September Auto Sales: Don't Expect Much Sizzle

Should analyst expectations prove true, September auto sales are likely to have been lackluster, continuing a now four-month-long trend. Overall demand for new cars and trucks, while better than a year ago, is likely to be lower than that recorded in August, itself an unimpressive month.

We'll find out for sure on Friday, Oct. 1, when automakers are scheduled to release September sales data. Forecasts call for total new-car sales, including those by fleet buyers, to be 936,900, a near-28% increase above September 2009 levels but 5.5% lower than August, according to online car-buying guide Edmunds.com. Retail sales are expected to tally about 757,000, compared to 817,000 last month.

Despite the slower pace, automakers haven't been eager to boost consumer purchases through increased incentives. Average manufacturer incentives are estimated at $2,595 for each vehicle sold in September, down $106, or 3.9%, from last month, and off $151, or 5.5%, from September 2009, Edmunds said.

Cautious Consumers

"Automakers seem to have accepted the current sales rate," said Edmunds Senior Analyst Jessica Caldwell. "Most seem reluctant to invigorate the market through traditional incentives programs or unload significant levels of inventory as fleet sales." Car companies' unwillingness to boost rebates and other forms of incentives means prices are likely to remain stable through most of October.

Auto sales are being hampered by cautious consumers who aren't keen on taking on substantial debt loads as the nation's economic recovery continues to languish. That caution was evident Tuesday in fresh data from the Conference Board showing consumer confidence dropped to its lowest level since February.

Among domestic carmakers, Edmunds expects General Motors' sales, at about 171,900 vehicles, to have fallen 7.1% compared to August. Further, it sees GM's share of the overall market shrinking to 18.3%, down from August's 18.7%, and much lower than the 21.2% recorded in September 2009.

Edmunds expects Ford Motor (F) to gain market share, despite a slight drop in sales compared to August. The auto guide is forecasting that Ford's corner of the U.S. auto market reached 16.4% in September, up from 15.9.% in August and 15.2% a year ago. It estimates that overall Ford sold about 153,300 cars and trucks.

A Six-Month Slide for Toyota?

At recall-riddled Toyota Motor (TM), Edmunds calls for the carmaker to have sold 142,700 vehicles, down nearly 4% from August, and 13.4% lower than year-ago levels. Should sales predictions hold true, September would mark the sixth straight month the world's largest automaker has sold fewer cars and trucks in the U.S. than Ford. The Japanese auto giant surpassed Ford in 2006 to take the No. 2 U.S. sales spot.

Toyota's September sales likely accounted for 15.2% of the market, a tick above August levels but substantially lower than the 17.2% it garnered in September 2009, Edmunds said.

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Among other major suppliers to the U.S. auto market, Honda Motor (HMC), Chrysler Group and Nissan Motors (NSANY) are each expected to sell fewer vehicles than last month but far more than they did in September 2009.

Combined, Detroit's Big Three -- GM, Ford and Chrysler -- are expected to account for about 45% of sales in September, up slightly from last month and matching year-ago levels, Edmunds said.

Edmunds' forecasts don't include sales of South Korean automakers Hyundai Motor and Kia Motors, which have made increasing inroads into the U.S. market. Together, the sister companies are expected to boost market share to 8.9% in September, the highest level on record, according to estimates earlier this month from TrueCar.com, a car-buying guide.

For the month, TrueCar estimates Hyundai and Kia sales will reach 85,000 units, a slight drop from August but a robust 60% gain compared to September 2009.