U.S. Auto Sales Skewed in September 2010

U.S. Auto sales for the month of September 2010 appear stellar at the first check under the hood, but a closer inspection reveals the big percentage gains over the prior year benefited greatly from the conclusion of Cash for Clunkers.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

(Tickers: NYSE: F, NYSE: TM, NYSE: HMC, Nasdaq: NSANY, NYSE: TTM, Nasdaq: TSLA, Nasdaq: SORL, AMEX: CVR, OTC: ZAAP.OB, Nasdaq: MOVT.PK, NYSE: AN, NYSE: KMX, Nasdaq: CPRT, NYSE: KAR, NYSE: PAG, NYSE: GPI, NYSE: SAH, Nasdaq: RUSHB, NYSE: ABG, Nasdaq: CRMT, NYSE: LAD, OTC: EVCA.OB, OTC: GNYS.OB, OTC: NEAU, Nasdaq: PSPF, NYSE: PBY, NYSE: AAP, NYSE: AZO, Nasdaq: ORLY, Nasdaq: PRTS, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ)

U.S. Auto Sales Skewed in September 2010

U.S. Auto Sales for September 2010 were reported throughout the day today. Automakers have easy watermarks to beat when comparing to the prior year this September, as last year's period was marred by the conclusion of the Cash for Clunkers incentive to purchase program. Cash for Clunkers had the effect of pulling forward US auto sales that might have occurred in September and the months that followed closely, as the program expired in August of 2009. Thus, if you were considering buying a car last summer, it's very likely you did it before August concluded. So when comparing this September's results, we need to also match against August of 2010, in order to gain perspective.

Ford (NYSE: F) looks to be the winner once again this month. Ford's results appeared magical when matched against the prior year period, soaring 46%, but it marked a less impressive 2% gain over its own August sales. That said, a 2% month-over-month increase is not horrible either. We are relatively certain that just about all of us would be pleased to generate such a rate of increase, especially in the current economic environment. It is also important to note that analysts were only looking for a 38% increase from Ford this September. Kudos to the Americanos! Cousin Iron Mike and South Philly Joe must be doing good work up there in Michigan. But, can anyone tell me why The Greek might talk the two Goodfellas up this season?

GM posted an 11% gain, but when you compare the cars it sells now against sales of those same models from last year (Chevrolet, GMC, Buick and Cadillac), then sales from ongoing operations rose 22% against the prior year mark. Still, GM missed analysts' estimates and was short of its rivals' growth as well. A much surer Chrysler group (than last year's version) managed 61% higher sales than last year, but to put that into perspective, we need to inform you that sales were just 1% over its August mark.

Toyota (NYSE: TM) reported an increase of 17% in its September US auto sales, driven by a 34% jump in truck sales. Toyota's news is a disappointment, as when matched against August 2010, sales were down 0.7% this month. Toyota seems recall happy these days, as its PR agents have it focused on being straight with the people and press. I suspect managers are overdoing it though, and the company seems to be losing market share still. We expect that with time, operations and media management will normalize, and its recall activity will moderate as well. Though I know my UAW buddies will have issue with this statement, I think the number of mistakes made should be about equal at Ford, GM, Chrysler, Toyota and Honda.

US automakers appear to be regaining lost market share from their important Japanese rival, with Ford gaining new ground as well. The biggest loser of the group might be foreigner Suzuki Motors, which posted a 68% drop in sales against the prior year. However, be careful in judging too quickly, because with demand rising in India and China, many manufacturers are shifting focus market focus to suit. This report only captures data on sales into the US market.

Nissan (Nasdaq: NSANY) posted a sales increase of 34%, driven by solid results across all its brands. Hyundai's September sales surged 47.7%. Honda Motors (NYSE: HMC) posted a sales gain of 26.1%.

When the final tally is in, economists expect aggregate September Domestic Vehicle Sales will measure 8.6 million (annual rate). That would mark an increase from August's 8.3 million rate, which was down from July's 8.7 million. Given the data thus far, The Greek sees 8.4-5 million more likely for September.



This article should interest investors in Ford (NYSE: F), Toyota Motors (NYSE: TM), Honda Motors (NYSE: HMC), Nissan Motors (Nasdaq: NSANY), Tata Motors (NYSE: TTM), Tesla Motors (Nasdaq: TSLA), SORL Auto Parts (Nasdaq: SORL), Chicago Rivet & Machine (AMEX: CVR), Zap (OTC: ZAAP.OB), MotivNation (Nasdaq: MOVT.PK), AutoNation (NYSE: AN), CarMax (NYSE: KMX), Copart (Nasdaq: CPRT), Kar Auction Services (NYSE: KAR), Penske Automotive Group (NYSE: PAG), Group 1 Automotive (NYSE: GPI), Sonic Automotive (NYSE: SAH), Rush Enterprises (Nasdaq: RUSHB), Asbury Automotive Group (NYSE: ABG), America’s Car-Mart (Nasdaq: CRMT), Lithia Motors (NYSE: LAD), EVCARCO (OTC: EVCA.OB), GeNOsys (OTC: GNYS.OB), Northeast Automotive Holdings (OTC: NEAU), Power Sports Factory (Nasdaq: PSPF), Pep Boys (NYSE: PBY), Advance Auto Parts (NYSE: AAP), AutoZone (NYSE: AZO), O’Reilly Automotive (Nasdaq: ORLY), U.S. Auto Parts Network (Nasdaq: PRTS).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.