March Car Sales Look a Lot Like February Car Sales

March Car Sales Look a Lot Like February Car Sales

By Michelle Krebs March 27, 2009

By Michelle Krebs

SANTA MONICA, Calif. -- March car sales to be reported April 1 by manufacturers look a lot like February car sales, and that's not a good thing since March traditionally marks the kick off of the busy spring selling season.

"If sales continue at this pace all year, we're looking at a Seasonally Adjusted Annual Rate of only 8.9 million vehicles sold, which is slightly more than half of 2007 sales," said Edmunds.com CEO Jeremy Anwyl.

Industry vehicle sales, both fleet and retail, are expected to come in at 774,000 units in March, according to a forecast by Edmunds.com, parent of AutoObserver.com. That's a 42.7 percent decrease from March 2008. And while March sales are up 12.7 percent from February, that's barely over half the normal hike between the two months.

"This is a disappointing way to kick off the typically robust spring selling season," said Jesse Toprak, Edmunds.com's executive director of Industry Analysis. "Generally the industry gets about a 20 percent boost from February to March, but month-over-month sales are up less than 13 percent."

Consumers Pick Used Over New

The latest dire forecast for new-car sales masks the more encouraging news that underlying demand for cars continues to climb from October lows, noted Anwyl. Yet, that demand is being filled by used cars.

"The conundrum for automakers is that currently almost a quarter of the demand is being met with the sale of a used vehicle," Anwyl said.

And used-car sales don't drive the economic engine to the degree that new-car sales do. New-car production and new-car sales generate billions of dollars that flow into the economy, which, in turn, creates and secures jobs, boosts the confidence of consumers and revives spending.

Car Sales Need a Kick-Start

New-car sales need a kick-start. So far, the auto industry focus in Washington has been on supporting ailing automakers. Yet, no automaker -- not even the formidable Toyota -- can sustain itself if the new-car market doesn't rise above current levels.

Other countries have instituted with some success stimulus measures to help new-car sales. Those include scrappage laws, that give consumers incentive to buy a new car to replace their old one, temporary suspension of sales taxes and tax credits. Not even the tax deduction on car loans made it through the last round of Congressional budget talks, a measure that General Motors economists estimate would have added in the neighborhood of 300,000 industry sales a year.

By the Numbers

Meantime, new-car sales stagnate -- or are worsening, in Toyota's view. According to Toyota's forecast, the annual sales rate for March may be about the same level as January and February -- "or may be worse than last month," Toyota President Katsuaki Watanabe told reporters in Tokyo Wednesday as reported by Bloomberg News.

"I still can't see the bottom," said Watanabe, adding: "I hope governments worldwide take measures to stimulate demand."

Similarly, Hyundai's CEO in the U.S. John Krafcik said in a Webcast Tuesday that March was "looking kind of bad." Krafcik forecasts 600,000 to 650,000 retail sales in March, about the same for February when March should have considerably higher sales to kick off the spring selling season, he noted. "It's another indication that we're still in the midst of a pretty deep recession and car buyers staying on the sidelines," said Krafcik.

March Sales Forecast: Company by Company

For March, Edmunds.com forecasts the combined monthly U.S. market share for Chrysler, Ford and General Motors domestic nameplates will come in at 44.3 percent, down from 49.5 percent in March 2008 and from 44.7 percent in February.
 
Edmunds.com predicts for March:

Chrysler will sell 89,000 vehicles, down 46 percent compared to March 2008 and up 7.1 percent from February. This would result in a new-car market share of 11.6 percent for Chrysler, down from 12.3 percent in March 2008 and down from 12.2 percent in February.

Ford will sell 112,000 vehicles, down 49.8 percent compared to March 2008 and up 14.4 percent from February. This would result in a new-car market share of 14.4 percent of new-car sales in March for Ford, down from 16.4 percent in March 2008 and up from 14.2 percent in February.

GM will sell 142,000 vehicles, down 49.6 percent compared to March 2008 and up 12.4 percent from February. GM's market share is expected to be 18.3 percent of new-vehicle sales in March 2009, down from 20.8 percent in March 2008 and down slightly from 18.4 percent in February.

Honda will sell 79,000 vehicles, down 42.6 percent from March 2008 and up 11.3 percent from February. Honda's market share is expected to be 10.3 percent in March, flat from 10.3 percent in March 2008 and down slightly from 10.4 percent in February 2009.

Nissan will sell 61,000 vehicles, down 43 percent from March 2008 and up 12.3 percent from February. Nissan's market share is expected to be 7.9 percent in March 2009, flat from 7.9 percent in March 2008 and flat from 7.9 percent in February.

Toyota will sell 131,000 vehicles, down 39.6 percent from March 2008 and up 20 percent from February. Toyota's market share is expected to be 17 percent, up from 16.1 percent in March 2008 and up from 15.9 percent in February.

March 2009 had 25 selling days, one less than last March 2008. When adjusted for this difference, sales decreased 40.4 percent from March 2008. The chart below sets forth other unadjusted and adjusted comparisons.

	Change from March 2008 (Adjusted for less selling days)	Change from March 2008 (Unadjusted for less selling days)
Chrysler	-43.8%	-46.0%
Ford	-47.8%	-49.8%
GM	-47.6%	-49.6%
Honda	-40.3%	-42.6%
Hyundai	-15.6%	-18.9%
Nissan	-40.8%	-43.0%
Toyota	-37.2%	-39.6%
Industry Total	-40.4%	-42.7%

Source: Edmunds.com

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.