March Sales: Consumers Not Compelled to Buy, Says Edmunds Forecast
By Michelle Krebs March 27, 2008SANTA MONICA, Calif. — Despite an abundance of rich incentive deals, March
vehicle sales for the industry are expected to be lower than March 2007 and even lower than February when automakers report results Tuesday, Edmunds.com
has forecast.
March new-vehicle sales, including fleet sales, are expected to total 1.33 million, a 13.2 percent decrease from March 2007 and a 13.9 percent increase from February 2008, according to Edmunds’ forecast on sales figures not adjusted for the difference in selling days.
The forecast is less dreary when adjusted for the difference in selling days. This March had 26 selling days, two fewer than last March 2007. When adjusted for this difference, sales decreased 6.5 percent from March 2007.
"Consumers feel there is no compelling reason to buy a car right now," said Jesse Toprak, Edmundsâ executive director of Industry Analysis.
Good Deals Abound
That's despite the fact that attractive incentive deals were in abundance in March.
Automakers have been offering increasingly aggressive incentives on vehicles in slow-selling categories such as minivans, full-size pickup trucks and SUVs. Those deals got even better. For example, Chrysler bumped up the incentives on the Dodge Ram to $5,500 in March.
Also in March, heftier incentives even spread to smaller, lower-priced cars like the Chevrolet Cobalt and Nissan Versa, noted Jessica Caldwell, Edmunds' manager of pricing and industry analysis. Small cars have been hot sellers in the past year, requiring few incentives.
A bunch of lease deals cropped up in March as well.Chrysler, for instance, offered a version of the PT Cruiser with a $99 per month lease payment, while more than 20 other models were offered with monthly payments of $199 or less, Caldwell noted.
"Even Bentley got into the act in March, offering finance deals for 4.99 percent over 60 months," said Caldwell.
Waiting for April's Shower of Incentives
Still, consumers appear to be waiting for even better incentive deals, which may well arrive in April. âSome shoppers seem to be waiting for dramatic incentive announcements that seem inevitable, while other consumers are likely more focused on general economic and personal financial concerns."
The combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates is estimated to be 51.1 percent in March 2008, down from 52.7 percent in March 2007 and down from 52.2 percent in February 2008.
Still, March was tough, with virtually no automaker spared, putting the entire industry on track for the worst year in recent memory.
Big Six Outlook
Edmunds.com predicts:
Chrysler will sell 170,000 units in March 2008, down 17.7 percent compared with March 2007 but up 13.4 percent from February 2008. This would result in a new-car market share of 12.8 percent for Chrysler in March 2008, down from 13.5 percent in March 2007 and even at 12.8 percent in February 2008.
Ford will sell 217,000 units in March 2008, down 15.1 percent compared with March 2007 but up 13.5 percent from February 2008. This would result in a new-car market share of 16.3 percent of new-car sales in March 2008 for Ford, down from 16.7 percent in March 2007 and even at 16.3 percent in February 2008.
GM will sell 294,000 units in March 2008, down 15.1 percent compared with March 2007 but up 9.0 percent from February 2008. GM's market share is expected to be 22.1 percent of new-vehicle sales in March 2008, down from 22.6 percent in March 2007 and down from 23.1 percent in February 2008.
Honda will sell 134,000 units in March 2008, down 6.7 percent from March 2007 but up 16.0 percent from February 2008. Hondaâs market share is expected to be 10.1 percent in March 2008, up from 9.4 percent in March 2007 and up slightly from 9.9 percent in February 2008.
Nissan will sell 102,000 units in March 2008, down 8.4 percent from March 2007 but up 18.1 percent from February 2008. Nissan's market share is expected to be 7.7 percent in March 2008, up from 7.2 percent in March 2007 and up slightly from 7.4 percent in February 2008.
Toyota will sell 211,000 units in March 2008, down 13.0 percent from March 2007 but up 15.9 percent from February 2008. Toyota's market share is expected to be 15.9 percent in March 2008, up from 15.8 percent in March 2007 and up slightly from 15.6 percent in February 2008.â¢
Change from March 2007 (Adjusted for fewer |
Change from March 2007 (Unadjusted for fewer selling days) | |
Chrysler |
-11.4% |
-17.7% |
Ford |
-8.6% |
-15.1% |
GM |
-8.6% |
-15.1% |
Honda |
0.5% |
-6.7% |
Nissan |
-1.3% |
-8.4% |
Toyota |
-6.3% |
-13.0% |
Industry Total |
-6.5% |
-13.2% |
SOURCE:EDMUNDS.COM
LEAVE A COMMENT
Click here to comment on this entry.Could weather be a factor? With so many of the OEM's down on sales it seems that no one company muffed their marketing plan.
I drive all around the Ohio and MIssissippi River Valleys; the traditional stronghold for auto manufacturers and consumers. I've seen a lot of flooding and water damage. This, along with cooler than normal temperatures, higher than normal precipitation may have people here, at least, in a funk.
Another factor may be the revised CAFE ratings. I don't think the majority of people see enough difference in mpg from what they're driving now vs a comparable new vehicle to justify trading. Add in housing and job uncertainty issues; political issues yadayada and I sense a collective "wait awhile" outlook.
By the way, are used vehicle sales down similarly?
Good question fulcrumb - used car sales could be up because people may want a newer car than they have but not brand new. Thereby saving some money whilst getting a newish, safer, more fuel efficient car. Would be good to know if Edmunds tracks used car sales and maybe include them monthly.
I think Guy is right that used car sales might/should be up. Given the economic conditions used cars typically do well in markets like this. Many of the independent dealers and BHPH dealers I have spoke with a doing pretty well with their used car lots. But they are in Southern CA, Texas and Arizona so it may be skewed to those regions.
Can anyone provide better insight into the used car market?
Also, Fulcrumb I think you are dead on with the weather issues. It slowed retail sales across the board in this regions. But are the heading to used or new car lots when they do make it out to buy a car? That is a pretty interesting question.
Quite a few of my neighbors have traded in their new vehicles for used ones. I'm noticing a lot more 5 year old vehicles on the roads than previously. With the exception of Silveradoes, I've seen very few new cars, period. Of course Great Falls, MT isn't a well-to-do part of the country, but changes in the market can be felt even here. I'd imagine my microcosm might be representative of the economy at large. Then again, maybe I'm just finding premises for my argument (seeing what you want to see). ;-)
While sitting at the airport in Honolulu on Thursday night watching CNN, I saw these forecasts scroll across the screen on the little ticker. :o)
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