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With oil prices above $90, choppy stock markets, and
renewed economic concerns, the selling environment remains poor for new
light vehicle sales," Goldman Sachs analyst Robert Barry said ahead of
the October U.S. vehicle sales results due Thursday.
Oil's latest lurch
brought the price of a barrel past $93, striking fear in consumers over
what the relentless rise will do to the cost of gas. Add to that the
stock market's fluctuations and the housing slump and many prospective
new-car buyers have shied away from showrooms.
That has translated to some difficult times at dealerships across the U.S., particularly for Ford Motor Co. (F:Ford Motor Company Last: 8.95+0.45+5.29%4:00pm 11/02/2007 Delayed quote data Sponsored by:
![]() F 8.95,
+0.45,
+5.3%)
, where Barry told clients to gird for a 17% drop in unit sales from a year earlier.
He pinned most of the blame on the ailing car side, where the Fusion
and Mustang likely failed to bring an end to what could amount to a
fourth consecutive month of at least a 30% plunge in the segment.
Even the perennial
best-selling F-Series pickup has been broadsided by the housing crunch
and ramped-up product lines from General Motors Corp. (GM:General Motors Corporation Last: 36.99-0.26-0.70%4:01pm 11/02/2007Delayed quote data Sponsored by:
![]() GM 36.99,
-0.26,
-0.7%)
and Toyota Motor Corp. (TM:toyota motor corp sp adr rep2com Last: 113.00-1.45-1.27%4:00pm 11/02/2007Delayed quote data Sponsored by:
![]() TM 113.00,
-1.45,
-1.3%)
. More evidence of the flagship truck's struggles could be on the way.
Ford is the only domestic automaker yet to reach a deal with the United
Auto Workers, though the two sides are expected to sit down at the
bargaining table as soon as this week.
Barry said he's looking
for an October seasonally adjusted annual rate of sales (SAAR) of 16.1
million vehicles, roughly in line with last month and down slightly
from a year earlier.
He explained that more
incentive spending helped buoy the numbers as automakers tired to clear
out 2007 inventory to make room for the new lineups.
On a positive note, GM
rode another strong month for its new pickups and is poised to
outperform its cross-town rivals as well as the broader industry. Barry
said he sees a 2% improvement even as GM's fleet sales drop 11%.
Still, he's not
convinced GM will be able to rely on the strong demand for its new
trucks for much longer. "Robust pickup sales will be hard to sustain
given the backdrop of weak housing and new Chrysler and Ford product in
2008," he said in a note to clients.
Deutsche Bank analyst
Rod Lache was more sanguine about the prospects for October as he
called for a SAAR of 16.3 million vehicles, thanks primarily to a 6%
rise for GM and upbeat numbers on the car side from Honda Motor Co. (HMC:Honda Motor Co., Ltd. Last: 36.70-0.05-0.14%4:03pm 11/02/2007Delayed quote data Sponsored by:
![]() HMC 36.70,
-0.05,
-0.1%)
and Nissan Motors (NSANY:nissan motors sponsored adr Last: 22.85-0.80-3.38%4:00pm 11/02/2007 Delayed quote data Sponsored by:
![]() NSANY 22.85,
-0.80,
-3.4%)
.
Toyota (TM:toyota motor corp sp adr rep2com Last: 113.00-1.45-1.27%4:00pm 11/02/2007Delayed quote data Sponsored by:
![]() TM 113.00,
-1.45,
-1.3%)
,
however, is having a hard time improving on the string of strong
numbers it posted in 2006, despite its continued dominance in the
hybrid market.
The company has
reported three months in a row of year-over-year declines in the U.S.,
its first such streak since 1995.
Toyota's pristine
reputation for dependability has also been dinged lately, with a recent
study from Consumer Report helping to substantiate claims that the
domestics are making staunch reliability inroads. See full story.
GM and Toyota are in a close race for the title of world's biggest
automaker, with Toyota at the end of September giving up the lead it
took through the first half of the year.
Separately, now
privately held Chrysler, which just ratified its labor deal with the
UAW, is seen handing in a double-digit decline from last year due to
weakness in trucks.
Chrysler relies more on truck sales than any other major automaker.
"While Chrysler continues offer big incentives on many of its 2007
trucks, we think pickups might have ceded some ground this month,"
Barry said.
"New minivans also may be off to a slow start," he said. 
Shawn Langlois is a reporter for MarketWatch, and the editor of its community message boards.
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