Clunkers program saves automakers’ day… for now

Auto sales came out yesterday and they didn’t disappoint. Automakers sold almost 1.3m cars and pickup trucks in August, marking a 1% increase y/y and almost 300,000 more than last month’s sales data. Annualized sales spiked to 14.09m vehicles, more than a third higher than 11.24m in July and better than the 13.56m back in 2008.

The CEO of Ford and a sales analyst for GM are encouraged not just by the numbers but also other economic indicators that have been reported recently.

Despite that, it is not good news for everyone if we are to look in a year-on-year basis. It is mostly foreign automakers who have the reason to be happy. Toyota’s sales surged 6.4% while Honda Motors was up almost 10% to sell 225,000 and 161,000 vehicles, respectively. Ford saw sales higher by 17%. General Motors’s sales, on the contrary, dropped 20% while Chrysler was in a bit better position of a 15% drop. Both reported increased sales from July.

Now that the clunkers program has ended, the automakers are not back to worrying.

From the WSJ:

On Tuesday, however, Moody’s Investors Service estimated that about 60% of the vehicles sold with clunker rebates were purchased by consumers who were not otherwise intending to buy.

Some dealers already report a decline in showroom traffic with the demise of the rebates.

Leaner inventories are also a cause for concern for the major automakers as well as dealers.

More on the report here.

A nice graphic from the WSJ on the car sales:

WSJcarsales

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