Car sales

Toyota is expected to sell it’s 300,000th hybrid in the US (including Hawaii) some time this week.

Through February Month End, there have been 288,790 Toyota/Lexus hybrids sold in the USA. As of this morning (with sales through Friday, March 24th), the total is 296,164. Toyota is currently tracking to sell over 13,000 hybrids this month and should hit the 300K number by Friday.

The good news doesn’t stop for Toyota. The combined U.S. sales of Toyota, Scion, and Lexus vehicles, according to the Power Information Network (PIN), totaled 217,284 units in March. Toyotas March sales were an all-time record for one month, up 6.9 percent from the same month a year ago. From March 2006 (544,841) to March 2005 (507,236) sales were up 7.4 percent. Toyotas marketshare as of March 2006 is 13.8 percent.

Total Sales for March were 1,526,474, down from sales of 1,526,474 in 2005.

General Motors sales fell 14.4 percent from last year. From March 2006 (950,244) to March 2005 (1,002,502) sales fell 5.2 percent. General Motors marketshare as of March 2006 is 24.21 percent, down from last year at 25.81 percent.

General Motors announced an agreement with the Cerberus Capital Management LP (CCM) to purchase 51 percent of General Motors Acceptance Corporation. According to Joanne Krell, Spokeswoman for GMAC, “there are pre-closing conditions and regulatory approvals that have to be met before the sale is finalized. The pre-closing conditions include the buyer’s conditions that GM’s credit rating not go below CCC and GMACs credit rating not go below BB. Currently, Moodys has GMAC at BA1 with a review, Fitch has GMAC rated at BB with a positive view and S&P with a rating of BB with developing implications. GM is rated BBB. There is also a regulatory approval with the Pension Benefit Guaranty Corporation (PBGC) on a liability agreement that says that GMAC will have no liability from General Motors pension benefit’s plan. If GM does not meet any of these conditions, CCM has the right to option-out of the deal.”

Krell went on to explain that GMAC sold 78 percent of its commercial mortgage unit on March 23, 2006. The sale netted proceeds of $8.8 billion of which $7.3 billion goes to paying off intra-company loans. GMAC has three distinct business operations; finance, insurance, and mortgage. The finance segment netted $660 million in 2005. The Insurance segment netted $417 million. The Mortgage segment, known as ResCap, netted $1.311 billion. In 2005, GMAC earned more than $2.8 billion, but took a charge in the fourth quarter, resulting in a net of $2.394 billion for the year. GMAC paid a return dividend to GM of $2.5 billion and had $20 billion in cash. GM is expected to receive $14 billion from the 51 percent sale of GMAC; $7.4 billion in cash, $2.7 billion in the conversion of GMAC to a limited liability company and the rest is the cash flow of assets monetized over 3 years.

According to Wikipedia, “Cerberus Capital Management LP is a large, politically-connected, privately-owned hedge fund. The firm is based in New York, NY and run by 45-year-old financier Steve Feinberg. Former Vice President Dan Quayle has been a prominent Cerberus spokesperson and runs one of its international units.

Founded in 1992, Cerberus invests primarily in companies that are near bankruptcy, and hopes to make the businesses it acquires profitable.”

In a Standard and Poors statement on their website, they say “GM is in a deal to sell a 51% controlling interest in General Motors Acceptance Corp. (GMAC) to a consortium of investors led by Cerberus Capital Management. It expects to receive about $14 billion in cash from the deal over three years. The agreement appears to have better financial consideration than we expected, as well as several terms that allay some of our concerns about GM retaining only a minority interest. The sale is expected to close in the fourth quarter, subject to normal approvals. We do not expect the transaction to be significantly dilutive to 2006 earnings per share (EPS,) but we expect more dilution in 2007. Some of the success of the transaction will be conditioned upon GMACs ability to improve its credit rating and lower its and GM’s borrowing costs.”

Krell says that GMAC is excited by the sell, “There is a lot of energy for this transaction. GMAC had ten years of growth. This is the first year that was not on record. This sell should strengthen our credit rating and lower the cost of capital.” Ford sales fell 4.8 percent from last year. From March 2006 ( 728,584) to March 2005 (750,110) sales fell 2.9 percent. Ford’s marketshare as of March 2006 is 18.56 percent, down from last year at 19.31 percent.

A survey released by Edmunds.com said the average incentive on a vehicle sold in March 2006 was $2,510, up 7 percent from February 2006. GM, Ford, and Chryslers combined incentive, according to Edmunds, averaged out to $3,205 per vehicle in March 2006, compared to $3,001 from February 2006.

According to J.D. Power and Associates and the Power Information Network (PIN)