Is It Really That Bad?

A scan of headlines recapping August vehicle sales would have many believing that the auto industry is headed off a cliff.

Here’s a sampling:

• Auto Sales: Worst August Since 1983 (CNNMoney.com)
• Auto Sales Crash in August (The Tennessean)
• 21% Drop in August Auto Sales Spurs Talk of Stimulus (Detroit Free Press)
• Auto Sales Fall as Economy Struggles (The Associated Press)
• August Auto Sales Cool Without 'Cash for Clunkers' Incentives (The Detroit News)

Sure, many automakers posted softer volumes than anticipated, and overall volume topped out at 997,468 — not the 1.03 million that analysts had been predicting. Toyota’s August sales figures were off 34% from 2009 and Honda’s were down 33%. For Nissan and GM, volume dropped 27% and 25%, respectively.

But comparisons with August 2009 seem unfair. You see, last August, consumers were buying vehicles like they were going out of style, thanks to the federal government’s “Cash for Clunkers” incentive program. In fact, August 2009 vehicle sales hit nearly 1.3 million units — higher than they had been since May 2008.

Light-vehicle sales volume for 2010 is still expected to reach about 11.5 million vehicles, 10% more than last year. And though last month’s figures fell below the one-million mark, August bested months like January and February, when volume hovered around 700,000 units.

Are we making a mountain out of a molehill?

Tags: august, light-vehicles, sales

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Comment by JJ Hornblass on September 2, 2010 at 1:04pm: Answer to your last question: yes.

Comment by Marcie Belles on September 2, 2010 at 1:05pm: Short and sweet.

Comment by Michael on September 2, 2010 at 1:40pm: More importantly, what are the days supply for each manufacturer? I have heard an exec privately complain that there is not enough product to match demand. August has historically been a slow month with model change over, prior model year sell off, etc. Once again, reactionary press for an information starved society.

Comment by JJ Hornblass on September 2, 2010 at 3:24pm: Michael, I hope you don't count us among the "reactionary." :)

Comment by Michael Duke on September 2, 2010 at 7:13pm: It's a little like the Bankruptcy stats before and after BACPA. There were over 2M consumer filings in 2005 and about 600K in 2006 after the new law went into effect. When 2007 was 822K, the headlines were that BK cases were up 35% over prior year (as opposed to down 60% vs 2005). Even with the terrible economy in 2009, there were fewer consumer BK cases filed than 2001-2005. But the headline was that filings were up 35% over 2008 and 130% vs 2006.

Comment by David Ruggles on September 3, 2010 at 2:36am: Tempest in a teapot!

Comment by Mike Whittiker on September 3, 2010 at 9:43am: I for one am ready for the drought to be over.

Comment by Marcie Belles on September 3, 2010 at 11:39am: Here are some inventory stats (days' supply), Jan. 1 vs. Aug. 1 (based on Automotive News data):

Chrysler: 58 (Jan.) - 55 (Aug.)
Ford: 60 - 57
GM: 52 - 57
Honda: 51 - 49
Hyundai: 63 - 32
Nissan: 53 - 46
Toyota: 42 - 51

Hyundai's inventories have been halved, while GM's and Toyota's are up 5 and 9 days, respectively. Everyone else has had single-digit declines.