By on September 19, 2009

The 276 Concept was a project by four students and two professors of the HBK Saar Design School in Germany for the 2006 AMI Motor Show in Leipzig.(courtesy diseno-art.com)

Automotive News [sub] brings glad tidings for auto execs drunk on Clunkers: “September’s light-vehicle sales rate will fall to 8.8 million units, consumer auto site Edmunds.com said. That would be the lowest rate in nearly 28 years, tying the worst demand on record.” Well, I did predict an 8m seasonally-adjusted annual sales (SAAR) rate. But did they listen? Noooooo. “They” had to spend $3 billion of taxpayers’ money on a cash infusion that did nothing—zip—to improve the industry’s long term well being. Or even longer. In fact, what’s the bet that the news (which hits for real on October 1) will trigger MORE federal spending on the ailing American automakers? You ain’t seen nothing yet. “Many people regard February as the darkest month of the recession, but even then the SAAR was higher, at 9.1 million units,” Edmunds.com senior statistician Zhenwei Zhou said in a statement. Expect to hear more apocalyptic pronouncements at an MSM outlet near you soon.

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21 Comments on “September Sales Rate Lowest in 28 Years?...”


  • avatar
    Autosavant

    Not only is 8.8 the lowest in 28 years, it is almost 50% off the usual peak production of 17 million a year only a few years ago!

    That is a DEVASTATING drop, and the idiotic CFC program did LITTLE to improve the situation. $3 billion of taxpayer $ were wasted, and 700,000 older cars, worth (conservatively) probably $3,000 each, a total of $2,100,000,000.00 of property, was idiotically destroyed, instead of exported to needy third and fourth world nations.

  • avatar
    Pch101

    September (along with October and November) have always been relatively slow sales months compared to annual averages. The typical peak selling season for cars starts around March and runs through July/ August.

    I wouldn’t take one-half month’s worth of data and annualize it with any expectations of learning much from it. The sample period is too short, and you need to make seasonal adjustments.

  • avatar
    chuckR

    +1 on CFC being a waste of money.
    -1 on a better end for them being exported to 3rd and 4th world nations

    These are not the 50′s cars continuously maintained by the Cubans. OBD and ECUs have put paid to that. Now some faults can’t be welded – they occur at the tens of microns level. I’d bet a lot of those cars were already having some of those faults. As to mechanical problems, a coworker traded his beloved BOF Fleetwood because it wouldn’t pass upcoming inspection. His mechanic told him a year ago that he should be prepared to bail out if the cracked input manifold caught the engine on fire. What have 3rd and 4th worlders done to deserve that beauty?

  • avatar
    rolosrevenge

    Robert? I thought you were gone?

  • avatar
    dwford

    September is the triple whammy: back to school time is a slow time for new vehicles, dealers are out of inventory, many customers got sucked into the C4C frenzy and bought in August. Discounts are back.

    I will say that in my showroom, we are seeing fewer ups, but those that come in are actually in the market.

    We have had great success with a “$3000 minimum trade value” promotion the last 2 weekends. It really only works out to be marginally better than if we just discounted the vehicle and gave the customer actual cash value for their ancient trade, but much of the car buying process is the customer perception of the deal, not the actual deal itself. Some deals we make out and take a trade that is worth something close to $3000, some deals we take a loss because the trade isn’t worth $100. It all evens out.

  • avatar
    Dick


    Not only is 8.8 the lowest in 28 years, it is almost 50% off the usual peak production of 17 million a year only a few years ago!

    That is a DEVASTATING drop, and the idiotic CFC program did LITTLE to improve the situation. $3 billion of taxpayer $ were wasted, and 700,000 older cars, worth (conservatively) probably $3,000 each, a total of $2,100,000,000.00 of property, was idiotically destroyed, instead of exported to needy third and fourth world nations.

    That was beautiful and straight to the point.

    Robert, we’ve had our disagreements. but you’re a good man and I’m going to miss your writing and sense of wit.
    Now I need a hug.

  • avatar
    Autosavant

    While we do not have the detailed statistics on the CFC trade-ins that were crushed, I claimed that “$3,000 per car is conservative”, while others believe the trade-ins had serious faults and were near-collapse.

    I doubt it. People take care of their daily drivers, they cannot afford to lose their job after a few missed days due to car trouble.

    If the CFC was $4,500 per vehicle, every owner of a trade-in worth 4,500 or less would be interested-at first. Some would be worth 4,500, some $1,500, I assumed an average of $3,000, and got $2.1 billion wasted). If y ou instead assume $2,000 per vehicle, it is still a huge $1.4 billion worth of vehicles mindlessly and profligately crushed.

  • avatar
    tscurt

    “….. probably $3,000 each, a total of $2,100,000,000.00 of property, was idiotically destroyed, instead of exported to needy third and fourth world nations.”

    Where I work had a total of 260 clunkers give or take. I spent a good deal of time going through the lot. I couldn’t see exporting what I saw to needy nations unless you wanted to insult them. I agree with most of what you said about the program, but at least in what I observed, some real bad stuff was taken off the road. that part was, in my opinion, good…..and given that the folks who brought them in were better off than those who couldn’t afford cars even with C4C, I shudder to think of what else must still be out there.

  • avatar
    sitting@home

    September’s light-vehicle sales rate will fall to 8.8 million units

    But isn’t this a completely pointless measurement; a bit like predicting Christmas toy sales to be low by counting the number of toys sold in the month of April. It’s a number taken totally out of context.

