August Auto Sales Results Will Be Mixed Bag, Analysts Predict
New vehicle sales numbers for August are mixed, analysts agree, with unit sales increasing thanks to an extra day of sales but industry’s SAAR or seasonally adjusted annual rate of sales continuing to drop, reports The Detroit Bureau. Charles Chesbrough, senior economist with Cox Automotive, suggests a trend may be emerging: “Unfortunately, the third time is not a charm here. Compared to May 2019, which had the highest SAAR this year, August is forecast to be the third month in a row with a slowing sales pace. The market may finally be succumbing to toughening buying conditions and satiated vehicle demand.” The SAAR in August 2019 is forecast to be 16.5 million, down from last month’s 16.8 million level and down from last year’s pace 16.9 million units. The additional sales days in August 2019 are contributing to the relatively weak SAAR forecast, given an increase in sales volume. Read more here.
Opinion: When Tariffs Go Up, Sales and Jobs Go Down
It’s simple economics — when the cost of producing goods goes up, sales go down. With a decrease in sales, jobs are lost, writes Cheri Fleming, dealer principal at Valencia Acura in a piece for the Santa Clarita Valley Business Journal. A 25% tariff on imported autos and auto parts would decrease annual auto sales by 2 million units, according to the National Automobile Dealers Association. That equates to a loss of 117,500 of the 1.1 million jobs at new car dealerships, which is an average job loss of 10% per dealership. While auto dealers in general support President Trump’s goals of modernizing U.S. trade agreements, trade actions such as new tariffs up to 25% on imported autos and auto parts would hurt the auto industry and consumers. New tariffs – impacting both domestic and international brands – would increase prices, stifle demand for new cars, and cost dealership jobs. Read the rest of Fleming’s column here.
Porsche Expands Subscription Service to Four Cities in U.S., Canada
Porsche is expanding its app-based vehicle subscription service to four new cities in the U.S. and Canada, deepening its experiment in flexible car ownership even as other automakers back away, reports Automotive News. The luxury sports-car brand of Volkswagen Group is adding Las Vegas, San Diego, Phoenix and Toronto to the pilot program it started in Atlanta almost two years ago. The price of its two-tiered monthly subscription service, Porsche Passport, will increase $100 to as much as $3,100 a month. Porsche Drive, a shorter-term program, has a four-hour minimum that costs as little as $269. Automakers are dangling subscriptions to try to reach younger consumers accustomed to streaming movies on Netflix or summoning rides from Uber, with mixed results. Read more here.
Raids Raise Possibility of Federal Racketeering Case Against UAW
Raids at the homes of some of the United Auto Workers' top leadership Wednesday amplify the possibility the federal government could assume oversight of the union under anti-racketeering statutes, reports The Detroit News. The case for federal oversight of a union typically involves criminal implications of current leadership, experts say. And a move to file a civil racketeering lawsuit would reflect the government’s belief that the UAW is corrupt and the situation has not improved despite a four-year investigation that has led to eight convictions, including former union officials and executives from Fiat Chrysler Automobiles. “This is the nuclear option,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. Read more here.
Deaths From Cars Running Red Lights Hit 10-Year High, AAA Study Finds
Deaths from drivers running red lights reached a 10-year high in 2017, according to a new study, reports USA Today. The number of people killed when someone plowed through a light reached 939 in 2017, the last full year numbers were available, according to the study by the AAA Foundation for Traffic Safety. That was up 31% from a low of 715 in 2009. And the fatalities in those red-light collisions increased for a fifth straight year in 2017. The study tracks anyone who was killed, including the driver, passengers, people in another vehicle or people outside the vehicle. "This is at least two people killed every day at the hands of drivers blowing through red lights," said Jake Nelson, director of traffic safety advocacy and research for AAA. Read more here.
Wells Fargo: Oregon and Auburn Collide in Texas
The first full weekend of the regular season will bring an intriguing non-conference matchup between the Oregon Ducks and the Auburn Tigers, which are meeting for only the second time in their storied histories. The Oregon and Alabama economies are both battling slower global growth and the rising uncertainty surrounding trade relations with China. Read the full commentary here.
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