Ask The Best And Brightest: Year End U.S. Car Sales - What's Your Number?

Bertel Schmitt
by Bertel Schmitt

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.


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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  • Secret Hi5 Secret Hi5 on Aug 15, 2011

    What are TTAC editors' predictions?

  • Motorhead10 Motorhead10 on Aug 15, 2011

    I believe the GM 13.5 million forecast includes med- and heavy trucks in the United States. Only Feb - April were SAAR above 13 (peak in Feb at 13.4) and the balance of the year will be a challenge to get over 13 - nevermind make up for the 11.4 - 12.2 in the second quarter. We were 6.3 mil through June (7.4 through July). Difficult to picture the second half of the year being better than the first - especially if you believe (which I do) we start a new recession by the end of the year. My forecast hasn't changed since late 2010 - 12.5 million light vehicle.

  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
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