FCA, formerly Fiat-Chrysler, is the latest automaker to switch from a monthly sales report. Joining GM and Ford, beginning in October all three of Detroit’s big car companies will be publishing quarterly sales figures. The announcement comes at an auspicious moment.
As with the other two, FCA claims the change is being done in the name of transparency. Less reporting equals better information? Why not.
It probably has nothing to do with estimated April 2019 sales. The Census Bureau figures total light vehicle sales were the lowest in more than five years.
Americans bought cars at a 16.4 million annual rate last month, about the same rate as in early 2014. That was down more than 6% from March, the largest decline in eight years. So far in 2019, the pace of sales is more 2011 than 2014, though. That’s really not good.
Taking their cues from Jay Powell, Economists and car companies remain optimistic for a rebound anyway. Why? The unemployment rate. The unemployment rate. The unemployment rate.
Major automakers reported a [sic] weak U.S. new vehicle sales in the first quarter, citing a rough start to the year, but are bullish that a robust economy and strong labor market would encourage consumers to buy more vehicles rest of the year.
They’ve been making the same claim the last four years, ever since the middle of 2015 and Euro$ #3. Neither the economy nor auto sales have matched the expectations.
Still, if there is something which may have changed of late it is only to the downside. As auto sales, so, too, in the labor market. The unemployment rate is remains below 4%, of course, but all the other data strongly suggests deterioration across-the-board.
Weak spending on autos as well as everything else would be consistent with Americans seeing and experiencing conditions that are nothing like “a robust economy and strong labor market.”
This pertains to more than just autos, as Q1’s GDP report showed an unhealthy rise in inventory due to an unhealthy, broad-based slowdown in consumer and business spending. Even the FOMC admitted as much in its statement yesterday.
If they were so confident about the unemployment rate, though, why switch to quarterly sales reports? Nobody would ever admit to it publicly, that may not be the labor market number(s) they actually have in mind.