- Stocks 'Overvalued By At Least 20%,' Rosenberg Says
- Pimco's Gross Warns of Future Pressure on Credit
- SEC Seeks To Curb Naked Access, Expose Fast Trades
- 'Dark Pools' Help Investors: Goldman Sachs
- Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm
- Vivendi CEO Says IPO an Option for NBC Universal
- U.S. Steel Posts Third Consecutive Quarterly Loss
- Roubini Not Alone in Fearing Dollar Carry Trade
- Merrill's McCann To Head UBS Private Client Group
- Art Cashin: Dollar Carry Trade Could Cause Big Pullback
- Post-Traumatic Layoff Disorder?
- Schork Oil Outlook: It is Starting to Get Interesting
- 5-Star Stock Picker: Where to Get ‘Absolute Return’
- America's Cup On Rocky Waters
- Is America Ready For a New 'Power Trip?'
- Farrell: Lower Oil—A Much Needed Welcome Tonic
- Activision Blizzard's Bobby Kotick on DJ Hero
- 15 Stocks Expected to Pop
MOST SHARED
- Singapore Capitaland Quarterly Profit Down 33%
- Facebook, Twitter Cost UK Firms $2.25 Billion a Year
- Oil Prices to Rise Further; Trade to be Volatile: Petrobras CEO
- Home Prices in August Rise for Fourth Straight Month
- Honda Raises Forecast, Stimulus Fuels Car Sales
- Punch-Drunk US Dollar Rallies, Keeps Fighting
- McDonald's to Shut Business in Iceland
- 15 Stocks Expected to Pop
- Small Businesses Knead Dough
Text Size 
U.S. auto sales likely fell in September back to the nearly three-decade lows of early 2009 without government incentives to spur buying, leaving in doubt the timing and pace of a recovery for the battered industry.
Nearly 700,000 new cars and trucks were bought by U.S. customers through the government "cash for clunkers" incentive program from late July through the first three weeks of August, a leap from recession-stunted sales earlier in 2009.
 |
The massive jump in buying versus earlier in 2009 depleted the stores for all the major auto manufacturers, leaving industry inventories at historically low levels.
Major automakers made sharp production cuts due to the economic downturn in general. Chrysler, now under management control of Italy's Fiat, and GM, also broadly halted output around their restructurings in bankruptcy.
The exhaustion of the government incentive program and a dearth of key vehicles at dealerships curtailed activity at many dealerships through the first half of September, but there have been some signs of sales improving late in the month.
"We have started to get little rumblings that maybe the consumer isn't quite so flat on their back, that they have been responding to some of the incentive programs and the fact that leasing is coming back," said Rebecca Lindland, an automotive research director at IHS Global Insight.
Lindland said the General Motors 60-day return guarantee program has attracted consumer attention, Chrysler's return to leasing earlier in September should provide support and other automakers have brought back some incentives. "There are some little tiny slivers of hope," she said.
"There are still a lot of obstacles out there," she said. "I think we are still going to see the hangover from 'cash for clunkers' both in September and almost potentially through the end of the year."
Sales Drop at All Major Automakers
U.S. auto industry sales rose 1 percent to more than 1.2 million vehicles in August from a year earlier under the "clunkers" program, the first time monthly sales pierced the 1 million mark in a year.
However, none of the largest manufacturers are expected to post sales gains in September, and Edmunds has forecast a 23 percent industry sales decline for the month.
Edmunds expects Ford Motor [F
Loading...
()
] to post a 9.7 percent sales drop, GM a 46.1 percent drop and Chrysler a 48.7 percent decline among the Detroit automakers.
Edmunds expects Toyota Motor [TM
Loading...
()
] to post a 9.7 percent sales decline, Honda Motor [HMC
Loading...
()
] an 8.3 percent drop and Nissan Motor a 1.1 percent drop among Japan-based automakers.
The August sales gain represented a seasonally adjusted annualized rate of 14.1 million vehicles, but did little to turn the tide on annual sales. U.S. auto industry sales were down nearly 28 percent through August 2009 versus last year.
Global Insight expects U.S. September auto sales to come in at a 9.33 million seasonally adjusted annualized rate, or well below the 12.5 million unit rate from a year ago when credit markets froze in the wake of the Lehman Brothers collapse.
The median forecast for U.S. auto industry sales was 9.5 million vehicles from 41 economists surveyed by Reuters, while J.P. Morgan believes the annualized rate could drop to 8.9 million vehicles — the lowest month since December 1981.
"We continue to believe (the monthly annualized rate) will hover around 9 million through year-end, but we remain confident in a gradual recovery in the first half of 2010 given strong evidence of a bottoming pre-clunkers," J.P. Morgan analyst Himanshu Patel said in a note to clients Monday.
Influential industry forecaster J.D. Power and Associates expects a 9.2 million vehicle annualized sales rate, but believes improving consumer confidence and credit conditions could rebuild retail sales in the coming months.
- Some investors may find that this is the time to put their money in an asset class that lasts.
- Buyout king and Wall Street legend Teddy Forstmann on the source of the crisis and the future of Wall Street.
- Will our children inherit a United States less prosperous and powerful than the one given to us?
- Movie studios, desperate to return to growth, are scrambling to shape the post-DVD era, says the New York Times.
- Social networking sites like Facebook and Twitter are costing businesses over $2.25 billion per year in lost productivity.
- Although there has been much discussion of how bad weather has hurt supplies of pumpkins, there's no shortage in the beer aisle.
Data is a real-time snapshot *Data is delayed at least 15 minutes