Looking Up?
By Stefan Budricks, Editor

When I started this column, the title sported no question mark. It also kicked off with what is now paragraph two. However, in the midst of the writing, events occasioned by the Greek debt crisis took on such grave implications — exacerbated by the thought that Spain and Portugal might follow the Hellenes’ example — that they roiled markets across the globe, including those in the United States. These developments put a damper on what otherwise might be considered great news for the U.S. automotive industry. But let’s go back to the (original) beginning — before the addition of the question mark above.

Barely six months ago, we welcomed news that new-car sales had stabilized. Now we can take heart from a string of positive reports that indicate recovery in the new-car market. Overall vehicle sales in the United States for the first quarter of 2010 were up 15.7 percent compared to the first quarter in 2009. While this is a gratifying improvement, the automotive data provider, JATO Dynamics, cautions that sales numbers are still far short of previous levels (e.g., 2,544,829 vehicles in Q1 2010 vs. 3,570,360 in Q1 2008).

Some of the numbers JATO breaks out are nothing short of astounding. For example, the Chevrolet brand sold 70.4 percent more cars in the first quarter this year compared to last year. Ford cars did nearly as well, with an improvement of 60.3 percent. While Toyota still sold the most cars, it advanced its sales numbers by only 3.1 percent. Trucks sold well, too. GMC showed the greatest sales growth: 34.4 percent. Ford followed with 31.3 percent.

While the sales numbers are encouraging, particularly those of American brands (in addition to gains by Ford and Chevrolet, Buick sales are up 59 percent, and Cadillac’s 25 percent), the return to overall health by U.S. automakers, albeit slowly, is good news. Showing a $2.1 billion profit for Q1 2010, Ford was able to post net income for a fourth consecutive quarter — something that hasn’t happened in five years. GM was able to pay off $8.4 billion in government loans in April — five years ahead of schedule — and is hoping to return to profitability and again go public this year.

Economies have become so globalized, it seems that if any one country anywhere sneezes the rest of the world can expect to come down with a cold sooner or later. Hence the nervousness generated by the situation in Greece. Already pundits are expressing fears of the malady spreading across Europe, possibly leaping the pond and causing a double-dip recession this side of the Atlantic. This, just as we are making headway.

The U.S. auto industry’s ties to Europe are sizable. Consider: Of the top brands there, Ford is in third position. The company’s Fiesta model is second in sales only to the Volkswagen Golf. GM’s Opel/Vauxhall brand is number seven in Europe and fields the eighth and 10th most popular models. The Fiat component of the newly formed Fiat/Chrysler entity holds the fifth slot on the top-brands list and its Punto and Panda models come in fourth and sixth in sales.

According to JATO’s figures, auto sales for February 2010 were generally lower in Eastern Europe compared to February 2009 and generally higher in Western Europe — the notable exception being Germany where sales dropped a jarring 29.8 percent. Germany, of course, tends do be the senior partner in the financial rescue of any EU country with a nasty balance sheet. Make of that what you will.