Surprisingly Strong September US Auto Sales Forecast

Strategic Insights -

Auto sales continued to show strength in September, despite concerns over consumer confidence and economic growth, with new-vehicle retail sales projected to reach 842,000 units, marking the first time since April that the retail seasonally adjusted annualized rate has been above 10 million. This comes as a surprise, given recent data suggesting a slowdown in consumer spending. Despite some caution from analysts, the overall indicators in the auto sector remain positive.

Key Takeaways:

  • September new-vehicle retail sales are projected to come in at 842,000 units, marking a seasonally adjusted annualized rate of 10.3 million units, the first time since April that the retail SAAR has been above 10 million.
  • J.D. Power analyst Jeff Schuster noted that retail sales exhibited unexpected strength in the second week of September, as recovering inventory levels helped to bring buyers back into the market.
  • Analyst John Humphrey added that the uncertain global environment, specifically the debt troubles in Europe, continue to be the major source of downside risk in the US economy and automotive markets.
  • J.D. Power maintained its forecast for light-vehicle sales in 2011 at 12.6 million, up 9% from the preceding year.
  • The Detroit Three, including Chrysler, have increased production by 16% year-to-date, while Japanese manufacturers have lost 8% due to parts shortages.
  • GM's improved performance was indicated by the review of the company's credit for a possible upgrade by Moody's.

Statistics:

  • September new-vehicle retail sales are projected to reach 842,000 units.
  • Seasonally adjusted annualized rate for September retail sales is 10.3 million units.
  • Total light vehicle SAAR for September is projected to be 12.9 million.
  • Light-vehicle sales in 2011 are forecast to be 12.6 million, up 9% from the preceding year.

Sources:

  • J.D. Power: "September new-vehicle retail sales projected to reach 842,000 units"
  • TheStreet: "FDX executives say consumer spending has slowed due to loss of faith in policy makers"
  • Moody's: "reviewing GM's credit for a possible upgrade"
  • US Airways: "advanced bookings are ahead in every month as far out as I looked"