Schwab the Deck; Black October on Its Way

Robert Farago
by Robert Farago

One of TTAC’s Best and Brightest sent us this little ditty from Credit Suisse re: U.S. new car sales for October. Needless to say, it’s a jug full of that sucks.

• We expect the October annualized light vehicle selling rate (SAAR) to land in a range of 11.5 – 11.8 million vehicles, the midpoint of which would be about 27% below the year-ago month pace of 16.0 million, and about 7% below last month’s pace of 12.5 million.

• We expect October unit volume (selling day adjusted) to be down in a range of 27% – 29% versus October 2007. The seasonal factors are slightly favorable this month (about 1%), which explains why our projected decline in the SAAR is not quite as deep as our projected decline in volume.

• We look for a modest decline in the truck mix in October, to about 49% from north of 50% in September, as much of the excess truck inventory has been cleared as automakers have cut production schedules and thrown big incentives at pickups, SUVs, and minivans.

• By maker, we see GM sales down in a range of 32% – 34% in October. Market share should suffer sequentially as GM experiences payback from its “employee discount for everyone” program that ran in August and September. We expect share of around 23%, down from 29% in September and 25% in the year-ago month.

• We look for Ford sales to tumble 33% – 35% in October, with market share bouncing to around 13.5%, up from about 12% in September (getting a boost as GM’s share comes back to earth), but down from nearly 15% in the year-ago month.

• We expect Chrysler sales to fall in a range of 32% – 34% in October, with market share coming in around 11%, down slightly from last month, and down about 80 basis points versus the year-ago month.

• Foreign brand sales should fall sharply in October as well, but will be supported by a 0% financing program at Toyota. We expect large sequential share gains for the foreign brands, to north of 52% from just under 48% in September.

• Assuming our sales forecasts are roughly correct for the month, we think inventories are likely to end October more overstocked than they were in September.

• Note that our year-end inventory forecast calls for overall improvement in dealer stocks between the end of Q3 and the end of Q4. But our year-end base case assumed a 13.0 million unit Q4 selling rate. To the extent the selling rate runs closer to 11 million units, fourth quarter production schedules at GM and Ford could be subject to further downward revision.


Robert Farago
Robert Farago

More by Robert Farago

Comments
Join the conversation
 2 comments
  • 50merc 50merc on Oct 28, 2008

    "we think inventories are likely to end October more overstocked than they were in September" It's time for a "pay what our CEO's pay for the cars we give them!" sale.

  • Jeremy cohn Jeremy cohn on Oct 28, 2008
    Foreign brand sales should fall sharply in October as well, but will be supported by a 0% financing program at Toyota. We expect large sequential share gains for the foreign brands, to north of 52% from just under 48% in September. saaaaaaved by zerooooo.
  • Rust-MyEnemy Whoa, what the hell is wrong with Jalop1991 and his condescension? It's as if he's employed by Big Plug-In or something."I've seen plenty of your types on the forums....."Dunno what that means, but I'm not dead keen on being regarded as "A type" by a complete stranger"" I'm guessing you've never actually calculated by hand the miles you've driven against the quantity of gas used--which is your actual miles per gallon."Guess again. Why the hell would you even say that? Yes, I worked it out. Fill-to-fill, based on gas station receipts. And it showed me that a Vauxhall Astra PHEV, starting out with a fully charged PHEV battery, in Hybrid mode, on my long (234-mile) daily motorway daily commute, never, over several months, ever matched or beat the economy of the regular hybrid Honda Civic that I ran for a similar amount of time (circa 5000 miles)."You don't use gasoline at all for 30-40 miles as you use exclusively battery power, then your vehicle is a pure hybrid. Over 234 miles, you will have used whatever gas the engine used for 200 of those miles."At least you're right on that. In hybrid mode, though, the Astra was using battery power when it wasn't at all appropriate. The petrol engine very rarely chimed in when battery power was on tap, and as a result, the EV-mode range quickly disappeared. The regular hybrid Civic, though, deployed its very small electric reserves (which are used up quickly but restore themselves promptly), much more wisely. Such as when on a trailing throttle or on a downward grade, or when in stop-start traffic. As a result, at the end of my 234 miles, the Civic had used less gas than the Astra. Moreover, I hadn't had to pay for the electricity in its battery.I look forward to you arguing that what actually happened isn't what actually happened, but I was there and you were not."Regardless, that you don't understand it appears not to have stopped you from pontificating on it. Please, do us all a favor--don't vote."You really are quite unpleasant, aren't you. But thanks for the advice.
  • Tassos Jong-iL Electric vehicles are mandated by 2020 in One Korea. We are ahead of the time.
  • 1995_SC Can you still get some of the tax credits under the new program?
  • Analoggrotto HyundaiGenesisKia saw this coming a long time ago and are poised for hybrid and plug-in hybrid segment leadership:[list=1][*] The most extensive range of hybrids[/*][*]Highest hybrid sales proportion over any other model [/*][*]Best YouTube reviews [/*][*]Highest number of consumer reports best picks [/*][*]Class leading ATPs among all hybrid vehicles and PHEVs enjoy segment bearing eATPs[/*][/list=1]While some brands like Toyota have invested and wasted untold fortunes into full range electric lineups HyundaiKiaGenesis has taken the right approach here.
  • EBFlex The answer is yes. Anyone that says no is just….. wrong.But the government doesn’t want people to have that much freedom and the politicians aren’t making money off PHEVs or HEVs. So they will be stifled.
Next