November U.S. auto sales are out tomorrow morning. Get ready for hype of how many red 2-door V-6’s this automaker or that moved on Black Friday. It’s not relevant. I really don’t care whether the month tracked at 15.5 or 16.1 million SAAR. We are closing on on the shift from a rapidly expanding market to a market where costs will automakers will have to control costs and command price.
Here are three things to look at as the year ends. More important than overall volume.
Inventories have crept up. If December is a blow-out, +16 million, then this may adjust. If it paces in mid 15’s. Say 15.5-15.7, then I expect continued inventory build to be a worry.
So Japanese brands are back in the U.S. auto market. I wasn’t aware they ever left.
Japanese brands gained during crisis, but overall have been stable.
Sure, the past two years have given us production upsets from a tsunami, the Tsunami and a hyper strengthening of the yen all while the US auto market has bounced back from historic lows during the financial crisis. Japanese brand market share peaked in 2 Continue reading →
China auto sales are in for the first half and they are slightly ahead of the consensus of 5% growth for the year. Overall PV sales are up 7.1% over last year, and again we see a two-tiered level of performance.
First-half growth was driven largely by a rebound on the Japanese brands after their hit from last year’s earthquake impact, and a push from luxury brands 2012 actions to move overbuilt inventory. Overall GM + the Japanese brands lead the increase while locals were relatively flat. June sales were extremely strong +16%, I see this as mainly driven against the constricted J3 sales post earthquake in 2011.
The Japanese brands drove market growth with newly stocked inventory. June sales were extremely strong for Honda in particular, up 84%. Nissan and Toyota had more regular supply last year leading to results more in line with YTD numbers.
US Sales were up 16% for May 2012. SAAR comes out at around 13.8 million for the month, which threw some cool water on analysts expecting the 14+ million pace to continue. What is worrisome is that too many analysts took their numbers up on a strong April that clearly showed some flattening signs as did May. Whenever I see mid-month weakness in the numbers followed by an ultra-strong close, I see slowing demand. Jan – Apr tracked at a 14.5 million pace, and May has pulled that down to 14.3 million. While bulls had rushed to push some numbers up around 15 million, more experienced market watchers have held closer to 14 million forecasts. Why does it matter? Continue reading →
US auto sales are in today and the results are pretty interesting at first glance: At the moment, we have sales +3%, not worrying as last April was a big month and Q1 was solid as we end the first 4 months up 10%.
While I‘ll probably eat my over my low-end forecast for the year (13.5 million), April appears to be throwing some luke-warm water on those calling for 15 million this year and 16-17 soon after. As I’ve said all along, replacement demand is not linear, and the spike in recent buying is Continue reading →
Historically, fleet demand, has run around 20% for the industry, some makes have turned heavy to fleet to unload excess production during tough product times. As recently as 2010 Chrysler was thought to be selling 40% of its weak car lineup to fleets, and there was a point in the last decade when Mitsubishi was said to be selling near 50% of their volume to fleet.
On the good side, fleets do give a good showcase for product if done strategically, with small allotments of new or interesting product. But you can’t make Continue reading →