September sales for the U.S. auto market were expected to drop due to the end of the government CARS program, but analyzing current demand has proven challenging. The incentives that drew customers in during the voucher program accounted for huge sales numbers for the duration of the summer program, but left behind depleted inventories of new vehicles and a shortage of used vehicles.
Fewer choices are leading to fewer customers and reduced cash back incentives and dealer discounts. In addition, the summer voucher sales may include customers that might otherwise have purchased this fall.
Auto industry financial analysts, however, report that luxury car sales were largely unhurt by the CARS voucher program even though customers gravitated toward lower end models belonging to Ford, Toyota and Chevrolet.
The government voucher system, which was responsible for sales totaling around 700,000 units this summer, put a limit price of $45,000 on new qualifying cars which ostensibly excluded luxury vehicles.
The Department of Transportation reports that Cash for Clunker sales of the Ford Focus totaling 22,000 outnumbers all combined sales for Lexus, Mercedes, Acura and BMW.
With that in mind, auto analysts consider the luxury market a fairly solid indicator of whether or not the signs of recovery in the market will continue.
According to AutoData, by this time last year luxury auto sales had plummeted over 25% from August to September. Sales bottomed out in January 2009 and have not yet recovered to the levels reached in early 2008.
TrueCar.com chief analyst Jesse Toprak noted that luxury purchases in general, not just automobiles, follow the larger economic trends and the Dow Jones saw a 3% climb in September. He stated that any increase in luxury car spending may indicate a sign of broader recovery for the entire auto market.
Toprak recently predicted that dealer incentives and attractive lease deals from European automakers such as BMW, Mercedes and Audi combined with a general increase in personal wealth may add up to stronger September sales numbers.
Even with the increase, sales will not come close to what they were this past August, when carmakers reported annualized sales of 14.1 million. The number expected is closer to an annualized rate of 9 million to 10 million. August was the most successful month for automakers for the year and brought the first year-over-year monthly sales increase since 2007.
J.D. Power & Associates executive director of global forecasting, Jeff Schuster, said, “We see bounceback, but it will be at a gradual pace. The factories did get turned back on . . . and continued positive signals are coming out of the economy – that’s key.”