    By all means state the ACTUAL sales in September and compare to previous Septembers. A rolling twelve month comparison would be better, but to extrapolate annual sales from a single month is useless.

  • avatar
    FloorIt

    This is kinda old news as the figures since Jan 09 have been compared to the 1980-82 economy downturn.
    I have to agree with sitting@home that you can’t use the CFC artificial stimulus sales figures in extrapolating annual totals for this year. Would you extrapolate iphone sales going by the initial month number sold when the price dropped to $299 and people were standing outside the stores to get one?

  • avatar
    CyCarConsulting

    Factories scaled back production for 2009. C4C cleared out all new car inventory leaving scraps to sell in Sept. Most dealers who sell 150-200 new units/month, could see as little as 30-40 cars a month showing up until 2010. You ain’t seen nothing yet.

  • avatar
    50merc

    “Expect to hear more apocalyptic pronouncements”

    ‘Cause the auto biz is nearly apoplectic.

    Regarding yearly projections based on one month’s sales: I think that projected annual sales rate is a “seasonally adjusted” calculation. They take into account that sales always rise and fall over a period of twelve months. Let’s assume that September traditionally produces 4% of a year’s sales. So the actual sales number is multiplied by 25 to obtain a projection of a whole year’s sales assuming September holds true to form in its share of the year’s results.

  • avatar
    RobertSD

    I actually have September coming in around 9.2-9.4M SAAR. Edmunds does a weak job of factoring fleet sales. They seem to have historic levels, multiply it out and get their numbers. Fleet sales are going to be stronger in September than recently. Granted that’s like saying 10 out of 160 people survived a plane crash. But it’s still a terrible plane crash.

    Although GM will perform better than August marketshare wise, they may take the biggest hit YOY (right now, models say -40%, similar to Chrysler)- even with their “magical” 60-day satisfaction promotion.

    Hyundai will continue to outperform, possibly up 10% in Sep. Ford should have the second best performance unless someone goes on an incentive spree in the last 10 days of the month at down 10%.

    I’ll make updates later in the month…

  • avatar
    mpresley

    Well…duh. Who would have thought? As soon as that economic abomination called C4C went south, I headed into my dealer and bought a new car. They were happy to see me, and happy to accommodate my meager purse. I bought a German car at 0% interest for the life of the loan–amazing how cheap someone else’s money is, these days.

    Interestingly, the owner also has a Toyota shop. The sales mgr was quite candid, telling me that the Euro brand did little C4C business (with the exception of some diesels, which were a hot item); on the other hand, everyone with a clunker wanted a Toyota. Good to see that things are “back to normal.”

  • avatar
    PeteMoran

    @ Autosavant

    a total of $2,100,000,000.00 of property, was idiotically destroyed

    Nonsense.

    “Depreciation” and “write-off”, are financial terms you ought to learn about.

  • avatar
    BDB

    Taking this at face value (I’d like to see the actual reports for September first, thanks) how much of this has to do with the fact that C4C decimated the inventory of dealers? I mean how many Focii do you think the local Ford dealer has left after C4C? How many Corollas and Prius does the Toyota dealer have left? I’d venture to guess not many, so lower sales.

  • avatar
    lw

    My personal wild a$$ theory…

    C4C was meant to bailout banks.

    If you were Joe’s Bank and you just got paid back in full for your floor plan loan to the local Chrysler franchise as they cleared the entire lot in just a few weeks (and you know that Chrysler has NOTHING in the pipeline), are you going to renew that line of credit?

  • avatar
    Bill Wade

    I KNEW Robert couldn’t stay away.

    It’s a passion. :)

  • avatar
    jkross22

    I love reading comments from folks poo-poo’ing what is an obvious fact: C4C pulled demand fwd and while supply may be a bit thin with some particular models, it is not a main cause for sales slow down.

    Maybe this is a regional issue, but here in LA, dealers, at least those I drive by, have plenty of inventory.

    High unemployment in states such as CA and NY are much more to blame for sales slowdowns than the alleged inventory issue. That problem is getting worse, not better.

  • avatar
    Autosavant

    “PeteMoran :
    September 19th, 2009 at 9:01 pm

    @ Autosavant

    “Depreciation” and “write-off”, are financial terms you ought to learn about.”

    I have known these terms for more than three decades, and know them far better than you ever will, trust me.

    Depreciation allowed me to pay $10k for a “Magnificent 7″ thatr sells for over $100k new, and mine drives just as new, and had it for over four years now.

    The ones who needed to know about these terms are, apparently, the owners of the clunkers, who only realized that some of them were depreciated, only when the idiots in DC robbed ME, the taxpayer, of $4,500 per vehicle to bribe them into crushing their allegedly depreciated clunkers.

  • avatar
    rnc

    AutoSavant –

    The whole point of cash for clunkers was to stimulate auto production by taking the cars off the road (not just the new cars sold as part of the program, but the eventual replacement of the cars junked). Taking into account that they were given $4,000 (average) for cars (and had the option of just trading if so desired), apparently the owners felt that they were receiving fair value.

    In terms of your third world country dumping scheme, alot of those countries are starting to ban or severly restrict importation of said type of cars traded under this program (they don’t want our enviromental mistakes dumped on them: see mexico).


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