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The drop in September new vehicle sales will not be as steep as I initially thought it would be

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September 11, 2009 – Comments (4)

Well, it looks like I beat the fancy PhDs over at Edmunds.com to the punch again.  Last week (September 4th) I revised by dour forecast for weak September light vehicle sales in the U.S. upward slightly saying the following

There certainly will be a dramatic drop in September auto sales, however this drop might not be as large as I initially thought it would be if A) there are a number of vehicles that consumers ordered during the CARS program that weren't delivered until this month and B) the effectiveness of the program was exaggerated meaning that there was slightly more "real" demand for autos last month than many believe.  Interesting stuff. (link)

Edmunds.com issued the following statement today:

Edmunds.com announced it has adjusted its prediction on the seasonally adjusted sales rate for vehicles in September, and the new forecast is creeping upward.

Prior reports by the company had the SAAR at 8.3 to 8.4 million units. However, the company now said it believes that number to be 600,000 vehicles higher at 8.9 million, based on information obtained from Sept. 1 through Sept. 5 of this month.

"The industry is still experiencing a depressed level of sales, but we're seeing modest improvement from week to week," said Jeremy Anwyl, chief executive officer for
Edmunds.com.

"Soon we should surpass the level that the industry was at before Cash for Clunkers launched," he speculated.

Interestingly, the company predicts that 3.6 percent of the SAAR is attributable to clunker sales, which is down from 6.4 percent based on numbers from the last week of August.

"Of the vehicles sold so far this month, 3.6 percent are ‘hold-over' Cash for Clunker orders that are being delivered," officials stated.

SAAR to Reach Pre-Clunker Levels Soon

I will do some channel checks later on this month to see what sales are like (sales are typically so heavily weighted towards the end of the month that it's tough to get an accurate gauge on how things are going this early on).  Any stronger than expected demand for new vehicles is an excellent sign for the economy.

Deej

4 Comments – Post Your Own

#1) On September 11, 2009 at 10:00 AM, alstry (35.74) wrote:

I think it will be a lot higher than 10 million SAAR now that GM is giving away cars for free for 60 days.

The only thing that can beat this is when car makers start paying people to take cars off their hands to subsidize the oil industry and insurance companies.....sorta like how they gave away computers if you purchased internet service.

This should not be too far off as more and more suffer job losses and massive wage cuts due to current Zombulation policies.

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#2) On September 11, 2009 at 10:31 AM, TMFDeej (99.31) wrote:

The General offering monsterous incentives on its vehicles is no way to run an automaker, but it's also nothing new.  It's been doing this for years.  The more things change, the more they remain the same.

I'm very curious to see the details of this program.  I'm sure that they won't make it easy for people to essentially steal a new vehicle from them for two months and then give it back.  If there isn't a catch then they're really stupid.

Besides, Saturn had a 30-day return policy for years and clearly it didn't do much for it, given the fact that the brand is essentially dead.

Deej

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#3) On September 11, 2009 at 10:37 AM, alstry (35.74) wrote:

It simply shows the desperation of the marketplace and GM in particular....we should get a good read focusing on the foreign brands now dominating the market.

September is generally a decent month with new model introductions....if things are slow....you know there is trouble ahead as bankers keep cutting off credit and raising interest rates on consumers and businesses.

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#4) On September 11, 2009 at 4:20 PM, angusthermopylae (39.41) wrote:

I doubt if the numbers will be significant, but will GM also report on the number of cars returned?  Will that count against their sales, or will it be ignored, and the cars relegated to the used-car market?

Sounds a bit gimmicky to me...

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