Last week we got some signs of stabilization in automotive sales; this week there’s more good news. Transactions prices on new cars went up a whopping $2200 on average, according to JD Power and Associates, and incentive levels dropped. This reflects factors we’ve discussed earlier such as less inventory on dealer lots.
Two of the Detroit three did better as well: GM sales were up 5% and Ford 3%. Chrysler still languishes in the toilet though, down 30% compared to October 2008. Industry experts talk of the ‘annual selling rate’, which is a projection of what sales will end up for the year.
They’d been in the 9 million range—except during the artificial surge of Cash for Clunkers—and now the word is we’ll end the year with sales of just over 11 million new vehicles. While that’s a monstrous decline from the 16 million we did during peak years, it’s better than expected, and bodes well for the industry’s return to health. And, it (apparently) means that the Clunkers program didn’t ‘pull’ sales from too many following months—something that worried many. The bottom line was that October’s sales were almost the same as those from one year prior; and as they say, “Flat is the new black”.