Despite the roller-coaster ride on Wall Street, sales of new vehicles remained steady during August with Detroit makers collectively experiencing an increase in demand, according to new estimates of current sales trends.
If there was any drag on the U.S. new car market for August it was the result of the ongoing product shortage faced by some of the key Japanese makers due to the March 11 Japanese tsunami and earthquake.
Both Edmunds and TrueCar.com, two Internet sites that collect and analyze car and trucks sales data, indicated August sales will be up 8% over year-earlier totals — and also up slightly from July — despite the turmoil in the stock market. That echoes other recent reports that suggest that despite concerns about a possible double-dip recession consumers have been slowly loosening their pocketbook strings.
The sales projections, however, were made before Hurricane Irene hammered the East Coast on what is usually a busy weekend for sales, so the final numbers that are due out later this week could be weaker than initial projections.
Detroit’s automakers — General Motors, Ford and Chrysler — are all expected to post double-digit, year-over-years sales increases, but only GM and Chrysler will see month-over-month sales increases in August from July.
“Auto sales stayed on a relatively flat road this month, even as the stock market took a roller coaster ride,” said Lacey Plache, Edmunds chief economist.
“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,” she said.
Plache said Edmunds also projects Toyota has done little in August to build on its momentum from July, when it gained a modest 1% in sales — with August expected to bring a decrease of 0.2 percentage points in market share over the same period. Toyota’s August sales are expected to be down 14.4% compared with last year.
Even with lingering inventory issues still to sort out, Honda will likely show some month-over-month sales gains this month. Edmunds.com projects that Honda’s August sales will grow 5.4% over July, with a market share gain of 0.2 percentage points. Compared to last year, however, August sales are still expected to be off about 25%.
“We fully expect August will be the worst month of the year in terms of the inventory situation” caused by the March disaster, said Mike Accavitti, Honda of America’s new marketing chief. “The good news is that our plants are back up in full production and product is now on its way to dealers,” which could bode for a better performance in September.
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% from July, leading to a market share loss of 0.5 points.
“The auto industry is a mixed bag this year, due to economic uncertainty; sales have improved compared to last year, but nowhere near the potential we had expected,” said Jesse Toprak, VP of Industry Trends and Insights for TrueCar.com.
“The strongest correlation to new car sales is the Dow Jones Industrial Average and it was shaky and nervous in August,” Toprak said.
For August 2011, new light vehicle sales in the United States are expected to be 1.077 million units, up 8% from August 2010 and 2% from July 2011.
The August 2011 forecast translates into a Seasonally Adjusted Annualized Rate, or SAAR, of 12.2 million new car sales, flat from 12.2 million in July 2011 and up from 11.5 million in August 2010, according to Edmunds.
Retail sales are up 4.9% compared to August 2010 and fleet and rental sales are expected to make up 20% of total industry sales in August 2011.
The industry average incentive spending per unit will be approximately $2,663 in August 2011, which represents an increase of 3%, Edmunds predicted.