All Eyes on Automakers

Monthly U.S. auto sales tallies are always closely watched, but Monday’s numbers will be especially interesting because they’ll reflect a full week of sales under the federal "cash for clunkers" program.

Automotive sales, of course, have spent the past year in a free fall, sending General Motors and Chrysler to bankruptcy court and Capitol Hill for concessions. Thousands of workers have been furloughed, bought out, retired early or laid off.

Here’s how drastic the drop has been: In 2007, U.S. consumers wheeled away in some 16 million new cars trucks. This year, the most upbeat forecasters predict total sales of – maybe – 10 million vehicles. That’s nearly a 40 percent drop in two years – meaning 40 percent less revenue for pretty much the entire supply chain and everyone connected with auto retailers.

So even if you don’t have a car company headquarters or factory in your territory, chances are a good number of your readers have a vested industry in the health of the auto industry.(After all, as taxpayers they now own a majority stake in GM!)

The automakers – including the U.S. units of transplant and overseas companies, report monthly sales a day or two after the last business session of the previous month. Autodata Corp., an information service for the industry, posts the release calendar and year-to-date figures free of charge on its Web site.

The June tally is up now; take a look to make sure you understand the terminology. First you’ll see the year-over-year results – last June compared to this June, in raw numbers and in percentage-point change. (Those are the negative numbers in the third column, for most brands.) The next three columns are cumulative sales year-to-date, compared to the same period in 2008.

You also should understand SAAR – that is, the seasonally adjusted annual rate of sales, a measure of how many cars could be expected to sell in a year if the pace of the current month continues.

Autodata also provides an aggregated spreadsheet at the end of the day to some media outlets; the reports are a valuable shortcut in creating charts and info boxes. The firm has been inundated of late with media requests and might switch to a paid subscription, so don’t put away your calculator just yet. Meanwhile, a polite request to media@motorintelligence.com may just get you a coveted spot on their distribution list.

Another way to prep: Check out the company-by-company forecasts by industry watchers such as Edmunds.com; while not infallible, these predictions can help you get a feel for the story-du-jour in auto sales. Sometimes it’s external forces like the current rebate program; other months it’s the horse race for the No. 1 position or the dive in truck and SUV demand.

Individual company releases (sign up for them at individual automaker media Web sites or via PR Newswire – and do it today, not Monday) come in no particular order and trickle out after noon on the appointed date – leaving you the morning free to troll dealerships for retailer and consumer comments.

Check around today to see if you can sit in on (and video) the closing of a new-car deal Monday morning; hearing the voice of a consumer who decided to take the plunge – and the reasoning behind his or her purchase – will add quite a bit of human interest to what can seem like a dry numbers story. With billions of taxpayer dollars and hundreds of thousands of jobs at stake, car sales reports these days are anything but routine.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Car Stories that Sell

Automotive dealers got the final rules and regulations for the “cash for clunkers” program Friday, and already over the weekend hastily-produced local TV ads were exhorting buyers to take advantage of the deal.

In a nutshell, the federally sponsored “Car Allowance Rebate System,” as it’s formally known, offers credits of up to $4,500 to people who trade in older cars and trucks for more fuel-efficient new models. The credit applies to purchases, and even to auto leases of at least five years. Trade-ins can be foreign or domestic as long they’re less than 25 years old, be drivable, and average 18 miles to the gallon or less.

To ward off “flippers,” the new law also requires that trade-ins be registered to the new-car buyer for the past year. The program will be in effect until Nov. 1 or until the federal funding is exhausted. Complete details about the program are available at the CARS program Web site.

In a year where auto sales so far are hovering around a three-decade low and major domestic manufacturers are closing thousands of dealers, any jump start to car buying is noteworthy.

You might approach this from a dealer perspective and marry it with an update (and infographic) about the status of car retailers in your area. The National Automobile Dealers Association, a trade and lobbying group, also offers commentary, statistics and updates at its site. An interactive map purports to outline the economic impact of auto sales in each state; it’s worth a look.

Or, you could run a consumer affairs or personal finance story instead. There are a couple of caveats in the fine print of the CARS rules worth pointing out:

• Since the new law – predicated on fuel-mileage concerns -- requires the traded-in gas guzzlers to be crushed and scrapped rather than resold, consumers likely won’t get the standard trade-in allowance for their old cars. They’ll want to weigh the lost value against whatever level of CARS credit they’re eligible for.

• The credited amount might not be exempt from sales tax; depends on the laws in your state so worth a call to the treasury department.

• Many older cars – including the 1997 purple Ford Escort sitting in my driveway – won’t make the cut for the credit because they still get make pretty decent miles per gallon. Consumers can look up their car’s eligibility by using this calculator. It’s rather ironic that those of us responsibly driving fuel-sippers all along won’t be able to cash in on the credit, isn’t it?

• The credit must be applied against a new vehicle costing less than $45,000 – so luxury auto dealers probably aren’t going to yield the best CARS color for your story.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.