August Car Sales Stuck In Neutral
By Michelle Krebs August 25, 2011
U.S. car and truck sales in August are stuck in neutral, all but confirming that full-year 2011 sales will come in lower than most automakers and analysts had forecasted earlier in the year. Edmunds.com’s forecast for August 2011 car and truck sales shows the U.S. auto industry will sell 1,087,000 vehicles, up 2.6 percent from July and 9 percent from August 2010, not adjusted for the different number of selling days in the months. That would put the Seasonally Adjusted Annualized Rate of car sales (SAAR) at 12.3 million vehicles, roughly the same as July, when the SAAR came in at 12.2 million. Edmunds.com estimates the retail SAAR at 10 million vehicles in August, with fleet sales accounting for 18.5 percent of all sales this month.
While August sales, to be reported by automakers on Sept. 1, likely will be little changed from July, they are at least not going into reverse and remain stronger than they were in early summer. In June, the SAAR fell to its lowest level this year at 11.4 million vehicles from May’s not much better 11.8 million vehicles. Against a backdrop of dreary economic news and a turbulent stock market, August is holding its own. “Auto sales stayed on a relatively flat road this month, even as the stock market took a roller coaster ride,” said Edmunds.com’s Chief Economist Lacey Plache. “Stronger buying conditions are telling consumers to go ahead and make their car purchases, but a weak economic landscape is telling them to wait until later this year, or even longer. This is the battle that will determine exactly how much the auto industry will grow this year.”
Nissan Market Share; Honda/Toyota Inventory Struggle
Honda and, to a lesser degree, Toyota continue to struggle with inventory, depleted due to production disruptions caused by the March 11 earthquake in Japan. Edmunds.com forecasts Honda’s August sales will fall a hefty 22 percent (unadjusted) from August 2010, but up 5.4 percent from this July. Toyota sales are estimated by Edmunds.com to fall 11 percent from August 2010 and be up a scant 1 percent from July. That would result in Toyota’s market share to decrease of 0.2 percentage points and Honda’s to eke out 0.2 percentage-point gain.
Edmunds.com forecasts that Japanese automaker Nissan will see the biggest month-over-month gains among the top six automakers. Nissan is projected to sell 10.4 percent more vehicles in August than July, and 21.5 percent more vehicles than in August 2010. The boost in sales is expected to bring Nissan a 0.6 percentage point increase in market share. “Nissan’s market share growth is a testament to how well it has recovered from the March earthquake compared to its chief Japanese rivals,” said Jessica Caldwell, Edmunds.com senior analyst. “In recent marketing campaigns, Nissan has been directly targeting shoppers who have trouble finding Toyota and Honda vehicles in stock, while further enticing them with juicy incentives like zero percent financing on a majority of their models.”
Ford Declines; GM, Chrysler Rise; Hyundai Still Strong
Edmunds.com forecasts that Ford will be the only major automaker this month to report a decline in sales from July to August. Ford’s sales are expected to be down 0.5 percent from July, leading to a market share loss of 0.5 points. Ford’s sales will still enjoy a 9.7 percent increase over August 2010, according to Edmunds.com. Ford, too, is struggling with inventory, notably of its hottest-selling models – the Ford Fiesta, Ford Focus and Ford Explorer. The Ford Focus (top) is one of the fastest turning cars, arriving at a dealership and being sold in about 11 days, according to Edmunds.com’s Days-to-Turn calculations. Chrysler and General Motors are each expected to post month-over-month sales gains of 7.8 percent and 3.3 percent, respectively. Chrysler’s market share will climb 0.5 percentage points in August, while General Motors tick up 0.1 points over July.
Hyundai is expected to sell 60,839 vehicles this month for a 13.5-percent sales gain over August 2010. In another sign that Hyundai also is struggling with inventory, August sales will only be up 2.1 percent from this July and market share will hold steady 5.6 percent in August, the same as its July share but up from 5.4 percent in August 2010. In an interview with AutoObserver in early August, Hyundai’s chief U.S. executive John Krafcik said the automaker opened the month with only 37,000 vehicles in inventory – barely a 20 days supply, far below the ideal 60 days supply. Hyundai was particularly short of the hot-selling Elantra, which had a mere 3 days supply, and the Accent, which just began its launch and soared to the No. 1 seller in its segment in July.
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