" in auto sales, particularly for GM, and even more specific in the truck category. The truck category was the area that saw the biggest boost from the promotion. The truck category also happens to be where the biggest XM Satellite Radio penetration is with GM.
Last year in June GM sold 168,877 cars as compared to 168,199 this year. The impact here was minimal.
Last year in June GM sold 375,388 trucks as compared to 236,019 this year. The impact here was nearly 140,000 more trucks last year than this year. That translated into a big subscriber boost for XM last year. The impact of which was felt in October as the "non-takers" churned out (the issue was compounded in July because the promotion continued).
This led to substantially higher than normal OEM subscriber numbers in Q2 and Q3 for XM, and then led to substantially lower than normal OEM subscriber numbers in the fourth quarter.
Ford and Chrysler tried to match the program in part of July, but did not see the same boost that GM saw.
This year Chrysler is leading the "Employee discount" charge. This will mean that Sirius will see the benefit of a subscriber boost in the second quarter. Because the Chrysler subscribers are 1 year subscribers, the churn effect that XM saw 4 to 5 months will be seen by Sirius in 13 to 14 months from now. The extent of this will be better understood when Chryslers sales figures are posted for July.
investors should take what happened to XM as a lesson going forward, and be aware of that as 2007 guidance is discussed.
The Toyota boost is what we would call a "REAL" boost in sales. Toyota is not running specialized promotions outside what they normally do. Their vehicles simply seem to be resonating with consumers at this point.
7/03/2006 11:01:00 PM
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