HALISTER1: PREVIEW U.S. SEPTEMBER AUTO SALES: Incentives Likely to Rise

PREVIEW U.S. SEPTEMBER AUTO SALES: Incentives Likely to Rise

(Bloomberg) -- U.S. Sept. light vehicle SAAR est. 17.5m vs 18m y/y, 17m m/m.
  • Earlier, Car Sales Slump Seen Overdone With Pent-Up Demand Being Released
  • See Bloomberg estimate chart
    • GM supply chain; Ford supply chain; FCAU supply chain
    • Bloomberg Intelligence primers for GM, Ford, Fiat Chrysler
ANALYST COMMENTARY
  • Goldman (David Tamberrino): Channel checks indicate incentives were increasing for small/mid-size SUVs/CUVs despite increased consumer preferences, suggesting incremental competition in the segment
    • Says average transaction prices (ATPs) down y/y, but to likely flatten as month closes out with increased pickup sales
    • Sees incentives down given higher up-front incentives at Labor Day sales events
  • JPMorgan (Ryan Brinkman): Sees industry sales to decline by -0.7% y/y on an absolute basis, given strong comps
    • Channel checks indicate incentives likely to rise in low teens y/y in Sept.
    • Still sees average transaction prices to rise y/y, helped by a richer mix of trucks and SUVs
  • Wells Fargo (Richard Kwas): Continues to believe additional production cuts needed to right size inventories
    • Supplier multiples compressed, but stocks to have tough time working until 2017 NA production estimates are reduced
  • TrueCar: Sept. auto sales expected to dip slightly but remain on pace for record year
    • Automakers still posting higher-than-average transaction prices with strong consumer demand for luxury and SUV vehicles
ESTIMATES
  • Big 3 ests.:
    • Fiat Chrysler: -5.1%
    • Ford: -8%
    • GM: -1.6%
  • Other ests.:
    • Honda: +1.6%
    • Toyota: +2%
    • Nissan: -1.4%
    • Hyundai/Kia: +0.1%
    • Volkswagen: -2.5%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
005380 KS (Hyundai Motor Co)
F US (Ford Motor Co)
FCAU US (Fiat Chrysler Automobiles NV)
GM US (General Motors Co)
7267 JP (Honda Motor Co Ltd)

People
David Tamberrino (Goldman Sachs & Co)
Richard Kwas (Wachovia Securities Inc)
Ryan Brinkman (JPMorgan Chase & Co)
Ryan Sees (JPMorgan Chase Bank NA)

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