Summary
These are extraaordinary times in the auto business and may call for a new way to look at the sales data. What do car sales in 2009 have to do with car sales in 2008? Maybe less than you think.
Analysis
What do year-to-year sales comparisons in June mean when compared to a year ago. We think they do little more than confuse the public and, maybe more importantly, those who make their living in the retail automotive sector.
Last June gasoline prices had reached a level at which they dramatically changed the buying habits of U.S. consumers. The catastrophic drop in demand for SUVs also impacted used vehicle values. This too had an impact on new vehicle sales when their owners discovered they had far less equity in those vehicles than they did a few months earlier. Customers who might have been in the market for a new vehicle were keeping what they had.
In June of '09 we also had a set of factors that make it difficult to compare the data. J.D. Power and Edmund's estimates of the June SAAR were way off in predicting a SAAR of over 10 million in June.
Here also, there are extraordinary circumstances that must be taken into account. The SAAR that is most often quoted in the news combines retail and fleet sales. As a footnote it should be noted these fleet sales in '09 were diminished by plant closures at GM and Chrysler. We think comparing retail sales on their own would give us a clearer picture of what is happening in the consumer marketplace.
And we also have the "Cash for Clunkers" effect. Many retail customers are sitting on the sidelines waiting for the NHTSA to finally write the rules for this legislation.
Another point. Toyota and Honda were doing quite well last June. But the Fall credit woes took the wind of their sales along with everyone else's. So looking back to June '08, Toyota's sales in the same period this year look dismal. However, when we get to November '09, Toyota's 2009 sales will be compared to November '08 and the drop in volume won't look so bad.
If we could somehow find a report that compared retail only sales for June '09 to retail sales in May '09-then we might start to get a sense of what the consumer is thinking and how they are reacting.
