Car Sales Pace Accelerating as Deal-seekers Come Out for Summer Sell-down, Explains Edmunds.com
SANTA MONICA, Calif. — July 20, 2010 — Edmunds.com, the premier online resource for automotive information, reports that new cars are selling at a rate close to 12 million SAAR (Seasonally Adjusted Annual Rate) so far this month. However, industry observers should not misread this as a sign of recovery for the industry.
"July and August sales may suggest a rebound but the underlying trends haven't changed. The market mostly consists of deal-seekers today, and July and August are historically among the best months for picking up bargains," stated Edmunds.com CEO Jeremy Anwyl. "The cloud behind the silver lining is that September, October and November will probably be soft, since the old model inventory is largely gone by then, and so are the deals — or so car-shoppers have become conditioned to expect."
Edmunds.com analysis indicates that in June 2010, 88 percent of new cars sold were from the 2010 model year. Traditionally by November, three-quarters of new cars sold are from the new model year and the old model year does not fully sell out until June of the following year.
Consumer psychology also drives people to believe that car incentives are high now, but in truth most car incentives are not particularly generous today, stated Edmunds.com Senior Analyst Jessica Caldwell. "Inventory is relatively low and automakers are reluctant to cut into profit margins more than necessary. However, brands are advertising big sales events and consumers are responding."
Caldwell pointed to Nissan as perhaps the biggest winner this month, as early figures suggest that the brand may be up approximately 25 percent from June's levels. "Nissan has the most aggressive deals in the industry; the company is proving that business can be bought today."
"Remember that comparisons with last summer are not valid," reminded Edmunds.com Senior Economist Rebecca Braeu. "In the first part of July 2009, consumers stood by, anticipating the Cash for Clunkers program, and then later in the month they rushed to dealerships to take advantage. These were not typical patterns."
About Edmunds.com, Inc. (http://www.edmunds.com/about/)
Edmunds.com Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. CarSpace is the most established automotive social networking Web site. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.