October auto sales are on pace to be their strongest since August of 2009, when cash for clunkers had everyone rushing to a dealership. For the most part, the numbers are not out of this world incredible, but they show the industry improving sales 8 percent year over year.
Yes, sales at Toyota and Honda are still lagging as they push to ramp up inventories that were depleted earlier this year.
Still, when you listen to the sales conference calls, almost all automakers are saying the same thing: the auto market is on a steady upward trend that should continue for the foreseeable future. In this economy, that should mean something.
In reality, in this economy, those projections don't mean a whole lot.
As the stock market whipsaws up and down, there is little celebrating about the growth in auto sales. In fact, when you talk with executives at automakers and with dealers you get a feeling they expect sales to start pulling back. This is not what you would expect when you look at transaction prices for new vehicles. The combination of modest incentives and consumers paying to "up content" their cars & trucks are pushing prices higher.
Truecar.com says the industry's average transaction price in October was $30,487, up $138 from September and up $1,390 from October of last year. So why the pessimism about auto sales? Primarily it stems from the fear our economy may go from slow growth to even slower growth or no growth at all. The fact the unemployment rate still hovers around 9 percent and is unlikely to drop worries auto execs. Jonathan Browning at Volkswagen of America summed it up best saying, "There are still are some underlying consumer confidence issues."
It's the new malaise hanging over the automakers. Sales may be growing, but few in the industry are celebrating.
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