U.S. auto sales likely stalled in August on economy, Irene
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U.S. auto sales for August were projected to fall short of July's rebounding pace as consumer confidence sank, prospects dimmed for faster economic growth and Hurricane Irene ravaged the East Coast.
August vehicle sales, to be released Thursday, may have run at a 12.1 million seasonally adjusted annual rate, the average estimate of 14 analysts surveyed by Bloomberg. The pace averaged above 13 million through April of this year and dropped below 12 million in May and June before rising to 12.2 million in July.
J.D. Power and Associates put its SAAR forecast for July at 11.9 million units, saying demand dropped sharply in the second half of the month as consumers waited for bargains and bad weather took over.
"With the economic woes, summer vacations and Hurricane Irene taking center stage, August may be a lost month for vehicle sales," said Jeff Schuster, executive director of global forecasting at J.D. Power, in a statement. One bright sign: a small increase in the selling rate for retail sales.
Wells Fargo analyst Rich Kwas dropped his forecast for August's SAAR by 200,000 to 300,000 vehicles, to 12 million, because of Irene. Most of those disrupted buyers will be back in September, he said in a release.
Alan Baum, of Baum and Associates, said his forecast for a 12.2 million SAAR reflects an estimated 100,000 lost sales due to the storm.
Irene, which killed at least 40 people while leaving a trail of damage from North Carolina to Maine late in the month, interfered with auto deliveries in states that represent about 30 percent of the total U.S. sales, said Paul Taylor, chief economist at the National Automobile Dealers Association. Taylor also predicted some of the sales lost due to the storm may be deferred to September.
Tempered times
Tempered projections for output and job gains led the analysts in Bloomberg's survey to trim an average of 900,000 car and light truck sales from their estimates for this year and 2012.
The U.S. economy may grow by less than 3 percent through 2013, helping keep the unemployment rate above 8 percent during that span, according to the Congressional Budget Office.
Toyota Motor Corp. may report an 11 percent decline in deliveries, the average estimate of four analysts surveyed by Bloomberg. That would be the fourth consecutive monthly decline of 10 percent or more following March's tsunami and earthquake that disrupted production.
Sales may decline 25 percent at Honda Motor Co., the average of four analysts' estimates. That would be the fourth straight month where sales slid 20 percent or more.
General Motors Co. and Ford Motor Co. may report increases of at least 15 percent.
The August 2010 sales rate was 11.5 million.
Annual estimates
Concerns about the economy and financial markets are further delaying purchases put off during the recession and early recovery, said J.D. Power's Schuster.
He is among the 12 analysts surveyed by Bloomberg who have cut their full-year auto-sales estimates since the first quarter.
Deliveries may rise to 12.7 million cars and light trucks this year, the average of 18 analysts' estimates. The average estimate in April was for 2011 sales of 13 million light vehicles.
Industrywide deliveries may climb to 13.6 million in 2012, the average of 15 estimates in a Bloomberg survey. Of the analysts surveyed, 13 have reduced their estimates from earlier this year. The U.S. averaged annual sales of 16.8 million vehicles from 2000 to 2007, according to Autodata.
Confidence sinks
Confidence among U.S. consumers plunged in August to the lowest level in more than two years, the Conference Board said Tuesday. The group's index slumped to 44.5, the weakest since April 2009. Gross domestic product climbed at a 1 percent annual rate in the second quarter, less than previously estimated, the Commerce Department said Aug. 26.
GM's may have climbed 17 percent, the average estimate of seven analysts. Ford may report a 15 percent gain, the average of seven estimates.
Nissan Motor Co., whose better supply of parts has buoyed inventory levels above those of its biggest Japan-based rivals, may say deliveries climbed 18 percent, the average of four analysts' estimates.
Japanese inventory
Nissan began the month with 54 days supply of cars and trucks, according to Himanshu Patel, a JPMorgan Chase & Co. analyst. Toyota had 34 days supply of vehicles, while Honda had 27, Patel said in an Aug. 29 report.
"We believe Nissan is using that availability to drive aggressive sales promotions," Brian Johnson, an analyst at Barclays Capital, wrote in an Aug. 25 report.
Chrysler Group may say sales increased 16 percent, the average of six estimates. The automaker ran a "no payments for 90 days" promotion for some buyers of 2011 and 2012 Chrysler, Jeep, Dodge and Ram models during the month.
Vehicle prices may ease late in the year as competitors such as Toyota and Honda boost inventory, said Lacey Plache, chief economist at Edmunds.com, an auto-market researcher that has kept its estimates for auto sales at 12.9 million light vehicles this year and 13.9 million for 2012.
"Regardless of what's happening in the overall economy, production is coming back," said Plache. "This will bring some of these sales which have been deferred back into the market."
August had 26 selling days, one more than a year earlier.
From Bloomberg News and staff reports.
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