Industry Fails To Climb Back to 10-Million SAAR; Culprit Likely Cash For Clunkers
July 03, 2009
By Bill Visnic
With several industry consultants and analysts predicting U.S. auto sales
would exceed a 10-million-unit Seasonally Adjusted Annualized Rate in June -- a much-anticipated watershed many believed would signal slumping auto sales are beginning a consistent recovery -- the real numbers didn't quite match the optimistic projections.
Instead, June's SAAR not only failed to hit the 10-million mark, the 9.66-million final tally even regressed from May's figure, according to data analysts at Edmunds.com.
One likely (but unintentional) culprit: the new "Cash for Clunkers" legislation signed by President Obama on June 24.
Although the law, which provides rebates of $3,500 or $4,500 for those trading eligible old vehicles for new models, is expected to pull upwards of a quarter-million new-car buyers into the market, waffling about its final rules -- and, more important, its implementation date -- probably kept a significant number of buyers out of the market as they waited for closure.
Auto executives said confusion among buyers about incentives from the program -- officially known as Car Allowance Rebate System -- kept some on the sidelines and led to softening sales in the final week of June.
June's SAAR of 9.66 million trailed the May 9.89-million SAAR and marked the third time in the first half the SAAR pulled back from the previous month, setting a pattern several manufacturers' sales executives say they hope will not be repeated in the second half. Instead, some a pointing to evidence from several key economic measures -- not to mention the certain volume boost from the CARS program, which kicks of July 24 -- as indicators auto sales will firm in the second half.
But, as was the case with the hoped-for 10-million SAAR in June, projections do not always equal reality, particularly in the current high-volatility U.S. auto market.
Posted by Michelle Krebs at 5:21 AM under Analysis , Companies | Comments (1) | digg this | Seed Newsvine
With the new jobless figures, continued income contraction, and drop in hours worked, don't expect sales to get better in the second half of the year.
We'll be fortunate if they don't get worse.
Posted by: billddrummer | July 06, 2009 at 1:28 PM