Why You Shouldn’t Be Too Excited When September Sales Are Announced
Yes, there is improvement. But there would be a bunch of asterisks involved, as well
According to Cox Automotive, September sales are likely to show a seasonally adjusted annual rate (SAAR) of 15.5-million units. Not only is that up over the 15.2-million SAAR achieved in August, but is the fifth straight month of improvement.
What’s more, the sales volume is expected to be down just 0.3% compared to the sales in September 2019.
Yes, down just 0.3%.
BUT (yes, a big “but”) September 2020 had two additional sales days compared with 2019. In addition to which, there was a Labor Day weekend in September 2020, and that’s certainly a period when—pandemic or not—dealers are dealin’.
Jonathan Smoke, Cox Automotive chief economist, says that as the industry moves into the fourth quarter there are some “headwinds ahead,” with factors including the end of the stimulus package including the extended unemployment package in July; the increase in the number of COVID-19 cases that are occurring as schools are starting back; and the political rancor in the U.S. that is roiling such that “the consumer will be bombarded with negative news for the next five weeks.”
Odds are, that isn’t going to make a whole lot of consumers want to go out and buy a new vehicle.
Charlie Chesbrough, Cox senior economist, notes that a problem facing dealers—which could lead to a decision that a potential buyer is going to have to be making—is that overall, the amount of 2021 models at dealerships right now is 3%.
Last year at this time, the number of 2020 models available was at 25%.
So does someone go into a dealership now and buy last year’s model or wait for the new ones to come in? This could have a big effect on whether people buy—or not.
Even though September may not be bad, let’s put something into perspective: according to Cox, the year-to-date sales number for 2020 is 10,260,719.
In 2019 that number was 12,757,759.
To be sure, September made things less bad. But it is hard to conceive of how -19.6% year-over-year is good.
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