US Car Sales Disappoint

October car sales of 14.7 million were the lowest since August 1998, Deutsche Bank analysts have reported. “GM’s retail sales declined 30 per cent year-on-year; Ford’s retail sales declined 31 per cent; We estimate Chrysler’s retail sales fell 24 per cent. This was weaker than expected, and it represents much more of a decline than can be explained by pull forward,” they explained.

Auto manufacturers have admitted there is increased uncertainty when it comes to the outlook for the consumer. The analysts reflected this uncertainty when they said: “Based on the current production schedules for November and December, we estimate that GM would have to achieve a 27.9 per cent share of a 16.5 million unit market in November and December in order to maintain inventories at 1 million units.” But GM was not the only company the analysts were concerned about. “With 95 days in inventory, Ford’s production schedules also appears to be at risk. With market share slipping, mix deteriorating, and costs rising, we are increasingly convinced that a significant re-sizing of GM’s North American footprint is in the cards.”