A few days ago, you saw GM’s Dan Akerson start his slow climbdown from the 13 to 13.5 million cars GM’s crystal ball reflects as sold in the U.S. by the end of 2011. He told a German paper that “there is the danger of a new recession.” Asked whether he would still stick with his lofty projection, Akerson answered: “Currently, we maintain the forecast, but we think it will be the lower range of our prognosis.” Akerson receives cover for his tactical retreat from Edmunds, which today headlines:“2011 Sales Will Be Close To 12.9 Million.” Pretty close to the GM forecast, no? So what’s the problem? Wait until you read the rest of the story ….
The prediction comes from Jeremy Anwyl himself, CEO of usually right-on Edmunds. Looking forward, Anwyl is a little perturbed. He goes into a long analysis of the perils of consumer confidence, the stock market, “the Standard & Poor’s downgrade of the U.S. credit rating, some to fears of a domino-like cascade of European sovereign debt defaults, and some general fears of global economies slowing down.”
Then Anwyl takes his and our lifeblood to task, the Internet.
“As I noted in a previous column, we live in a world of 24/7 access to information. Thirty years ago, I would have come home in the evening and gotten my news in one 30-minute dose. This gave me time to absorb and put it into context. Today, news is everywhere. And to get eyeballs, there is every incentive for news outlets to emphasize an extreme version of the news. We – as individuals, as organizations and as a society – have not yet learned how to modulate this barrage of inflated information.“
“This also magnifies the effect of negative feedback loops. Even if the global economic fundamentals have not changed much in the last 30 days, the political antics and ratings downgrades have generated plenty of news. This news has hit the financial markets and this generates even more news. Next, the extreme gyrations themselves become news.”
“If it were just markets that bounced around, it would just be interesting, but consumers are part of this feedback loop as well.”
Look, Jeremy, this is the Internet, and people have the attention span of young puppies. So how many cars are Americans really going to buy? Anwyl thinks pent-up demand will be victorious:
“Most importantly, there seems a high degree of “need to buy” in today’s car marketplace. Consumers have deferred and delayed purchases: first from the recession and more recently from high prices triggered by the earthquake. Even a small slowdown in sales will push prices down quickly to normal levels – and even lower. There are good odds vehicle buyers will find enough opportunity in the market to keep sales at least as high as recent months. This may not be enough to result as high as Edmunds.com’s 2011 sales forecast of 12.9 million vehicles, but it should be close.”
Oooops. So it will be less than 12.9 million? But close? How close? Anwyl isn’t telling. Instead, he prunes a monster hedge:
“Things could still break either way. Recent reports on employment seem very mildly encouraging. Corporate profits are still strong. A positive effect of the fears raised in the last few weeks is that commodity prices have stabilized and even fallen. The fears that a U.S. debt downgrade would push up interest rate seem misguided, at least in the short term. And the financial markets may regain their footing.”
So what now? More than 12.9 million? Less than 12.9 million? The suspense is unbearable.
Best & Brightest: What say you? What is your end-of-year number for U.S. new vehicle sales? Whoever comes closest to the real number will get a one year free subscription to TTAC.