American Editorial: Huzzah! First Single-Digit Drop In 17 Months!

Bertel Schmitt
by Bertel Schmitt

Prepare yourself for an increasing number of „good news“ along the following lines:

„October U.S. auto sales should be down about 6 percent from a year ago, marking the first single-digit monthly decline since May 2008, industry forecasting firm J.D. Power and Associates said on Friday.” Glad tidings, brought to you by Reuters.

Times must be really bad when single digit declines are feted as an improvement.

In reality, things stay as bad as they have been all year. In September 2008, the bottom fell out of the light vehicle market. From now on out, monthly sales will be compared to hell.

September 2008 sales were 27 percent below September 2007 sales. October 2008 sales were 32 percent below October 2007 sales. Anything compared to that will look like growth. Hopefully.

J.D. Power can’t ignore that fact, but paints it in rosy colors: “While year-over-year comparisons benefit from a low selling base in October 2008, improvements in consumer confidence and credit are propelling the return to positive sales gains relative to last year,” said Power’s Gary Dilts. Positive sales gains relative to last year? Where? When?

Positive sales gains relative to last year are just around the corner.

TTAC is prognosticating that in January 2010, a huge turn-around will be feted. Why? January 2010 will be compared to the all-time nuclear winter type January 2009, when sales were a dismal 656,881 units. We are equally prognosticating that February 2010 will even be better. February 2010 compares with a February 2009 when light vehicle sales had cratered by 41 percent.

The Seasonally Adjusted Average Rate (SAAR) paints a more precise (and horrendous) picture. SAAR was below 10m for most of the year. It jumped to 13.7m in August 2009, with a kick in the butt by Cash-for-Clunkers. When the amphetamine wore off, SAAR was at 9.5m again in September. The way things stand, America will be lucky if the year will end a tad above 10m light vehicles sold.

Want really good news? Robert Farago had prognosticated (and wagered) that the year will end with just 8.5m cars sold. Prepare yourself for this headline:

”Car sales improve 17 percent over Farago forcast!”

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • BDB BDB on Oct 27, 2009
    ill he still be running against Bush/Cheney in Oh 12 You guys still b**ch about Jimmy Carter, an (at worst) slightly below average President who was elected thirty-four years ago. So expect to hear a lot about the fourth from worst President in American history for a little while longer (the only ones worse than Dubya being Buchanan, Andrew Johnson, Harding, and Hoover).
  • SCE to AUX SCE to AUX on Oct 27, 2009

    @psarhjinian: CFC, the bailouts, etc, are proactive measures. The alternative would be to metaphorically close your eyes, put your fingers in your ears, hum, and pretend that the loss of tax revenue and increased demand on the social safety net is due to a lack of moral fibre on the part of the unemployed. Gotta disagree with that last part. I was once unemployed, and it was only my fault to the extent that I chose to join a startup firm with a weak business plan. So I don't entirely blame the unemployed. Having said that, the increasing unemployment among UAW people is in part their collective fault, for constantly biting the hand that feeds them. Mostly, however, I would blame the death of the auto companies on management and their abandonment of the responsibility that comes with it - integrity, leadership, marketing, vision, humility, and backbone. Unfortunately, the middle class tax revenues used to governmentally-fund the continued misadventures of Detroit will never return, and so the middle class will end up poorer as a result. This was not investment; it was an expense. So while I understand the joy over a slowing descent, many planes have hit the ground while pulling out of a dive.

  • Carson D At 1:24 AM, the voyage data recorder (VDR) stopped recording the vessel’s system data, but it was able to continue taping audio. At 1:26 AM, the VDR resumed recording vessel system data. Three minutes later, the Dali collided with the bridge. Nothing suspicious at all. Let's go get some booster shots!
  • Darren Mertz Where's the heater control? Where's the Radio control? Where the bloody speedometer?? In a menu I suppose. How safe is that??? Volvo....
  • Lorenzo Are they calling it a K4? That's a mountain in the Himalayas! Stick with names!
  • MaintenanceCosts It's going to have to go downmarket a bit not to step on the Land Cruiser's toes.
  • Lorenzo Since EVs don't come in for oil changes, their owners don't have their tires rotated regularly, something the dealers would have done. That's the biggest reason they need to buy a new set of tires sooner, not that EVs wear out tires appreciably faster.
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