Posted on 08/05/2021 5:39:24 AM PDT by blam
The latest auto sales data revealed that in July, auto sales came in at a 14.75 million SAAR per Wards; while total unit sales in July declined by less than 1% sequentially to 1.288 million (from 1.295 million in June), when factoring in the seasonality adjustment, July US SAAR declined by about 4% sequentially (US SAAR was 15.4 million in June per Wards). The July SAAR came in just below the consensus estimate of 15 million.
Some more details: car sales were up about 4% yoy, SUV sales were up about 9% yoy, and pickup truck sales were down about 3% yoy. Pickups and SUVs as a percent of total units were 18% and 54%, respectively (vs. 20% and 52% in July 2020). Per Motor Intelligence, Ford sales were down about 32% yoy and GM sales were down about 3% yoy in July. Ford’s market share in July decreased yoy to 9% from 14%, and GM’s market share decreased yoy to 15% from 17%. According to media reports, production levels at Ford have been particularly impacted by the semiconductor shortages.
The standout category again was electric vehicles with with July EV sales up about 106% yoy, and hybrid sales up about 65% yoy, per Motor Intelligence. According to Goldman this was due in part to growing consumer demand for EVs and hybrids (as well as more EV/HEV models on the market) in addition to an easier yoy compare (given some areas where EV sales are particularly strong, such as in California, were experiencing COVID-related shutdowns in July 2020). Note that Tesla does not report monthly sales, and with its its dominant EV market share in the US, the EV data has a greater degree of estimation than the other monthly datapoints.
And while incentive spending per vehicles was down a record 37% Y/Y and 7% sequentially to just $2.5 per car, which was to be expected at time when new and used car prices are surging at record levels…
… what we found most interesting in the July data is that inventory at US dealers plunged sequentially to ~1.0 million from 1.3 million in June 2021, and down from 2.5 million in July 2020. This means that industry DOI came in at a record low 22 days compared to 25 days in June 2021 and 53 days in July 2020. Pickup truck DOI was 31 days (vs. 30 in June 2021 and 56 in July 2020), SUV DOI was 20 days (vs. 24 in June 2021 and 52 in July 2020), and car DOI was 19 days (vs. 24 in June 2021 and 55 in July 2020).
As inventories at dealers continue falling from already historically low levels, it will take a long time for inventory at dealers to return to normalized levels given the strong demand for vehicles coupled with ongoing supply chain challenges (particularly with semiconductor chip shortages, but also due to shipping constraints).
Additionally, given that the absolute level of auto sales was down only slightly mom to 1.29 million units, but inventory declined by about 300K, it implies that net supply into the market was lower in July (as inventory declined by about 100K units last month on a similar level of sell through).
Looking ahead, Goldman expects auto production issues “to persist in the near-term due primarily to chip constraints (but also due to shipping challenges, and rising COVID cases in some geographies), which could continue to weigh on industry sales.” The good news: the tide is finally turning and per company comments, automakers expect more chip supply later in 3Q and in 4Q as the semi industry began taking steps to add capacity in late 2020/early 2021 (it takes approximately 9 months to bring semi capacity online, on average, assuming there is clean room space) but supply/demand for chips will remain tight all year.
So as a result of low inventory, and the continued strong pricing environment, Goldman expects industry pricing to remain strong in 3Q.
The dealer’s lots in York (PA) are nearly empty, but mostly have used cars & trucks and trade-ins, for sale. Pretty sparse. My Jeep dealer tells me that thousands of new cars & trucks are parked in massive lots, waiting for chips.
I am seriously thinking of pulling the trigger on one of those side by sides they sell in front of Lowe’s for $8,000. My concern is that even those type of vehicles won’t be available pretty soon because of the challenges we’re having with the economy. Any thoughts from anyone?
FWIW, even small engine dealers are hurting. I’ve been trying to get my hands on a Honda ATV, but every dealer within 100 miles of me can’t keep them in stock. And when they do get stock, it’s a couple of models here and there.
“...and hybrid sales up about 65% yoy...”
Ugh. The brainwashing continues.
“Per Motor Intelligence, Ford sales were down about 32%...”
As a Ford Girl, this makes me sad. I AM in need of a new SUV or truck, but I won’t be buying it now. And trust me, I don’t want anything the least bit fancy, though I know even that is hard to find these days.
The daughter of a good friend)just bought a fully tricked out Ford F350, and I can’t believe the bells and whistles on that thing! We took it on a day trip, and it was really comfortable - very luxurious.
I want something I can get mud on and not worry about, as well as dings, dents and dog hair, LOL!
Our local Chevy and Ford dealer’s lots are practically empty of cars, but have plenty of trucks.
We went to some dealer’s lots here over the weekend to look at trucks.
It was shocking to say the least.
Many of those trucks cost more than I paid for the house!.....................
‘Sticker Shock’ is another reason I’m not buying. My Escape is closing in on 100K, and while I love her, she’s rusting out in all the wrong places. :(
My ‘Summer Car’ is my VW Golf. 2001, 53K, LOL! I love that car. :)
My fishing buddy tried to buy a new outboard engine.
The boat dealer told him that it would be a year until he could get one.
I work at a bank.
Trucks are going for a fortune everywhere. New. Used. Doesn’t matter.
Someone I know bought a pickup truck five years ago for about $70K. He didn’t use it much, so he just sold it to a car dealer for around $63 or 65K (can’t remember which). They were very eager to get it.
Must be so people who can't afford movers can move themselves when they lose their homes due to the economy tanking under Biden.
The prices are INSANE!...................
I sympathize greatly with you. I brought back my 2008 Ford E350XL from Africa and was hoping to trade it in on a new or just used Ford E350. But to my utter surprise and shock, they had gotten rid of the E-Series vans and replaced them with the Euro trash style Ford Transits. Everyone says the Transits drive wonderful, but there is no way that piece of plastic can keep up with the E-350.
I will keep my old beast and keep it going for another 250,000 miles, but I would have liked a newer one.
Fords only sells trucks and SUVs now.
“The boat dealer told him that it would be a year until he could get one.”
I imagine that boat dealer probably felt like he was stabbing himself in the chest to have to say that to a customer who was ready to put money on the counter. Hope he has a strong service and parts base to keep him in business or he won’t be there to sell that new outboard next year.
And not many of them...................
Maybe offshoring of production was foolish and myopic. Free Traitors should be punished and exiled.
Put a really high import tariff on all electronics and watch the industry come back to the USA WHERE IT SHOULD BE.
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