Ask the Best & Brightest: What Will Be Monday's SAAR?
On Monday, U.S. manufacturers will announce – as much as they hate it – last month’s sales. It is expected that sales have dropped in December by “48 percent from a year earlier at Chrysler, 41 percent at GM and 33 percent at Ford,” based on the average estimates of analysts surveyed by Bloomberg. The oracles expect a likewise bloodbath amongst the Nipponese: “Toyota Motor Corp. may report a 40 percent slide and Honda Motor Co. may say its total was down 36 percent,” said Brian Johnson, a Barclays Capital analyst in New York.
The actual numbers reported by the manufacturers will provide fodder for the dreaded SAAR, which will also be announced for December. No, it’s not a disease that will wipe out China, although it might cause similar symptoms. It’s the Seasonally Adjusted Annual Rate for the month. It’s a statistician’s shorthand for “how many cars would we sell for the next year if people’s buying habits stay exactly like the last month?” For all we know now, the December rate will probably be the worst in insert-the-appropriate-timescale-here.
Bloomberg may have a bunch of analysts to ask. TTAC has the combined brainpower of the Best and the Brightest. So we ask you: What will be the December SAAR on Monday?
Some things to consider:
– Price of gas is way down.
All of this had (hopefully) been factored in by 10 analysts which Bloomberg had already asked. Here are their dreadful projections for the December SAAR disease:
Patrick Archambault (Goldman Sachs) 9.5m
Now B&B, place your bets: What will be Monday’s SAAR for December? Those who come closest to the official Monday result will be bestowed the coveted title of AFB&B (AbsoNSFWingly Best & Brightest.) Contest closes Sunday, January 4, TTAC system time.
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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9.95m When I went to get my Subaru oil changed last week and walked around the Cadillac lot while I waited. I showed the tiniest interest in a CTS and the guy threw the keys at me and told me to drive it, didn't even ride around with me or ask me for my last name. The Ford dealer I went to after that only had one salesman in the entire place and he didn't look interested in showing me the Escape and Flex I wanted to look at for my parents. Other than the service department at both dealers there wasn't a customer to be found.
Call me a pessimist - I'll vote for 9.0 million and more losses to come. When discussing large corporations it's useful to remember that their employees are also their customers. Maybe that's oversimplified but it's still true. So when BigAutoCo lays off employees or defers improvements in product or physical plant the people who would have been paid for those things have to do without. And since a new car is not a necessity (the same old one or a cheap used one will do) this is where the affected consumers cut back first. This further reduces auto sales and the cycle continues until the bottom is reached. Of course, the reality is that the situation is much more complex - but the same general rule still applies. Less income = fewer products purchased = less production = fewer workers employed = less income.