Daily Auto News Auto Sales Hit 15-Month High on Clunkers Cash
Daily Auto News
With Uncle Sam’s help, Americans bought cars at pre-recession levels in August – but some analysts are wondering whether the sales binge may contribute to a lean fall for automakers.
The Detroit Free Press reports, “Droves of U.S. consumers, propelled by cash-for-clunkers vouchers up to $4,500, helped drive August auto sales to their best performance in 15 months — welcome news after a long period of dismal sales, historic bankruptcies and uncertainty about the future.”
Some automakers saw their first positive sales figures all year. The Washington Post reports, “Ford said its U.S. sales of light vehicles were up 17 percent over last August, according to figures compiled by the research firm Autodata. Honda also showed an increase, with its U.S. sales up 9.9 percent, to 161,439. Toyota’s sales rose 6.4 percent, to 225,088, as its Corolla and other sedans were popular sellers in the clunker program.” And Korean automaker Hyundai saw its U.S. sales “hit a record in the month, with sales up 47 percent from the previous year.”
But not all automakers reached black ink in August. The New York Times notes, “Sales at GM dropped 20 percent and Chrysler’s sales fell 15 percent.” General Motors, however, still saw an important benefit from the program as it sold off an oversupply of some models, and was forced to “to increase vehicle production to replenish inventories.”
Chrysler did not see the same sales bump as other automakers primarily because its lineup is heavily biased toward trucks and SUVs. The Free Press notes, “Of the more than 1.26 million consumers who bought a new vehicle in August, nearly 58% chose a passenger car over a less-efficient pickup, van or SUV — a shift that shows the impact of the clunkers program. Typically, car and truck sales are split more closely.”
Luxury automakers were also left out of the sales surge, since many luxury cars were excluded from the Cash for Clunkers program. Bloomberg reports, “Deliveries fell 22 percent to 22,892 vehicles for Lexus, the annual leader in luxury sales, Toyota City, Japan-based Toyota said today. BMW, based in Munich, reported a 24 percent drop to 19,232 for its namesake brand, the second largest.”
The industry faces an uncertain future now that the government’s effort to spur car sales is at an end. The Los Angeles Times notes, “The question now facing automakers is how much of that sales momentum will carry on into the fall — and how much expired with the clunkers program.” In a note to investors, Barclay’s auto analyst Brian A. Johnson wrote, “Now that cash for clunkers is over, we believe that the debate will center on the impact of a potential ‘pull forward’ effect on auto sales in the next few months.” If the program caused Americans to buy cars before they otherwise would have, then it may have boosted August sales at the expense of future sales.
Jeremy Anwyl, chief executive of Edmunds.com, told the Washington Post that the auto industry may “go from August being the best month of the year to September possibly being the worst.”
Automakers, however, see reasons for optimism. The Wall Street Journal notes, “Car makers expect a sales dip in September but they are confident the U.S. economy is gradually improving and the broader trend in car sales is positive.” Ken Czubay, vice president of U.S. sales and marketing at Ford Motor Co, told the Journal that he does expect a sales dip next month, but “September will be an aberration.” Bob Carter, a Toyota Motor Corp. group vice president, agreed, citing “concrete signs of an automotive recovery moving into the fourth quarter.”
If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.
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