Motor industry analysts reportedly predict a slowdown in US vehicle sales in August, a trend due less to high petrol prices than to a summer of heavily publicised discounts that thinned dealer lots and satiated consumers.
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The Associated Press said analysts are predicting a seasonally adjusted sales rate of around 16.9 million vehicles in August, down from a near-record 20.8 million vehicles in July – full-year sales for 2004 were about 17 million.
AP added that General Motors is likely to report the sharpest decline when automakers release sales figures on Thursday – GM was the first to let all customers pay employee prices in June and recently extended the deal until September 30.
According to the report, GM’s sales climbed 41% in June and 19% in July, a phenomenal pace that cleared out 2005 models.
According to AP, Burnham Securities analyst David Healy said that, by the end of July, GM dealers’ truck inventories were the lowest they’d been in a non-strike month for 10 years and added that the company was bound for see some effect in August.
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By GlobalData“The employee discounts enabled GM to clean out huge carry-over inventories of 2005 models effectively, but at the cost of pulling August-October sales forward into June and July,” Healy reportedly said in a recent note to investors.
Chris Ceraso, an analyst with Credit Suisse First Boston, reportedly expects GM’s sales to fall 7% to 9% this month compared to August 2004. In a research note cited by the news agency, Ceraso said GM will likely grab a 25% share of the US market in August, compared to 28% last year.
Other automakers will fare better, according to the report.
Merrill Lynch analyst John Casesa reportedly said Ford continues to draw customers with its employee-discount programme, which began in July. In a note to investors cited by the Associated Press, Casesa predicted Ford’s sales will be up 5% in August, thanks to a fatter inventory than GM, but Ford also is seeing some repercussions after July, when its sales rose 32%.
Ford spokeswoman Sara Tatchio told AP that the company hasn’t yet decided whether it will extend the discount beyond September 6, when it is scheduled to end.
Analysts reportedly predicted Chrysler will see a small increase in August after matching GM’s discount in July. AP noted that Chrysler has said it will continue to offer employee pricing on some 2005 vehicles indefinitely.
After losing market share to the Big Three throughout the summer, several foreign automakers that didn’t offer employee discounts – including Nissan, Toyota and Honda – should regain some share in August as their sales continue to rise, the Associated Press said. Casesa reportedly noted that Toyota is seeing especially strong demand for its Avalon sedan, its youth-oriented Scion brand and its hybrid Prius – Prius sales were up 92% in July.
But, AP noted, buyers weren’t necessarily attracted to fuel-efficient vehicles this summer, despite rising fuel prices. Ford’s F-series trucks saw record sales in July, and Healy reportedly predicted sales of gas-guzzling sport utility vehicles and pickups will be up 7% in August while sales of cars will fall 9% from a year ago.
“Oversimplifying only slightly, if it got wretched gas mileage, it sold out the walls, and it if was fuel-efficient, it’s still sitting on the showroom floor,” Healy told the Associated Press.
