By Dennis “Cos” Costa
On July 29th Edmunds.com released its forecast for July auto sales and the news was encouraging. Edmunds is expecting the strongest sales month since Cash-for-Clunkers just a year ago. For Sirius XM Radio (NASDAQ:SIRI) this can only be good news. With Sirius XM being so closely tied to the automotive industry’s recovery and their continued growth, due to their contracts with automakers to factory install their radios, continued stability in vehicle sales is welcomed by Sirius XM shareholders.
Edmunds sees July vehicle sales, including fleet, coming in at 1,064,00 units, an increase of 8.4% from July 2009, and an 8.9% increase from June of 2010. These numbers represent to Edmunds.com analysts that July’s Seasonally Adjusted Annualized Rate (SAAR) will be 11.8M, up from 11.1M in June 2010.
“July sales numbers should be the highest we’ve seen since last August’s Cash-for-Clunkers frenzy. Retail demand for new cars this month has been the strongest of the year, even more than in March when Toyota launched an aggressive incentive campaign and other automakers followed suit”
Ray Zhou, PHD, Senior Analyst for Edmunds.com
U.S. automakers’ market share for July is estimated to be 44.9%, down sequentially from 46.8% in June 2010 and up year-over-year from 44.3% in July 2009. July 2010 had 27 selling days, one more than July 2009. When adjusted for this difference, sales increased 4.4% overall from July 2009.
“Consumers have been conditioned to think that the summer is a great time to pick up a deal on a new car. The bargain-hunting mentality that reigns in the marketplace today, and automakers’ ads promoting the clearance of old inventory, are driving people to dealerships in search of deals which, frankly aren’t all that generous this year.”
Jessica Caldwell, Senior Analyst at Edmunds.com
Despite there being an actual lack of incentives available and deals being offered by automakers, the perception is still out there for consumers that these sales numbers are representing a demand for what the automakers are presenting at each given price point. Read More
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With Sirius XM’s (NASDAQ: SIRI) growth tied so closely to the OEM channel, it is prudent to dive into the June auto sales results that were released yesterday to see what they mean for Sirius XM. One of the biggest things to jump out at me when reading over the reports was the staggering increases in luxury brand vehicles which have higher penetration and conversion rates for Sirius XM. Out of all brands, Porsche was the biggest percentage gainer of them all, posting a staggering 137% rise in year-over-year sales for the month. Porsche was followed by Tata Motor’s (NYSE: TTM) Jaguar which posted a nearly 73% increase in sales and Land Rover which increased sales by 43%. Cadillac showed a 39% increase and Mercedes Benz showed a 25 percent increase. Non-luxury brands also showed heafty increases on a year-over-year basis with Dodge increasing sales by 66%, Buick growing by 52%, and GMC sales increasing by 45%. Clearly, the credit markets have improved and there is money out there being spent.
