January Car Sales Are A Disaster - So What’s New?

Auto sales were very weak in January, but this is a continuation of an ongoing trend. Overall sales are down 37% and were the worst since August 1982. Fleet sales were off 65% as the credit freeze slowed the sales of leased vehicles. Non-fleet sales appeared to be in line with recent months, implying we are near a bottom, if nothing else. Inventories are 94 days, which is 50% above normal.

Daimler Benz (DAI) sales are off 36%. Ford Motor Company (F) sales are off 42%, mainly due to a tired product line that we surveyed at the San Diego Auto Show.

General Motors Corp. (GM) sales are down 49%, with weakness in the SUV part of the product line. Honda (HMC) sales are off 28%, which is 11% higher that the market and shown why they are the best of the “Big-4″ automakers (Honda sources more of its content from the USA than even Chrysler).

Nissan (NSANY) sales are off 30%, which is better than we expect given the tired old product line the company has. Toyota (TM) sales are off 32%. We suspect sales are weak in the SUV part of the product line.

Summary: Get out there and buy a car. This is the time to do it. Do not worry about hybrids and electric cars leapfrogging gas cars and making them obsolete. High inventories and slow sales are the perfect backdrop to start “working the car lots.” We recommend going to Honda and Chevy dealers as a start, as they have the best overall products in the market according to many metrics we monitored at the San Diego Auto Show.

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