US Auto Sales Coming With Free Rope (GM, F, TM, HMC)

On Tuesday, it won’t just be the first day of the month nor just the first day of the quarter.  It is yet another reporting day for new car and truck sales in the U.S. For Ford Motor (NYSE: F), General Motors Corp. (NYSE: GM), Chrysler and so forth.  In a move that is becoming all too familiar, The Big Three might as well just count Toyota Motor Corp. (NYSE: TM) and Honda Motor Co. Ltd. (NYSE: HMC) in there as these two are becoming larger and larger sellers in the U.S.

We have looked over the forecasts at Edmunds.com and seen forecast of The Big Three domestic  market share of 45.4% in June, which would be down from June 2007’s 51.4% but up from May 2007’s 45.3%.  Unfortunately it seems as though we are stuck with bad news for a whilein the US Auto sector.  As we noted over at Volume Spike, traders arestill betting against GM and Ford with options trading.

The latest individual estimates from Edmunds.com are expected to look grizzly:

• GM will sell 240,000 vehicles in June, down 25.2% from June 2007 and down 10.8% from May 2008.
• Ford will sell 181,000 vehicles in June, down 24.8% from June 2007 and down 15.2% from May 2008.
• Chrysler will sell 126,000 vehicles, down 31.2% from June 2007 and down 15.0% from May 2008.
• Toyota will sell 217,000 vehicles in June, down 11.7% from June 2007 and down 15.7% from May 2008.
• Honda will sell 147,000 vehicles in June, up 4.0% from June 2007 and down 12.8% from May 2008.

These ghastly numbers are even worse if you do not adjust for the fewer number of selling days on the calendar if you look at the table that Edmunds.com gives there. 

It seems that 52-week lows day after day (actually multi-decade lows now) aren’t any interpreted floors.   

Jon C. Ogg
June 30, 2008