Auto Sales Expected at 28 Year Low
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Auto sales in the U.S. are likely the slowest for the month in 28 years despite closeout deals designed to bring consumers into showrooms amid a worsening economic recovery, according to a report from Bloomberg.
The Bloomberg report compiled estimates from eight industry analysts and reached an annualized rate 11.6 million in August, which would mark the slowest August since 1982.
In the same month last year the rate was 18 percent higher at 14.2 million when the government “cash for clunkers” program was in full swing.
The deep discounts have not recently helped car companies draw in consumers, as discounts increased 1 percent and averaged $2,864 per vehicle in July, but sales fell in the month by 7 percent.
The auto industry is another market feeling the sting of sputtering economic recovery and rampant unemployment, similar to the weak housing market. In July existing home sales fell 27 percent as fear of a double-dip recession continue to grow.
The report sees sales at Ford Motor Co. (NYSE: F) falling 5.2 percent, despite a boost from the new Fiesta compact car, while General Motors Co. is expected by Bloomberg to show a sales drop of 19 percent in August ahead of its much anticipated initial public offering.
Chrysler Group LLC is expected to see a sales increase of 3 percent according to average estimates, boosted by increased deliveries to large buyers such as rental car companies.
GM increased discounts in the month 18 percent to $3,763 per vehicle, while Ford boosted incentives by 25 percent to $3,008 per vehicle, according to Bloomberg citing TrueCar.com. Chrysler still has the highest discount rate in the industry at $3,798 per vehicle, but has reduced incentives 22 percent from the same month last year.
The Bloomberg report compiled estimates from eight industry analysts and reached an annualized rate 11.6 million in August, which would mark the slowest August since 1982.
In the same month last year the rate was 18 percent higher at 14.2 million when the government “cash for clunkers” program was in full swing.
The deep discounts have not recently helped car companies draw in consumers, as discounts increased 1 percent and averaged $2,864 per vehicle in July, but sales fell in the month by 7 percent.
The auto industry is another market feeling the sting of sputtering economic recovery and rampant unemployment, similar to the weak housing market. In July existing home sales fell 27 percent as fear of a double-dip recession continue to grow.
The report sees sales at Ford Motor Co. (NYSE: F) falling 5.2 percent, despite a boost from the new Fiesta compact car, while General Motors Co. is expected by Bloomberg to show a sales drop of 19 percent in August ahead of its much anticipated initial public offering.
Chrysler Group LLC is expected to see a sales increase of 3 percent according to average estimates, boosted by increased deliveries to large buyers such as rental car companies.
GM increased discounts in the month 18 percent to $3,763 per vehicle, while Ford boosted incentives by 25 percent to $3,008 per vehicle, according to Bloomberg citing TrueCar.com. Chrysler still has the highest discount rate in the industry at $3,798 per vehicle, but has reduced incentives 22 percent from the same month last year.
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