By on August 15, 2011

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’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.




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8 Comments on “Ask The Best And Brightest: Year End U.S. Car Sales – What’s Your Number?...”

  • avatar

    In view of the economic facts as we have them before us now, my guestimate is 12.1 million by year’s end. That said, I think 2012 will be even slower unless some major economic actions occur that will stabilize the US economy, provide some financial certainty until at least 2015, and sees massive government debt reductions budgeted for the next 10 years.

    Only people with money, a source of dependable income, and a secure future are going to rush out and buy new cars. At the current state of affairs that is not the case with Joe Sixpack and Sally Homemaker who worry about just keeping it all together to the end of each month, meeting their mortgage payments, paying their bills and keeping food on the table.

  • avatar

    I’d be surprised if it cracks 12 million. Truly surprised.

    The next few years will be 11 million or maybe a tad less as the uncertainty and ineptitude of our elected officials sinks in to the average consumer.

    Used cars, however, now that’s a different story.

  • avatar

    Based upon a whopping 20 seconds of research, I’m going to take a SWAG and guess 11.4 million, combined fleet and retail.

    But that’s just a guess. If my guess turns out to have been too low, then I will speculate that it will have been fleet that made the difference.

  • avatar

    Keep on guessing. We are talking all vehicles, fleet and retail. We are indiscriminate ….

  • avatar

    we are 7 months in and averaging 12.6. On balance the japanese’s return looks like the thing that may push a bit higher so I’ll go with 12.7. It would be astonishing to be below 12 or above 13.5 come year end. Also, who are all these people with pent up demand? I haven’t met them. The ones buying used and driving up prices are still buying used even when sites like Edmunds predicted months ago that used prices were too high and expected droves to buy new.

  • avatar

    All the Japanese mfgs expect adequate inventories in the 4th quarter.
    Many are planing serious marketing campaigns, like Honda’s plan to reintroduce the new Civic. My best guess is that 12.9 will be reached.

  • avatar
    Secret Hi5

    What are TTAC editors’ predictions?

  • avatar

    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.

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