August auto sales in the U.S. managed to fall short of July’s rebounding pace, reports Automotive News. The reasons for this were largely two-fold, according to experts: falling consumer confidence and the disruption caused by Hurricane Irene along the East Coast.
US economy still showing a frown
A Bloomberg survey of August automotive sales noted that tempered projections prompted automakers to cut back on car and light truck sales by 900,000 from estimates for 2011 and 2012. Cutbacks occurred in no small part due to projections that the U.S. economy as a whole may grow by less than 3 percent through 2013, with an unemployment rate just above 8 percent, according to the Congressional Budget Office.
Come on, Irene
In terms of August auto sales, the seasonal adjusted annual rate may run as high as 12.1 million according to 14 analysts who participated in the Bloomberg survey. That’s better than the sub-12 million figure for May and June but not as high as experts had hoped it would be.
Experts like Wells Fargo’s Rich Kwas anticipated a lack of sales for late August, partially because of Hurricane Irene. Auto deliveries were disrupted in key states like North Carolina, resulting in inventory cutbacks of nearly 30 percent, according to National Automobile Dealers Association chief economist Paul Taylor.
Alan Baum of Baum and Associates forecast 100,000 lost sales for the month. Both Baum and Kwas anticipate a return to form in September, however.
Slow growth ahead
Like most U.S. economic projections, the consensus is U.S. auto sales will get better but at an agonizingly slow pace, said Jeff Schuster of J.D. Power & Associates. J.D. Power cut 300,000 cars and light trucks from its 2011 sales estimate, and 600,000 of the same for 2012.
Consumer confidence hits two-year low
August consumer confidence slumped to 44.5, which is the weakest level on record since April 2009. A gross domestic product increase of a mere 1 percent for the second quarter is partly to blame; the U.S. Commerce Department had expected more.