November Car Sales Could Hit Pace Not Seen Since 2008

[KingNothing]

Yeah, too bad he won't answer my question, which makes all the difference. It's interesting to me because even zippy's article posted above doesn't actually state whether these sales figures are based on dealer-to-public sales or manufacturer-to-dealer sales. Contractually, dealers are required to take (and "buy") pretty much whatever the factory sends them. Then the manufacturers can claim record sales even while those same cars are still sitting on the dealership lot unsold.

When you see sales numbers, they're typically factory-to-dealer. You can add context to those numbers by checking dealership inventory numbers and the average time on lot for new cars at dealerships.

I don't have the numbers handy, but I've heard that the average time a car spends on the lot has been falling.

[devil21]

Then it's really not "sales" in the sense that it's an indicator of economic improvement for the public as a whole and therefore is a misleading metric.

[Jordan]

Then it's really not "sales" in the sense that it's an indicator of economic improvement for the public as a whole and therefore is a misleading metric.

Except it isn't because the days of inventory isn't changing dramatically up or down from seasonal trends. Days inventory is up like...13 days from last year, which given the upward trajectory in car sales isn't that earth shattering. Also, this year the automotive industry had quite a few refreshes in their models.

Finally, inventories start building up during this part of the year in anticipation of higher sales in the first and second quarter. So, no, this economic indicator is not at all misleading, it's just pointing to a reality that you and countless others are unwilling to accept.

[Steven Douglas]

So, no, this economic indicator is not at all misleading, it's just pointing to a reality an interpretation of reality on my part that you and countless others are unwilling to accept.

Fixed it for you.

[devil21]

Except it isn't because the days of inventory isn't changing dramatically up or down from seasonal trends. Days inventory is up like...13 days from last year, which given the upward trajectory in car sales isn't that earth shattering. Also, this year the automotive industry had quite a few refreshes in their models.

Still waiting for the proof of an "upward trajectory" and proof of these inventory figures you're claiming.

Finally, inventories start building up during this part of the year in anticipation of higher sales in the first and second quarter. So, no, this economic indicator is not at all misleading, it's just pointing to a reality that you and countless others are unwilling to accept.

The vehicles haven't been sold. No one has bought them. They're not sales. How hard is that to understand? Preach about green shoots once they're actually sold to the buying public. Until then it's just CNBC pump monkey nonsense from cherry picked "analysts".

[Zippyjuan]

Still waiting for the proof of an "upward trajectory" and proof of these inventory figures you're claiming.



The vehicles haven't been sold. No one has bought them. They're not sales. How hard is that to understand? Preach about green shoots once they're actually sold to the buying public. Until then it's just CNBC pump monkey nonsense from cherry picked "analysts".

Any links to show that "car sales" figures are sales TO dealers and not sales BY dealers? Figures on dealer inventories? Thanks.

This chart says it is "sales in retail market"- that would seem to be cars sold BY dealers- sales TO dealers would be the wholesale market (and it seems to also show "upward trajectory").
http://online.wsj.com/mdc/public/pag...autosales.html

[devil21]

Any links to show that "car sales" figures are sales TO dealers and not sales BY dealers? Figures on dealer inventories? Thanks.

I didn't post the article so it's not my job to prove a negative.

This chart says it is "sales in retail market"- that would seem to be cars sold BY dealers- sales TO dealers would be the wholesale market (and it seems to also show "upward trajectory").
http://online.wsj.com/mdc/public/pag...autosales.html

That's the problem. "Seem to be" isn't a metric.

[LibertyIn08]

http://blog.truecar.com/2012/11/27/n...2008-at-15-2m/

Chrysler and Ford Have Lowest Incentive Spend Since January 2003 and September 2002, Respectively

Incentive costs YoY in line with inflation.

November 2011 Inventory [Average Days to Sale]
November, 2010 - 53 Days
October, 2011 - 50 Days
November, 2011 - 48 Days

Source: http://www.truecar.com/static/refere...er_2011_v2.pdf

Average Days in Inventory
Nov-11 47 Days
Oct-12 54 Days
Nov-12 54 Days

Source: http://blog.truecar.com/2012/11/19/n...cle-inventory/

Almost all of that [very marginal, historically] increase in days can be linked to one manufacturer: General Motors. [http://jalopnik.com/5965170/how-will...-pickup-trucks as an illustration]

[Zippyjuan]

I didn't post the article so it's not my job to prove a negative.



That's the problem. "Seem to be" isn't a metric.

You did make the claim that the public wasn't buying them- that they weren't really sales. Can you support that claim?

[adams101]

What people don't realize about auto sales is they DON'T follow the economy in the direct sense nor can they "build them and they will come" with manufacturers. They follow 5 year patterns of buying because the average person buys a new car every 5 years. The average loan term is 60 months which also comes into play. The year 2007 was the most profitable year in many decades so a boatload of people upgraded their cars to new ones.

Also 2006 and 2005 were also booming years which are still contributing. The federal government dribbled this auto buying into 2008 with the "cash for clunkers" bailout of the auto industry. The current 0% interest rates to the lending industry are also propping up the industry.

This means 2012 was a shoo-in despite the economy as is part of 2013. Not that many people are going to "drive it until the wheels fall off" and many have changed from a 2007 luxury gas guzzler to a more economic solution. Many are getting out of these expensive gas guzzlers that made sense in a booming economy with cheaper gas.

I would not say the current car industry is in any way a reflection of a positive or healthy economy. In the same sense if the economy and currency crashed with unemployment doubling there would still be a rush of people getting out of more expensive cars into cheaper ones. Half the country would be rushing to downgrade their autos and debt is not a sign of a healthy economy.

Conversely later in 2013 and in 2014 even if the economy kicked into gear it could be flat sales for autos because the 5 year cycle is not reset. I also look for interest rates to rise by 2014 further damaging auto sales.