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The Start of a cyclical recovery for the auto sector? - Part 2



October 26, 2009 – Comments (2) | RELATED TICKERS: F , TM , HMC

Last week I wondered aloud if October represents the beginning of a cyclical recovery for U.S. auto sales.  In that post, I cited estimates from Bank of America / Merril Lynch and True Car that October 2009 U.S. light vehicle sales will improve from last month and only be down single digits versus the same period in 2008.

Today we can add another even more optimistic data point to our forecast of what October will be like for the auto industry. J.D. Power and Associates just announced its estimate for the month and it believes that light vehicle sales in October will drop only 6% year-over-year, their first single digit y-o-y decline after seventeen consecutive months of double digit drops (excluding the C.A.R.S. month).  Moreover, Power believes that sales will rise 9.7% (15.2% excluding fleet) versus last month, a solid bounce back after the Cash for Clunkers-induced hangover.  If this came to pass, October's SAAR would rise to 10.3 million units.

J.D. Power expects total auto sales in 2010 to increase 12% from the depressed 2009 level, with the potential for an upside surprise.

"While year-over-year comparisons benefit from a low selling base in October 2008, improvements in consumer confidence and credit are propelling the return to positive sales gains relative to last year," explained Gary Dilts, senior vice president of global automotive operations at J.D. Power.

"As economic conditions improve, there's a renewed sense of optimism and momentum building in the industry," shared Jeff Schuster, executive director of global forecasting at J.D. Power.

Will October represent the beginning of a cyclical recovery for the auto sector?


2 Comments – Post Your Own

#1) On October 26, 2009 at 1:18 PM, blueberrygoo (44.73) wrote:

Deej, remember that October last year was the start of the financial crisis and the SAAR dropped hard from September '08 to Oct '08.  So for the analysts to say this month is so great b/c we are only single digit % lower versus Oct 08 is just not saying much to me.  It means we are in the "L" shaped recovery.  This is the new normal.

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#2) On October 26, 2009 at 1:21 PM, bullnada (< 20) wrote:


  I can tell you here in So Cal. things are not getting better. Atleast not for G.M. products. I know a dealer with multiple dealerships from San Diego to San Fran. He is hurting.

  I dont think the autos are getting better. Just my 2 cents.

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