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U.S. consumer confidence improved marginally for the third month in a row in September since a recent low in June, but remained at a dismal level compared with a year ago, according to The Conference Board Consumer Confidence Survey.
In addition, of the 5,000 U.S. households polled, only 1.5 percent said they planned to buy an automobile in the next six months, a Conference Board record low. However, that's not much worse than levels earlier this year, when the average price of gas passed $4 per gallon.
Don Esmond, senior vice president of automotive operations for Toyota Motor Sales U.S.A. Inc., blamed a lack of consumer confidence and the credit crisis for falling auto sales in September.
U.S. auto sales fell 26.6 percent in September versus the year-ago month, according to AutoData. That included a 32.3 percent drop for Toyota. Automakers are scrambling to provide the right mix of fuel-efficient cars and crossovers, as opposed to big SUVs, pickups and minivans, which are out of favor.
"If you look at September, it's (the problem is) not just model mix. Our bread-and-butter models, like Corolla and Camry, are suffering for lack of consumer confidence," Esmond said in an Oct. 1 conference call. On Oct. 3, Toyota announced zero-percent financing on 11 models, including the Corolla and Camry, through Nov. 3.
According to the Conference Board, households that said they intend to buy a used car accounted for 2.3 percent of respondents, and 1.1 percent said they weren’t sure whether they would buy new or used. Combining new, used and "unsure," that meant 4.9 percent of the households said they intend to buy an auto in the next six months. That was the lowest level since November 2007.
It seems strange, but the Conference Board's overall Consumer Confidence Index climbed to 59.8 in September, up from 58.5 in August. In September 2007, the index was 99.5, so confidence is still extremely low. The index is based on 1985=100.
The slight September 2008 increase is based on survey results that closed Sept. 23. Therefore, the survey closed after Lehman Brothers declared bankruptcy Sept. 15, but before the extent of the financial-industry crisis became widely apparent.
Lynn Franco, director of The Conference Board consumer research center, said in a Sept. 30 statement, "these results did not capture all of the tumultuous events in the financial sector this month, and until the dust settles a bit more, we will not know the full impact on consumers' expectations."
posted by Jim Henry
October 7, 2008 @ 5:30 am
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