The metal is moving more slowly this month, says J.D. Power.
U.S. car sales appear to be slipping a bit this month, according to preliminary dealer data, though the industry trend line is up from the first half of 2010.
But anticipate some dire reporting when the full month’s numbers hit the headlines, industry analyst caution, because makers will be making year-over-year comparison to August 2009, when the federally-funded Cash for Clunkers program fueled an otherwise dismal U.S. auto market.
Based on figures for the first half of the month, retail car sales are off “slightly” from July’s strong pace, reports J.D. Power and Associates. Excluding the fleet market – which has been propping up a number of makers, including some of the domestics – the Seasonally Adjusted Annual sales Rate, or SAAR, will slip to 8.9 million, compared with a retail SAAR of 9.2 million in July 2010, noted the California-based research firm.
Nonetheless, that can be seen as “showing relative strength,” according to Jeff Schuster, Power’s executive director of global forecasting. All the more so, in fact, considering that the industry has been showing unusual restraint when it comes to incentives, which were down 8%, during the first half of August, when compared to July.
But year-over-year sales comparisons look significantly worse, noted Schuster, the numbers down 22% compared to August 2009, when the Clunkers program – formally known as CARS, for the Cash Allowance Rebate System – was in full swing.
But, “if the distortion from 2009’s CARS program is removed,” the analyst said, “August 2010 is actually up about 14 percent on a selling day-adjusted basis, signaling continued improvement year over year.”
Working in fleet sales, August is looking a good bit better, in part because carmakers largely ignored the fleet market, a year ago, directing product to retail dealers.
Overall sales for the first half of August 2010 were down a more modest 15% compared to year-ago levels. And the latest figures are actually up compared to July when you work in fleet.
The uncertain economy is leaving analysts and manufacturers alike wondering what to expect for the full year.
“We’re building for demand, right now…rather than chasing volume,” Jim O’Sullivan, CEO of Mazda’s U.S. sales subsidiary, told TheDetroitBureau.com. The executive noted Mazda is cautiously stepping up production, but not taking the major steps it would were it not worried about the potential for a double-dip recession.
For its part, the early August numbers have led Power to lower its 2010 sales forecasts – from 11.7 million to 11.6 million overall, and from 9.4 million to just 9.2 million for U.S. retail car sales.
“Lower consumer spending—fueled by current economic conditions and a high unemployment rate—and lower incentive expectations are impeding the pace of the recovery,” said Schuster.