The August Scare
A press release, issued last night by Edmunds, had a devastating effect on Toyota. As the Tokyo bourse opened, the TMC share sunk to a fresh year-to-date low of 2,890 yen. In the afternoon session, it recovered a bit, but not much, to close at 2,941 yen. Ooops. In the beginning of the year, the ToMoCo share traded above 4000. What were the horrible news?
Edmunds forecasts that August U.S. sales will be a big downer. 17.7 percent below August 2009. Waitaminute, will you say, wasn’t August 2009 cash for clunkers month? Sure was.
“Comparing to last August is not meaningful since Cash for Clunkers distorted the market so badly last year,” said Jessica Caldwell at Edmunds. “It is likely that the current slow sales pace can be partly attributed to the thousands of ‘pull-ahead’ sales that last year’s CARS program stole from subsequent months.”
But there is another bit of bad news. Japanese car makers will do much worse in August, says Edmund’s crystal ball. They see Honda at -27.6 percent, Nissan at -26.5 percent. Toyota is seen dropping by a whopping 28.3 percent.
Amongst the U.S. makers, Edmunds sees GM shrinking by 23.1 percent, Ford by 10.5 percent. Chrysler is seen increasing by 7.3 percent.
If it would only be August that is distorted by cash for clunkers, it would be a non-event. However, there is that nasty “uncertainty about the U.S. economic outlook in response to falling near-term economic gauges,” as The Nikkei [sub] puts it. Matters are made worse for Japanese automakers by “the yen’s appreciation to the lower-84 level against the dollar.”
If you think that’s only a Japanese predicament, think again. Edmunds predict that August’s Seasonally Adjusted Annualized Rate (SAAR) will be 11.8 million, up a bit from 11.5 in July 2010. Don’t expect a whole lot more anytime soon.
Says Edmunds.com Senior Analyst Karl Brauer: “Based on the pattern of previous recessions, new car sales should have recovered 71 percent from 2009’s low point, delivering a SAAR of 16.6 million units by this June. However, not this time — and the same factors depressing the recovery in auto sales over the past year are likely to continue for the foreseeable future, keeping sales in the 12-million unit range even through next year. “
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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That GM IPO is gonna wait a long time.
Toyota has been replacing the frames in those First gen Tundras. Bad rust proofing is to blame I believe. My friend considered getting his replaced. there are holes in the frame big enough to fit your finger through. But he just decided to replace the truck. with a chrysler. *gag*