Uptick In Auto Sales Expected

By: Associated Press
By: Associated Press

DETROIT -- The U.S. auto industry is likely to see a bit of a sales rebound in September over poor numbers in August, with an uptick in retail sales to individual drivers, a Barclays Capital analyst said on Monday.
Analyst Brian Johnson wrote in a note to investors that stronger retail sales would be offset by weaker sales to fleet buyers such as rental car companies. That's good news for automakers because they make far more money on sales to individuals.
But a September increase probably isn't a sign of an industry rebound. Johnson doesn't expect any big improvement in auto sales soon.
"We continue to expect sales to remain around current levels for the remainder of 2010," he wrote, adding that he is sticking with his forecast of 12 million in sales for next year.
He wrote that the sales rate for September, when projected for a full year and adjusted for seasonal variations, should be 11.7 million cars and trucks, up slightly from 11.5 million in August.
The seasonally adjusted sales rate for retail sales, though, should be in the mid- to upper 9 million range, he wrote. That would make September the best retail month in two years except for August of 2009, which was artificially boosted by the government's Cash for Clunkers rebates. The numbers will be far higher than last September, which was a depressed month because Cash for Clunkers drew out buyers who would have otherwise waited until September.
All automakers report their U.S. sales figures on Friday.
The good news for the industry is that the average sales price per vehicle continues to rise, meaning more profits for automakers. It also means consumers are paying more for their vehicles. Some analysts have said that sales remain low because buyers have fears about their jobs and the overall economy. Many who can buy are staying on the sidelines waiting for automakers to give better deals.
But most automakers, with their costs dramatically lower than in previous years, are making money at the current sales levels and are reluctant to offer better deals.

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