Looking at U.S. September Auto Sales ... Honda and Toyota are Coming Back Strong

Our prior two posts have covered the global auto situation and its travails due to excess industry capacity. We've made the point that foreign companies will be looking strongly to the U.S. for strengthened sales.

Toyota, Honda Race Back in the U.S. contains a forecast for U.S. September auto sales which are due to be reported Tuesday:

"DETROIT—Auto makers on Tuesday will report new-vehicle sales for September and are expected to show healthy growth. Market researchers such as Edmunds.com and TrueCar.com predict sales of about 1.1 million cars and light trucks, a rise of almost 11% from a year earlier.

But a close look at forecasts indicates that much of the gain is driven by two manufacturers: Toyota Motor Corp. and Honda Motor Co. TrueCar forecasts that Toyota's sales rose 33% in September and that Honda's rose 27%. That compares with depressed levels a year ago, when the two still were reeling from disruptions caused by the March earthquake in Japan.

Their Detroit rivals are on track for smaller increases. TrueCar sees Ford Motor Co. reporting a 1.3% rise, and General Motors Co. a 2.5% bump. Sales at Chrysler Group LLC are expected to increase 8%.

The difference reflects just how tough the competition is in today's auto industry. The Detroit Three have recovered from the auto crash of 2008-09 and now field lines of passenger cars that can go toe to toe with the best Japanese models. GM, Ford and Chrysler all gained market share last year.

But Toyota and Honda are clawing back. Toyota redesigned its Camry sedan, and Honda has a new Civic compact. A revamped Honda Accord is arriving in showrooms now. . . .

Overall, the industry has wind at its back, despite the uncertain economy, he says. Many consumers are driving older vehicles that they must replace, banks again are eager to lend for auto purchases and leases, and new vehicles are arriving with improved fuel economy, an attraction for buyers wary of $4-a-gallon gasoline.

"Right now, people have a lot of strong reasons to buy," Mr. Benstock says.

For Toyota and Honda, the arrival of updated versions of the Camry and Accord represent openings to keep growth high. Those models have been such big sellers for so long that there are millions of loyal owners of older Camrys and Accords to appeal to.

"There is a huge opportunity for trade-ins on old Accords," says Lacey Plache, chief economist for Edmunds. "There is a big base of owners to draw from."

She says the opportunity may not last long. Years ago, the Camry and Accord stood head and shoulders above their rivals. But now consumers have a wide selection of stylish and well-regarded models to choose from. Ford is introducing a highly anticipated Fusion midsize car, Nissan Motor Co.'s new Altima is near the top of the field with 38 miles per gallon on the highway and GM has a new Chevrolet Malibu coming.

"There's really not a horrible vehicle in this segment," Ms. Plache says."

Summing Up

It is now and will be for a long time to come a buyer's market in the auto industry.

On the other hand, for companies trying to attract that empowered consumer, it's going to be a head-to-head competitive struggle.

Not everybody will win everywhere. That's for sure.

In the final analysis, the U.S. market combined with emerging markets will provide the biggest opportunities and threats for all global auto industry competitors.

Over time global consumers will vote by buying the cars of their choice, and the industry's winners and losers will become clear to all.

In the meantime, we'll stay tuned.

Thanks. Bob.