The automakers reported July sales today. The SAAR adds up to a bit under 11.6M; somewhat less than expected.
Even taking into account all the caveats I have noted about using SAAR as leading economic indicator, the July sales performance certainly raises questions about the strength of the recovery. July is when the model year-end sales are kicked off. Recession weary consumers needing a new vehicle would presumably time their purchase to take advantage of summer deals. This certainly was the case for some buyers, but the numbers are anemic and show consumers still exhibiting an abundance of caution.
Aside from the poor sales performance, there are a few other notables:
1/ Chrysler incentive levels are down almost 25% from last year. (And sales are largely steady.) Sergio's fiscal discipline clearly in evidence.
2/ Toyota incentives almost double a year ago. (But still lower than the industry average.) July sales were OK, but with these incentives should have been better. Obviously some damage still lingering from the recall storm earlier this year.
3/ Nissan incentives hit a new high. (For them.)
4/ Another great month for Hyundai.
5/ Sales lower than expected for both GM and Ford. Some shortages of new models, and lower fleet sales are probably why.
Unless someone opens up the incentive spigot, I can't see any reason for August sales to be materially different than July. This means we will probably end the year with sales in the low to mid 11M range--with any any thoughts of an upswing put off until 2011 at the earliest.