Edmunds: Strong Retail Demand To Drive July US New-Vehicle Sales
First Published Monday, 2nd August 2010 07:58 pm - © 2010 Dow Jones
Dow Jones NEWSWIRES
Edmunds.com said U.S. new-vehicle sales are expected to grow 8.4% from a year ago, with the car-shopping website saying the sales should be the highest since the Cash For Clunkers frenzy last August.
U.S. auto sales last July climbed to their highest pace since before the financial crisis, boosted by a rush of customers lured into showrooms by the federal government's Cash for Clunkers rebate program. That jolt should skew comparisons with year-ago levels in July and August. The industry reports its sales figures on Tuesday.
Edmunds on Thursday estimated the industry will sell roughly 1.1 million units in July, which has 27 selling days, one more than last year. The boost would result in a seasonally adjusted, annualized rate of 11.8 million units, up from 11.1 million in June.
"Retail demand for new cars this month has been the strongest of the year, even more than in March when Toyota launched an aggressive incentive campaign and other auto makers followed suit," said analyst Ray Zhou.
Five of the six top auto makers are expected to report increases this month, with only Toyota Motor Co. (TM, 7203.TO) expected to post a decline.
Nissan Motor Co. (NSANY, 7201.TO) is projected to report the largest jump in sales, 22%, while single-digit growth is seen for General Motors Co., Chrysler Group LLC and Honda Motor Co. (HMC, 7267.TO). Ford Motor Co. (F), the only U.S. auto maker to avoid bankruptcy protection during the downturn and the performance leader in the industry for some time, is expected to report a 13% increase.
The combined monthly U.S. market share for the Big Three auto makers is estimated to be nearly 45% in July, up from a year ago but down sequentially.
Analyst Jessica Caldwell said consumers are conditioned to think that the summer is a great time to pick up a deal on a new car. She said that bargain-hunting mentality is driving consumers to showrooms--even though deals aren't that generous this year.
Those comments echoed a report issued by researcher J.D. Power & Associates, which last week said deals weren't as strong as they have been in the past. J.D. Power added the recovery pattern for the remainder of the year is expected to be volatile, with the rate of recovery in auto sales likely to be slower than previously thought.
-By John Kell, Dow Jones Newswires; 212-416-2480; firstname.lastname@example.org