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Economy in Brief

U.S. Vehicle Sales Lowest Since 1998, Inventories Lower As Well
by Tom Moeller November 2, 2005

According to the Autodata Corporation, US sales of light vehicles in October fell another 10.0% m/m to 14.75M under the weight of higher gasoline prices and lower consumer sentiment. The decline was the third in as many months and dropped sales to the lowest monthly level since 1998.

Consumer sentiment dropped 3.5% (-19.1% y/y) last month according to the University of Michigan which indicated that current buying conditions for vehicles was especially poor.

In October, US gasoline prices dropped 6.4% versus the September average but prices were up 35.9% versus last year at $2.72 per gallon.

Last month's skid in vehicle sales additionally reflected payback from the earlier success of discount pricing programs. The average of sales during the last six months has been 17.20M, up 2.0% from all of last year.

As of September, strong sales had lowered inventories of US autos to the lowest level since late 2001 (-17.9% y/y). At 1.61, the inventory to sales ratio was roughly half the level in January. Inventories of domestic & imported trucks also was down 10.2% y/y though increases in August & September left the level up versus 2002 and 2003.

Sales of US made cars & trucks fell 12.0% (-14.3% y/y). Domestic truck sales dropped 14.0% (-22.8% y/y) and car sales fell 9.3% (-0.9% y/y).

The decline in sales of imported cars & trucks was limited to a moderate 2.7% m/m (-8.6% y/y) as sales of imported trucks rose 4.9% (-12.9% y/y). Sales of imported autos fell 6.1% (-6.2% y/y).

Import's share of the US light vehicle market jumped m/m to 22.5%, the highest monthly level since 1990.

Oil Price Volatility and U.S. Macroeconomic Activity from the Federal Reserve Bank of St. Louis can be found here.

Light Vehicle Sales (SAAR, Mil. Units) Oct Sept Y/Y 2004 2003 2002
Total 14.75 16.39 -13.1% 16.87 16.63 16.81
  Autos 7.32 7.99 -2.6% 7.49 7.62 8.07
  Trucks 7.42 8.40 -21.4% 9.37 9.01 8.74
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