September’s Sales Report

Special to the Star-Telegram

Nothing could have been more interesting than all the commentary on how new car sales fared in September. Most discussed and agreed upon was the fact that new car sales last month tanked because the Cash for Clunkers program ended. Even franchised new car dealers vocally endorsed that statement in interviews on national networks and NPR. But there’s one small problem with that endorsement’s believability: New car dealers live in the present and the month just past; they rarely remember the how or why of new car sales one year ago.

One friend who owns a Chrysler dealership said years ago that he had no clue why his sales had fallen by 45 vehicles in a certain month, year over year. I had to remind him that the year before, he’d been selling Jeep Cherokees in amazing numbers because they came with a $4,500 cash rebate. Once reminded of that fact, he looked up his old financial statement to find that he had sold exactly 45 Cherokees the year before. Absent that rebate and the fact the Cherokee was discontinued, those induced sales weren’t duplicated in the same month of the current year.

It is true that in many cases September car sales laid an egg compared to August’s; and yes, overall sales were down 22.7 percent from September one year ago. But, since new car sales have fallen by 27.4 percent for the year, that actually means that last month’s sales rate was substantially better than those of most months in 2009.

So how did so many new car dealers and commentators get it wrong? Simple enough: They were comparing September’s sales to those in August. And guess what? For as long as I’ve been around the auto industry, September’s new car sales have always been horrendous compared to August’s. In fact, Milt Faigan, my first boss, told me when he hired me in 1973 that in the car business it’s always best to take a vacation in September, because from the 10th to the 20th customers will not be walking in the door.

There were many reasons, but primarily it was due to a serious lack of inventory of cars to sell after August’s close-out sales. Kids have started back into school, and back then new car introductions happened on September 21st. Ignoring his advice, I kept working — and I didn’t sell but one car in that 10-day September stretch.

Orders Dropped While Dealers Were Begging?

Likewise, the media and analysts focused on GM’s dramatic 45 percent drop in sales last month from a year ago. But GM still ended up with a 20.9 percent market share of all cars sold; given General Motors’ problems this year, that was more than acceptable.

The No.1 Kia dealer in America in August, in New York, sold almost 900 new vehicles that month. Then in September, they sold fewer than 70. So, if you compare August to September sales, it looks like the end of the world — only nationwide Kia’s September sales were up 24.4 percent from last September, and that’s a home run.

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