Auto Sales Have Bottomed - Month 2
On May 1st, I made the call that light vehicle sales in the United States had hit a bottom and the rapid deterioration that we had witnessed over the past year would stop. Some weakly disputed my claim by citing erroneous WSJ statistics and blanket statements that unemployment is headed to 100%.
Let's see how the market is performing a month after my call that we will not go below 9.5 to 10 million units on an annual basis in the U.S. In May, 925,824 light vehicles were sold in the United States. That's interesting, but since I used annual sales as a benchmark let's look at how the results look when they are annualized. Here are the facts:
Using the widely cited (but nonetheless terrible) SAAR: 9.91 million units
Multiplying May's 925,824 sales by 12: 11.1 million units
Annualizing the year-to-date U.S. sales of 3,948,991 units: 9.48 million units and trending upward
All of this is despite the of the two largest bankruptcies in American history, let alone the auto sector.
Things clearly aren't all fluffy bunnies and cuddly kittens in the industry. They're are bad. As a whole sales were still down -33.7% year over year in May. For those who are obsessed with percent changes, this number should improve dramatically as the year progresses because the comps will be come much, much easier.
I'm not saying that sales are going to bounce back quickly, they won't. Or that we will return to the days of 17 million vehicles in the U.S. any time soon, we won't. Much of that was fueled by an unsustainable trend of loose credit, MEWs, low interest rates, historically low unemployment, and overestimated residual values that lead to unreasonably cheap leases. The days where we sold 16 to 17 million units annually in the United States are gone for a while, but things are stabilizing and businesses are adjusting.
U.S. light vehicle sales appear to have bottomed