The September U.S. auto SAAR declined YoY to 17.8mm units versus 18.1mm last year but came in better than wall street's estimate of 17.5mm. The YoY decline came in spite of an increase in industry-wide incentive spending which soared to a record high of 12.6% of average transaction prices from 11.2% last year. Dealer inventory levels also ballooned at Ford and GM with Ford dealers now sitting on 80 days worth of inventory vs. only 68 days at this time last year while GM dealers are in a similar position with 79 days of inventory vs. 74 days last year.
Results by company were mixed with GM beating vs. wall street estimates, on much higher incentive spending, while VW was the biggest loser this month as it continues to suffer from it's diesel emissions scandal.
Meanwhile, car sales, down 19% YoY, continue to get absolutely hammered…
…as consumers continue to shift dollars into less fuel efficient light trucks which were only down a modest 1%.
GM's Chief Economist offered up some fairly rosy commentary on the future prospects of auto demand which drew a stark contrast with negative commentary given by Ford last month. GM's econ department seems to have a unique approach to analyzing economic data and concludes that all indicators "point toward strong industry performance…into the foreseeable future"…guess they're not terribly concerned about the stagnant labor participation rate or credit deterioration among their buyers?
GM continues to benefit from a strong U.S. economy. “Key economic fundamentals like a strong jobs market, rising personal incomes, low fuel prices and low interest rates continue to point toward strong industry performance,” said Mustafa Mohatarem, GM’s chief economist. “We think the industry is well positioned for a continued high level of customer demand into the foreseeable future.”
These comments come just 1 month after Ford struck a more cautious tone on their August sales call when they warned that auto sales had reached a "plateau."
"For the remainder of the year, we continue to see retail in the industry provide incentives still running at historically high levels, but down versus the record that we experienced in 2015. Looking ahead to 2017, we continue to see industry sales are strong, but at a lower level than this year."
"Sales have reached a plateau."
"It's just that we're no longer in a period where we have a lot of pent-up demand coming out of the financial crisis. So that's why, I think we use the term plateau"
"Comparisons for the rest of the year are going to be really tough."
Below are some of the specifics:
Ford: Total U.S. retail sales down 4% YoY while sales to daily rental companies declined 36% and overall fleet sales declined 21%. Inventory supply increased 18% YoY to 80 days vs. 68 days last year. The majority of the company's largest platforms all posted YoY declines: Fusion: -17%, Escape: -12%, Explorer: -12%, F-series: -3%.
GM: Total U.S. retail sales grew 0.3% while fleet sales declined 4%. Incentive spending was 13.1% of GM's average transaction price which was 0.5% above the industry average of 12.6%. Inventory supply also increased for GM dealers with days of supply up to 79 days vs. 74 days last year and 74 days last month. Sales for GM's largest platforms were mixed: Cruze: +8%, Equinoz: -29%, Malibu: +26%, Silverado: -16%, Sierra: -9%.
Fiat Chrysler: Total U.S. sales grew 3% with all of the growth coming from the company's Jeep (+12%) and Dodge (+5%) brands while the Chrysler (-22%) and Fiat (-21%) both declined substantially YoY.
Toyota: Total U.S. sales grew 1.5% with sales of the major platforms mixed: Corolla: +15%, Camry: -11%, RAV4: +9%, Tacoma: +35%, Tundra: +18%.
The post September US Auto SAAR Declined YoY Despite Surge In Incentive Spending To Record Highs appeared first on crude-oil.top.