Our "official" forecast for August sales is being released tomorrow. Not much has changed since I wrote about this a week back--still seeing industry sales coming in at around 11.8m SAAR. This is a bit higher than July and the highest sales level this year. Still it is disappointing. After all, this is the year-end clearance season and the deals have been getting better. But apparently they are not good enough to entice recession weary consumers into showrooms. (I know we are not technically in a recession but try explaining that to consumers.)
Incidentally, we are seeing fleet sales at about the same level as last month. Next month we will start issuing separate SAAR forecasts for fleet and retail. (I mention a while back why including fleet in the reported monthly sales muddied the waters when it came to inferring consumers demand.)
To break these numbers out, we have been conducting a historical analysis of the correlations between weekly consumer activities and monthly sales. (We use these correlations as the basis for our forecasts. Bet you though we were just guessing, didn't you?) I will probably post more on this later, but I was struck by the percentage of fleet business some manufacturers reported earlier this year. For example, in February Chrysler's fleet sales exceeded 55% of their total reported sales.
Sergio gets upset when this gets pointed out, but to me shows how Chrysler has really gone to school on their numbers. The incremental cost of consumer incentives is huge--in the tens of thousands of dollars. When you are treading water waiting for new product to arrive, meeting production needs through fleet sales vs. offering big incentives to consumers looks to be a smart move.
One last note on August sales. GM's sales/share looks to have dropped. Not great news when you are in the middle of an IPO.
One reason for the decline is inventory--or more precisely the lack thereof. My understanding is that GM's sales are balanced 50/50 between 2010 and 2011 models. This compares the industry ratio of 80/20.
Getting inventories helps keep costs in line, but it also can result in lost sales.