#October2011

We have been pointing it out for quite a while: Something counter-intuitive (and counter- conventional wisdom) is happening in China: While the growth of the general market is slowing down, it is at the expense of the Chinese brands. The foreigners are doing fine.

Nothing illustrates this better than the story of the two Gs, Geely and GM. In October, the growth of the Chinese market effectively came to a halt.

How did the two Gs fare during that braking maneuver?

Car sales in India got it under the chin in October. In October 2011, sales of passenger cars were down 23.77 percent, utility vehicles were up a hair at 0.41 percent, sales of vans decelerated by 17.57 percent.

The China Association of Automobile Manufacturers (CAAM) released its October sales, and they confirmed the rumors that they were nothing to write home about. Total automobile sales are down 1.07 percent compared to October 2010. Production rose less than 2 percent. Passenger vehicles still outpace the overall market, up 1.42 percent.

In China, rumors of empty showrooms during the important Chinese October holidays made the rounds. It must have been different showrooms than GM’s. GM China announced a fresh October sales record of 220,412 units. October sales across all brands of GM China were up 10.4 percent.

The surprising part is that SAIC-GM-Wuling jumped 19.2 percent year on year to a new record for the month of 111,957 units. It was this joint venture that had dragged GM China’s numbers down in the previous months.

US Car sales are up a solid 10 percent in October, and Automotive News [sub] has the October Seasonally Adjusted Annual Rate (SAAR) at 13.26 million. I need to hop on a plane to Tokyo, so I go with this number for the time being. 13.26 is pretty much the average of our analyst guesses. As for the Detroit 3, General Motors disappointed at 2 percent (and threw the analysts off), Ford and Chrysler came in as expected at 6 and 27 percent respectively. And how did our analysts fare?

Regular Vehicle Sales Japan October 2011

ManufacturerOct ’11Oc t ’10ChangeFYTD’11FYTD’10ChangeDaihatsu44128952.6%2,5785,364-51.9%Hino2,7941,62871.6%27,72424,07715.1%Honda36,35530,42219.5%314,810425,375-26.0%Isuzu2,9372,59713.1%33,61737,321-9.9%Lexus4,3082,068108.3%36,32829,81421.8%Mazda11,4576,09588.0%124,357159,803-22.2%Mitsubishi4,0632,50062.5%46,95561,859-24.1%Mitsubishi Fuso2,9311,88355.7%21,28920,6103.3%Nissan33,63125,37332.5%372,341442,894-15.9%Subaru5,7853,13884.4%62,11869,562-10.7%Suzuki6,0254,45035.4%64,92750,53528.5%Toyota122,208101,51820.4%935,8001,357,027-31.0%UD Trucks85546185.5%6,6386,951-4.5%Other14,13710,83630.5%165,396155,6126.3%Total247,927193,25828.3%2,214,8782,846,804-22.2%

Sales of new cars in Japan rose 28.3 percent in October to 247,927 units, the Japan Automobile Dealers Association reports today. For the current fiscal year (April-October), sales are still 22.2 percent in the hole at 2,214,878 units, compared to 2,846,804 units sold in the same period of 2010. The numbers do not include sales of separately reported minivehicles. The numbers are not a sign of newfound health. They are simply the effect of a comparison with a market that had crashed in fall 2010 after subsidies were withdrawn.

Analyst GMFord Chrysler SAARGeorge Magliano (IHS Automotive) NANA NA12.9Rod Lache (Deutsche Bank)5.5%4.1%24.0%13.0Itay Michaeli (Citigroup) NANA NA13.1Jeff Schuster (J.D. Power) NANA NA13.1Chris Ceraso (Credit Suisse)7.2%7.5%20.0%13.2Himanshu Patel (JPMorgan)NANA NA13.2Patrick Archambault (Goldman Sachs)8.7%6.5%35.0%13.2Adam Jonas (Morgan Stanley)NANA NA13.3Brian Johnson (Barclays)4.3%8.8%19.0%13.3Peter Nesvold (Jefferies)7.1%1.8%NA13.3Alan Baum (Baum & Associates) NANA NA13.4Jesse Toprak (TrueCar.com)4.7%7.4%33.0%13.4Jessica Caldwell (Edmunds.com)6.9%8.0%27.0%13.4Seth Weber (RBC)9.2%8.6%36.0%13.4Average6.7%6.6%28.0%13.2

Today, October new car sales will be announced, and they are expected to be good. Analysts polled by Bloomberg show rare unity: They expect a Seasonally Adjusted Average Rate of sales (SAAR) of 13.2 million on average, and the spread is only 500,000. Likewise, analysts agree that Ford and GM will each add around 6 percent in sales, whereas Chrysler will jump by around 28 percent.