• We expect the annualized light vehicle selling rate (SAAR) to run in a range of 10.0 – 10.3 million units in January, the midpoint of which would be about 34% below the year-ago pace of 15.4 million, and a little softer than last month’s pace of 10.3 million.
• Unit volume (selling day adjusted) should be down in a range of 35% – 37% versus January 2008, compared to a decline of about 35% in 4Q08. The seasonal factors are favorable this month, which explains how unit volume could be down more than the annualized selling rate.
• The industry faces significant sequential and year-over-year sales headwinds from lower daily rental deliveries in January. Demand from rental car companies is weak; but the decline in deliveries will be exacerbated by severe production declines in January as daily rent vehicles typically turn quickly from production to delivery.
• By maker, we see GM sales down in a range of 40% – 42% year-to-year, with market share dipping to around 22% or less, compared to share of 24.4% in December, and versus 23.9% in the year-ago month. We see the sequential decline in share as partly driven by fewer daily rent deliveries.
• We look for Ford sales to be down between 31% – 33% in January, with market share landing at around 15%, up modestly from the 14.9% share posted in December, and up from 14.1% in January 2008. The new F-150 should give Ford a boost relative to GM, as it has taken share over the last several months (though partly owing to clearing out the old model year).
• We expect the light truck mix to take a breather in January, declining to around 51%, from 52.7% in December. In addition to the average gasoline pump price edging higher this month, it is normal for the truck mix to decline from December to January.
• We think Big 3 inventories are likely to end January about 23% overstocked. Specifically, we see GM dealer stocks ending the month about 25% overstocked, and we see Ford ending January about 10% overstocked. This is consistent with our forecast calling for March-end inventories to be at or below normal levels at GM and Ford, based on deep Q1 production cuts.
• Based on our full-year sales forecast of 12 million units, we’re clearly looking for sales to ride an upward trajectory in 2009. However we don’t expect annual sales of 12 million vehicles to be enough to get the stocks working in this group. For more details see our 2009 outlook report from January 13, Sideways Is Not Good Enough; US Sales to Stabilize at 12.0M in 2009.
Don’t forget GM paying the price for all the January sales pulled ahead into November and December as a result of red tag sales.
Now that’s the Wall Street genius at work, justifying those huge bonuses and easy bailouts. No assembly plants running for most of January + sales usually booked as shipments to dealers = easy headline! Thank you CS FirstBoston for that in-depth insight!
Should that be Credit Suisse First Boston?
These are just estimates of course, and GimMe’s retail sales were down in the -40% range in December also.
Still I will re-itterrate a question I think is worth keeping an eye on-Will there be an anti-bailout consumer backlash aimed at GimMe and Cryslur?
Just a thought.
Bunter
All automaker sales are down.
My projection, January sales will be under 10M (annualized). Walking Dead Chrysler will be down greater then 50%, GM 40%, Ford 25%.
and Toyota down 35%, Honda 30%, Nissan 30% (I would expect similar results in January as in December)
Frankly I’m surprised how positive Charles Schwab is about January sales. With all the sales extravaganzas going on in December, I’ll be surprised to see sales that aren’t down at least 40% overall for the month. IMO, sales will gradually climb each month once the population acclimatizes to recession talk and bailouts etc., but January and February are going to be brutal. If the next two or three months don’t kill Chrysler, they might just have a shot (albeit a miniscule chance)at surviving.
Edmunds est. Unadjusted
Cryslur: -48
GimMe: -38
Ford: -30
Toyota: -25
Nissan: -28
Honda: -23
Industry: -30
IMO performace vs the average is important. I think those looking at the big numbers and saying “they’re all in the same boat” are missing some vital items.
Basically, if you beat the average the customers that are left are responding favorably to your products. If your under…figure it out.
In the last year Ford seems to have stabilized it’s market share.
The Welfare 2, not so much.
Keep in mind also, though Toy and Nissan have increased incentives some (Honda very little if any), they are gaining share with less incentives than those losing share.
These companies are obviously reaching the customer more effectively with their product.
Some thoughts.
Bunter
In the car business, you need a little luck. The continual bad weather in the northern tier of the US has got to be cutting sales for everyone. The problem with relying on the excess inventory to bail you out is two fold. First the factory has already booked the sale to the dealer (so it’s already factored into the bad news last year). Secondly, the dealers now have too much stale inventory that the buyers don’t want. Poor selling:models, colors, option pcks, etc. dot the dealers lots, (the better stuff picked out and sold during the fire sales last year). If you are chrysler and GM, where is the hot stuff buried in this mess that will restart sales? Notice that toyota and honda are advertising, we sell the cars that last the longest and hold up the best at resale time. They also sell the cars that exist the longest in the marketplace: camry, accord, civic, corolla.etc. They all go back perhaps 20 years and continue to be in demand with consumers. Compare that to: Astra, ford 500, aaviator, seville, deville, caprice, neon, lesabre, park ave, bonneville, etc. I think you get the picture.
Here is the correct link:
Business Week: “Can GM Make It?”
Definitely a MUST read, althought it has been said before.
http://www.businessweek.com/lifestyle/content/oct2008/bw2008109_718575.htm
Everyone’s sales are down. That is not news.
Bunter-
Why the continued slurs at Chrysler and General Motors? I believe the average reader gets your drift without resorting to name calling.
Just a thought
Bridge
Bridge2far-I guess it amuses me. I try not to use personal slurs and abuse but I must admit these corporations (which are not individuals, and therefore cannot be personally offended) annoy me.
Where their competitors have taken action (see Ford on reliability, finances, Toyota on management changes, various others) they have, IMO, tried to do the minimum that would work (in their eyes), failed, and are expecting others to clean up the mess.
I short, I view them with contempt and disdain.
Having been through a layoff from a failing company I sympathise with the individual worker…but not the company.
BTW, if you work for Cryslur or GimMe, or find yourself emotionally attached (a fan), please know it’s not personal.
Have a nice day.
Bunter
Bunter-
If it amuses you, then by all means continue as I would not want to rain on your parade. And no, I am not an employee of GM or Chrysler. Or Toyolet either. I have my own contempt and disdain issues. But towards different companies than you.
Have a splendid day,
Best wishes and regards
Bridge
One final thought about the schadtfreude that some use on the japanese brands to say they are just as bad off as GM Ford & chrysler. Not so fast; if one company loses 40% of the market and another 25% (GM vs Toyota), then didn’t toyota pickup market share even in a down market?