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Wednesday, July 15, 2009
SUSIE GHARIB: The scorecard for auto sales is still pretty bad. Sales in June were down again for the 20th straight month. Ford's drop was better than expected but the declines at General Motors, the new Chrysler and Toyota were worse than expected. Analysts say that while there is some stabilization in the auto market, the pain is not over. Here are the numbers. Ford sales fell 11 percent last month but the company sold more cars than its competition and says it's picking up market share. GE tumbled 33 percent as the company entered bankruptcy protection on June 1. The Treasury Department said today, that GM has until July 10 to get court approval to sell its assets. If that does not happen, the government will pull its bankruptcy financing. Toyota sales also fell by a third as consumers steered away from the company's once popular Corolla model. And sales at the newly formed Chrysler were miserable: down 42 percent. The company is still adjusting to life after bankruptcy as it deals with tight inventory and dealership closings.
PAUL KANGAS: While new car sales remain stuck in reverse, sales of used vehicles are driving higher as budget strapped consumers seek deals. Analysts expect sales of previously owned cars and trucks will show sizeable sales gains for June. Jeff Yastine has more on the rebound in used vehicle sales and why that could eventually bode well for new car sales.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It's a good time to be a seller of used vehicles. According to sales tracking firm CNW Research, sales of used cars and trucks jumped nearly 7 percent in April and almost 8 percent in May. And with that jump in demand, used vehicles are now commanding higher prices. Manheim, which auctions used vehicles wholesale to car dealers, says its vehicle value index rebounded sharply in the first half of the year. Manheim Consulting's chief economist Tom Webb says used car prices are a reflection of the auto industry's new car woes.
VOICE OF TOM WEBB, CHIEF ECONOMIST, MANHEIM CONSULTING: It's just a difference in the supply demand dynamics. There are no new vehicle sales going on, so dealers aren't getting trade ins. And their used vehicle retail demand has not fallen off. For some of them it's actually improved.
YASTINE: Webb says that sales trends also depend on the dealer and the location. At Carmax, the national retailer of used vehicles, sales were down 17 percent in its most recent quarter. But Chad Kays, purchasing manager for this Carmax location in Fort Lauderdale, says business is picking up.
CHAD KAYS, PURCHASING MANAGER, CARMAX FT. LAUDERDALE: Things have been very good lately. I think now more than ever customers are very careful in how they spend their money and want to make a good car buying decision. And I think buying a used car is a better value and you get a lot more car for the money.
YASTINE: Manheim's Webb says the gains in used vehicle sales are still being driven by the recession and the troubles at the nation's auto makers. But he says increased sales of used vehicles also reflect an improvement in consumer confidence, which means a rebound in new car sales may not be far behind. Jeff Yastine, NIGHTLY BUSINESS REPORT, Fort Lauderdale.
Labels: used car sales