Contra Jesse Toprak, of TrueCar.com the apparent rise in US auto sales looks about right to me. Via Marketwatch
TrueCar.com analyst Jesse Toprak called the results counterintuitive, and said the overall numbers are shaping up to beat his relatively lofty targets.
”Housing and stock markets are still suffering, consumer confidence is down and gas prices are moving higher,” he commented. “That’s usually disastrous, but clearly the pent-up demand is there.”
General Motors Co. GM -2.11% on Monday posted a 19.8% surge in U.S. sales last month to 207,145 cars and trucks. The Detroit car maker said retail sales jumped 19% to account for 74% of the total sales volume.
What made me expect increasing sales was the BLS reports indicating increases in used car prices. Basically, the US has a rolling stock of autos. What you want to know is how tight that rolling stock is. Is there slack, are there cars sitting around which could be used but aren’t etc.
Used car prices tell you that. When they started rising in the mid single digits that was a sign that the rolling stock was finally starting to tighten. And, not unsurprisingly. The currently low new car sales rate was causing the vehicle fleet to age rapidly.
So, as consumers lose the opportunity to buy used cars, this pushes them into the new car market.
All that having been said the final word isn’t out and no one yet thinks we are hitting new auto sales highs. Still, the fundamentals look like accelerating sales through the end of 2011.
UPDATE: Calculated Risk reports the final SAAR rate at 13.1Million. A complete recovery from the tsunami.
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Monday ~ October 3rd, 2011 at 5:53 pm
Brian
Maybe people have simply been waiting for the new 2012 models and/or waiting to buy the 2011′s at closing model year discounted prices.
Tuesday ~ October 4th, 2011 at 9:39 am
Benny Lava
I remember Yglesias had a post over a year ago about car sales and how they were much lower than the typical turnover rate average in America. So this is an interesting update. You should look through Yglesias’ archives to find it, because it reminds me a lot of your housing stock argument.
Friday ~ October 7th, 2011 at 3:50 pm
Nathanael
There are more “old new” cars on the lots than I’ve ever seen in my life this year. Piles and piles of 2011s, 2010s, even 2009s.
Interestingly the cars on the lot are biased towards fuel-inefficient models — lots and lots of bloated pickups and SUVs. Small cars seem to go off the lot as fast as they arrive.
So I would ask the question of how retail sales are measured. How many of these are buying year-old or two-year-old new cars at deep discounts?
Saturday ~ October 29th, 2011 at 12:02 am
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