Analysis
Downward sales pressure exerted by low inventories and exacerbated by bleak financial news undermining consumer and business confidence globally, will leave this month’s U.S. daily light-vehicle sales just below July levels.
Ward’s forecast LV sales will equate to a 12.1 million-unit seasonally adjusted annual rate, just below July’s 12.2 million.
The SAAR had achieved a 13 million-plus first-quarter average before the March tsunami and earthquake in Japan disrupted global supply chains.
The Ward’s forecast calls for 1,069,180 car and light-truck deliveries in August, equating to a SAAR of 11.7 million and a daily sales rate of slightly more than 41,000 units, over 26 selling days.
That’s slightly more than last month, which had 26 days, and up 3.5% from year-ago, when there were 25 selling days.
In July, month-end LV inventory – stymied by capacity issues and continued fallout from the Japan disasters – dipped below 2 million units in the U.S. for the first time since December 2009.
The resulting 48-day supply of vehicles was the lowest since August 2009, when stocks fell to a 29 days’ supply in the wake of month-long shutdowns at bankrupt General Motors and Chrysler. U.S. LV inventories totaled nearly 2.5 million as recently as March.
Anxiety over the soaring U.S. debt and the nation’s downgraded credit rating, along with similar financial worries among some of Europe’s largest markets, have increased speculation the global economy may be headed for a double-dip recession.
The uneasiness has cast a pall over hopes that businesses soon will begin hiring. The U.S. unemployment rate at the end of July was 9.1%.
Despite tight supplies and bad economic news, pent-up demand for vehicles probably is responsible for driving sales volumes as high as they are. After several years of sitting out of the market, many consumers and businesses simply have to replace old vehicles.
Related document: Ward’s U.S. Lt. Vehicle Sales and Inventory Forecast
Ward’s expects GM to increase daily sales 12.3% over year ago on deliveries of 216,000 cars and light trucks. Ford should see a DSR bump of about 9.3%, while Chrysler, still competing against anemic year-ago performances, should see a rise as high as 16.6%.
Collectively, Detroit vehicle sellers will account for some 48% of August sales.
Toyota should fare about as well in August as it did in July, taking a 12.2% share of the market with sales of about 130,000 vehicles – even with prior-month, but down 12% on a daily basis from year-ago.
Nissan could take more than 8% of the market, with a DSR rise of 7.8% vs. year-ago, while Honda likely will be the month’s biggest loser, with depleted inventories giving dealers fits. Ward’s forecast shows the Japanese auto maker taking just 7% of the market on 75,000 sales – a 33% drop in daily sales from like-2010.
The year-to-date SAAR through July of 12.5 million units puts August on the downside of the trend. In light of poor expected August sales, continuing inventory shortages and softening consumer confidence, Ward’s now projects full-year sales for 2011 to fall below the previously forecast 13 million-unit mark into the 12.8 million to 12.9 million range.
