Edmunds: Brisk April Sales Could Be Flash In The Pan
Checking dealer transactions for the first half of April, Edmunds sees cars selling at a fast clip. Dealers are all smiles: Average prices are going up, cars are flying off the lot, and the “average days to turn” – industry speak for the time the dealer sits on a car until it moves – fell more than 10 percent since the beginning of April, from 58 days to 52. If the rest of April behaves similarly, Edmunds sees a seasonally adjusted annual rate (SAAR) of 14.1 million in April. Party time. The festivities could be premature, Edmunds warns.
First off, Edmunds.com projects a slowdown in the latter part of April that will bring the April SAAR closer to 13.1 million. Edmunds thinks that the current rush is a flash in the pan: “It seems there has been a rush of consumers anticipating a shortage, and most of those sales are likely behind us,” said Ray Zhou, senior analyst at Edmunds.com. “Inventories will soon get leaner, too, as production stoppages in Japan won’t allow dealers to restock as quickly, and that may cause some consumers to delay their purchases.”
Edmunds.com still projects 12.9 million new car sales in 2011, with a lot of hedging. “Even a moderate impact on production for Japanese automakers that lasts through most of the summer could lower new car sales to 12.6 million, and a more severe impact could push sales down to as low as 12.2 million,” said Edmunds.com Chief Economist Lacey Plache.
So there you have it. Pick any number you are uncomfortable with.
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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Edmunds has a terrible track record of prognosticating what is going to happen next with auto sales. Remember when they said that the clunkers scrap incentives in the US were going to lead to a sales plunge after that program was over? It didn't happen that way, and almost nobody called 'em on it.
Media forecasters love to say what they think will happen, but rarely are held accountable when they get it wrong.
Americans are starting to choose cars over trucks by a small margin, 51.7% to 48.3% in March, though trucks still haved the edge, 50.9% to 49.1% for Q1 2011. The F150 surged 42% from Feb to Mar, and drove Detroit 3 full size truck sales up 20% in aggregate, beating the whole industry, which was up only 16.7% The high price of gas does not seem to be having a dramatic effect yet.
Last thing I want in this economy is a new car loan. My wife wants a new Grand Cherokee but I don't want to be stuck to those payments for five years. Forget it and she can keep driving her older Jeep... Less to worry about should one of us end up unemployed.
I can't believe the panic I've seen in friends of mine over gas prices, but yet they have no problems spending insane amounts of money in bars for overpriced drinks and crappy food, night after night. He and his wife work together and hit the bars constantly. One less night a week (5 instead of 6) after work at the bar, and they've more than paid for ALL the gas they use that month, even at $5/gal. One of my other friends spends a ton of cash on sexcams, and yet he is looking to buy a tiny car he doesn't really fit into (6'4" and 250+ pounds) because gas is "too high". He wastes $3.00 a minute on the webcam pages, and says gas is too high?? LOL.