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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> 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.

  • Jonathan IMO the hatchback sedans like the Audi A5 Sportback, the Kia Stinger, and the already gone Buick Sportback are the answer to SUVs. The A5 and the AWD version of the Stinger being the better overall option IMO. I drive the A5, and love the depth and size of the trunk space as well as the low lift over. I've yet to find anything I need to carry that I can't, although I admit I don't carry things like drywall, building materials, etc. However, add in the fun to drive handling characteristics, there's almost no SUV that compares.
  • C-b65792653 I'm starting to wonder about Elon....again!!I see a parallel with Henry Ford who was the wealthiest industrialist at one time. Henry went off on a tangent with the peace ship for WWI, Ford TriMotor, invasive social engineering, etc. Once the economy went bad, the focus fell back to cars. Elon became one of the wealthiest industrialist in the 21st century. Then he went off with the space venture, boring holes in the ground venture, "X" (formerly Twitter), etc, etc, etc. Once Tesla hit a plateau and he realized his EVs were a commodity, he too is focused on his primary money making machine. Yet, I feel Elon is over reacting. Down sizing is the nature of the beast in the auto industry; you can't get around that. But hacking the Super Charger division is like cutting off your own leg. IIRC, GM and Ford were scheduled to sign on to the exclusive Tesla charging format. That would have doubled or tripled his charging opportunity. I wonder what those at the Renaissance Center and the Glass House are thinking now. As alluded to, there's blood in the water and other charging companies will fill the void. I believe other nations have standardized EV charging (EU & China). Elon had the chance to have his charging system as the default in North America. Now, he's dropped the ball. He's lost considerable influence on what the standardized format will eventually be. Tremendous opportunity lost. 🚗🚗🚗
  • Tassos I never used winter tires, and the last two decades I am driving almost only rear wheel drive cars, half of them in MI. I always bought all season tires for them, but the diff between touring and non touring flavors never came up. Does it make even the smallest bit of difference? (I will not read the lengthy article because I believe it does not).
  • Lou_BC ???
  • Lou_BC Mustang sedan? 4 doors? A quarterhorse?Ford nomenclature will become:F Series - Pickups Raptor - performance division Bronco - 4x4 SUV/CUVExplorer - police fleetsMustang- cars