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Auto Sales Stagnant, But Hope Appears

Signs of stabilization in second half of 2009

By Mark Huffman
ConsumerAffairs.com

April 29, 2009

• Auto Bailout Chief: GM's CEO Had To Go • Taxpayers Unlikely To Recover Full Auto Industry Investment • GMAC Changing Name to Ally Bank • New Car Sales Show Improvement From May • April Dismal For U.S. And Foreign Carmakers • Chrysler Files for Bankruptcy, GMAC Takes Over Financing • Auto Sales Stagnant, But Hope Appears • What Would a Chrysler Bankruptcy Mean For You? • U.S. Carmakers Getting More Federal Aid • GM Cuts More Jobs, Eyes China • New Car Sales Plunge in February • Car Buyers Seeking Higher Fuel Economy • Video: Do Women Really Hate Car Shopping? • GM Plans New Minicar, Electric Cadillac • GMAC Becomes a Bank • White House to Loan Carmakers $17.4 Billion • Chrysler Closing Car Plants for 30 Days • What Would a Washington-Designed Car Industry Look Like? • States Want Stronger Used Car Rule • Industry Troubles Cloud LA Car Show • Carmakers Get Neither Love Nor Money From Congress • Taxpayers Headed For Automotive Bailout • Time May Be Running Short for U.S. Carmakers • Feds Move Closer to Carmaker Bailout • New-Vehicle Buyers Turn to the Web in Record Numbers --- • More about Auto Sales ...

The auto industry continued to take its lumps in early April, with new-vehicle retail sales during the first 16 selling days of the month down by approximately 33 percent from a year ago. There is a glimmer of hope though.

J.D. Power and Associates, which gathers real-time transaction data from more than 10,000 dealerships across the country, says the market does show signs of stabilizing.

New-vehicle retail sales for the month of April are expected to come in at 668,000 units, which represent a seasonally adjusted annualized rate, or SAAR, of 7.8 million units. While that's down sharply from the same period in 2008, it shows little change from the February and March SAARs of 7.7 and 7.9 million units, respectively.

Total industry sales for April, including fleet sales, are projected to be 853,000 units, which translates to a SAAR of 9.7 million units.

"Industry sales are starting to show signs of stability — albeit at levels near 30-year lows — as the retail sales SAAR has been at or near the 7.8 million-unit level for the past three months," said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. "In spite of continued supply corrections, we remain optimistic that coming months will exhibit stability with a modest increase in the second half of the year, which is in line with our 8.5 million-unit retail and 10.4 million-unit total light-vehicle forecast for 2009."

J.D. Power estimates potential growth in vehicle demand of 20 million units during the next five years. This will be driven primarily by an increase in the number of households, consumers returning to the market with more vehicle equity in an improved credit environment, and an improved economy that will yield enhanced consumer options in the automotive market driven by new-vehicle launches.

"We expect market conditions to slowly improve during the remainder of 2009, which will lead us back to a solid industry with improved long-term fundamental growth," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates.

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