Volvo sales are slumping so much that the automaker has decided to end production for models bringing in the least revenue. But when you look at 2010 reports from Ford, Nissan and Kia, they won’t have the same sad story.
“Ford Motor Company continued to impress investors with the strength of its turnaround, earning $6.6 billion in 2010, its second consecutive annual profit and the highest since 1999,” Inside Line reports. “But the automaker disappointed Wall Street in the fourth quarter, netting a modest $190 million, down significantly from its year-earlier profit of $886 million. Executives chalked up the sub-par performance in the final quarter to higher costs associated with reducing its debt and launching new models such as the redesigned 2011 Ford Explorer.”
Ford is thrilled that sales are finally improving following declining profits, a result of the economic meltdown in 2008. “We are pleased with our 2010 performance, which enabled us to increase our planned distributions,” Ford Credit Chairman and CEO Mike Bannister says in a press release. “We expect results to be solid though more moderate in 2011 as we continue to provide strong support for Ford, our dealers and customers.”
Kia is also doing well. The automaker elaborates, “In January, Kia Motors reports all-time record sales with 356,268 units sold for 2010, up 18.7-percent over 2009 and a 16.6-percent increase over the annual mark set in 2007.” According to The Boston Globe, “Kia, maker of the Sorento crossover, earned 2.25 trillion won ($2.02 billion) in 2010, the company announced Friday. That was a gain of 55 percent from 1.45 trillion won the year before. Revenue rose 26 percent to 23.3 trillion won. Global sales volume increased 39 percent to 2.13 million vehicles.”
Nissan also reports a sales increase, and states in a press release, “Nissan's global production in 2010 increased 37.3% year-on-year to 4,053,701 units, reaching a record high for the calendar year, exceeding 4,000,000 units for the first time for the calendar year.” Autoblog says more profits means Nissan’s shifting its location the industry. “In the U.S., the pecking order among Japanese automakers looks like this: Way out in front is Toyota, followed by Honda and Nissan respectively. On a global scale, however, Nissan has finally leapfrogged Honda for second banana status. Torque News reports that Nissan's global sales soared 21 percent in 2010 due in part to exploding business in China. All told, Nissan moved 4.08 million units during the calendar year.”
While Ford, Nissan and Kia are finally climbing out of an automotive slump, some automakers are still suffering. One is Volvo, who is discontinuing models with low sales like the C30 and V50. Another is Chrysler. “Chrysler, the smallest of Detroit’s automakers, said Monday that it lost $199 million in the fourth quarter but pledged to return to profitability this year on the strength of new products,” The New York Times explains.
What does this mixed bag of numbers and percentages mean for consumers? With some automakers recovering and others struggling to catch up, automakers should start offering competitive incentives to keep a strong consumer following and gain sales. Take Kia, for example. In the past year, Kia has released the Forte, Optima and Sorento, three models that have surprised the industry with their long warranties, quality and affordability. Naturally, Kia wants to maintain its glowing reputation, and should continue to keep prices low and quality high to attract consumers. At the same time, Ford has released models like the Ford Fiesta, 2012 Focus (which will be out soon) and 2011 Explorer, which pose stiff competition for Kia and Nissan.
If you’re in the market for a new car, check the competition. Automakers will offer strong incentives to compete with each other and keep sales in the black, meaning you’ll great a great vehicle at a great price.