How Did Auto Sales Forecasters Do? Edmunds.com Nailed Industry Total

As expected, GM’s Employee Discount for Everyone program failed to jump-start monthly auto sales, like it did back in 2005.

GM’s actual August sales outperformed a forecast from Edmunds.com, which predicted on Aug. 28 that GM sales would fall about 27.5 percent in August from the year-ago month. In fact, GM sales were down 20.3 percent from August 2007, according to AutoData.

Edmunds.com also predicted U.S. light-vehicle sales would be down 14.4 percent overall. That turned out to be very close to the mark. According to AutoData, industry sales were down 15.5 percent.

Separately, Lehman Brothers auto analyst Brian Johnson had predicted U.S. industry sales would fall 19.2 percent.

The closely watched Seasonally Adjusted Annual Rate for August light-vehicle sales was 13.7 million units, versus 16.3 million units in August 2007, AutoData said. The SAAR means that allowing for seasonal trends, that’s how many light vehicles the industry could expect to sell in a year, if based on past performance, you could extrapolate a whole year’s worth of sales at the August SAAR.

Incidentally, “light vehicles” is the industry term for cars plus light trucks. “Light” trucks are pickups, SUVs, minivans and crossovers that are designed for private individuals, as opposed to a much smaller number of medium and heavy trucks that are built to be used as commercial vehicles. The automakers typically report sales and the SAAR both ways: “total industry,” including medium and heavy trucks, and “light vehicles.” As a point of reference, light-vehicle sales were about 16.1 million in 2007. Most press reports are based on light vehicles.
 
For the light-vehicle SAAR to fall from 16.3 million in the year-ago month to 13.7 million in August 2008 doesn’t seem like much reason for optimism. However, the latest SAAR was an improvement from July, which was only about 12.6 million. According to Johnson of Lehman Brothers, that was the first consecutive-month improvement in the SAAR this year, even though the year-ago comparison was down.

Johnson cautioned that’s probably not enough reason to expect the profit picture to improve for the car companies, since they were forced to give away generous discounts to stimulate sales. However, he thought some auto suppliers could benefit from an uptick.

GM unveiled the “Employee Discount” on Aug. 19. The program was to expire Sept. 2, but GM extended the deals through Sept. 30.