Auto Sales Begin Recovery – Will It Last?
The automobile industry loves the cash for clunkers program. That program has sparked an interest in the sector for the first time in over a year. It seems that many people are taking the time to see if their vehicle qualifies for the program, and that means foot traffic in the dealerships. The program has shown clear positive signs, with better numbers across the board.
Satellite radio investors have been watching the auto channel with a keen eye. It is through new cars that Sirius XM gets their first opportunity to impress potential new subscribers with their wide variety of music, talk, and sports offerings.
July 2009 brought good news. Ford announced their first sales increase in over two years. Other auto makers reported improved metrics as well. The news is being treated as positive by the press, and some are even going so far as to say that the sales recession in the auto channel is easing. That’s the good news, but being who I am, I am compelled to offer the contrarian point of view as well. Let’s face it, annualized sales are still only at 10 million units, and the “better” numbers seen in 2009 are being compared to 2008. For those that follow SiriusBuzz, you will know that July 2008 represented the worst car sales since 1992. So while sales are getting better, they are being compared to a very low number to begin with.
The cash for clunkers campaign has given the auto industry a bit of breathing room, but we will not know if the sentiment of car buyers will have a lasting change in the absence of the program. For satellite radio investors, the program helps clear backlogged car inventory, and could provide a stabilized platform for subscriber numbers in Q3 and Q4.
Enjoy the good news, enjoy the sales, but carry some caution. If absent the cash for clunkers program, auto sales remain stable, investors can breathe a sigh of relief. The sub numbers can swing quickly when all of this catches up. The key is that the upswing not be followed by another downturn.
Position – Long Sirius XM, No Position Ford
Yeah but you fail to mention that July of 2008 Oil was at what? $147 a barrel? That would deter A LOT of people from buying.
friggen….
The reason for poor sales in July of 2008 does not really matter. The fact is that they were the worst in 16 years, and this July’s sales are being compared to a very bad number. The price of oil does not matter in this situation. Sales in July 2008 were very bad. sales in July of 2009 are a little bit better than that very bad.
Important also to note that the company is currently being managed to a run-rate of 9mm units . . . plus, considering the normal scrap rate and natural population growth, there is still a significant amount of pent-up demand in the consumer pipeline.
Jus put 2- New cars under company lease………………
No Sirius, No deal……………………
BTW.
any ‘little I can do’ to help …………………….”’My Cause”’……………………………
BTW…………IF Boo-Boo’s theory………..of the ‘Big Crash’
Happens…….I’m double for 60G………….cause this Co. Will make Cash……..I’m just tired of Pontification and Worshiping of the Product AND it’s virtue’s and the Myriad of conspiracies theories, true or not…………..Yes thanks for Sandra Mohr and Co. and TS and BM and everyone on this ‘sacred-site especially……………if indeed we did get the ears and eyes of the SEC et al………
Hallelujah!!
But this wasn’t the only Company that Got $4Q’d……….
Try the 10’s of thousands of dollars I lost when the “Best Prime Mortgage” Co I owned………..Thornburg went under cause of the BS.
Please No One ‘remind me that this site is only for Sirius’
I am Sorry in Advance for ‘Venting’
It is Good.
We the Investor has been 4Q’d.
I don’t care anymore……………Want My Pound of Flesh……………………………………
THE DOC
I heard and read all over the news today that they’re talking about 11-12 million run rate, and some even mentioned 13-14 million. Is that an estimate for 2009, or for a one-year period starting today? Any thoughts?
Either way, car sales are turning around fairly dramatically.
Cash for clunkers is a great program because it’s for the average Joe & Josephine. All the billions upon billions of tarp & stimulus money to help out the big Wall Street corps that got us into this mess, but what about Main Street? When this country sees that what is good for Main Street is great for Wall Street then we are going places. Yes I’m a Sirius stockholder & sub., but so you can assume I’m biased but I think this type of idea where you are taking gas guzzlers off the road also bodes well the environment & lessens are dependence on foreign oil. Other programs could be implemented besides CFC to get people to upgrade other items that help the environment & the economy. I truly believe the T. Boone Pickens plan has a lot of merit. This country w/ new techniques of getting & finding natural gas know has an abundance of Natural Gas which is by far the cleanest of all carbon based fuels. And if you were to convert the price of natural gas to a gallon of gasoline it would be less than half of CURRENT gasoline prices. Also it doesn’t need refined and a Nat. gas well can be drilled and ready for market in about a month. Best of all it would create domestic jobs & the money (Hundreds of Billions a year) would stay here and not sent over to foreign countries & families like the Bin Ladens. What so hard to understand about this simple idea. It’s not hard to understand but are political leaders don’t take enough stock in their own country, they take stock in what’s good for themselves.
I agree with you…just want to make one quick correction though. The TARP/stimulus money didn’t go to bail out Wall Street or the banks. One-third went to tax cuts for the middle class, one third to state and local governments for budget issues and to extend unemployment and insurance benefits, and one third for stimulus in the form of infrastructure and other related projects (most of which has yet to be spent).
Indeed, the banks and insurance companies did receive a lot of bailout money, but that was from a different stash. Small, but I think important point.
Sheeit…I take that back. The TARP did go to the banks, which was enacted under Bush. The stimulus, which I can’t remember the acronym for and which was enacted under Obama, is what I’m describing above. My bad.
Okay…I’m probably just talking to myself here, and you all probably couldn’t care less, but the stimulus was the American Recovery and Reinvestment Act. Thanks, Google.
Don’t get too comfortable with the”cash for clunkers” program.
The latest bill is stalled in the house and won’t go anywhere before the recess.
I’ll take my lumps.
This move above 50 cents should have made a lot of money for people.
I didn’t see it happening.
However,I caution all the cheerleaders, watch the profit taking on Friday.
It will give you an idea of where this stock will be a month from now.
For the Big Bad Booey:…hope we actually DO crash just one more time “Bah”……………Take Your Lumps ??, it’s about time…………….Hope you got your ca$h ready !!
The Cheerleaders…………………!!!
PS: the weight of (illegal) shorts has/is being lifted
Any one invested in Silicon Valley chips?
PXLW…………….Year LOW $0.36 (after a nasty RS) TODAY’s HIGH FOR THE YEAR………..$2.20…………….like I said before; we (SIRI/XM) are not the only ones under the tremendous weight…of illicit trading!!
Bah Bah’s shame, however, will ALWAYS be, IMHO, the little “cheery faces” posted, hoping we would go BK, or ridiculing the LONGS as we were yet relentlessly battered DOWN !!!; while always ‘espousing hope for a better day’, yet so degradingly attempting to criticize grammar and punctuation, if not someone’s alleged lack of business Prowse or Sense…………IF anyone ‘dared rebutt his opinion’.
Yet, even though, I won’t ‘totally forget him’
I hope once again his predictions are right, and for MY $$$, I do believe that this run up is just a final set up for one more big short redemption…………….of which I am putting it ALL I can in one probably last and cathartic time, cause as I pick up the THIRD LEASE for another ‘new clunker trade in’, I certainly know there ARE Sirius Options in every car……….and every iPhone, and ultimately, Every person w/an extra $20 bucks a/month to spare for QUALITY AND CHOICE……….of which we’ve opted to at least $100/mo………………..So What…….!!?
Can’t take it when You Die!!!
SIRIUS WINS AGAIN!!!
Wow! Where to begin.
Remember that there WILL be profit taking on Friday.
Where the stock closes on Friday will be an indicator of where it will be in the future.
Don’t get too excited.
The shorts are still out there. 😛
Finally, a shred of humility. And sound advice as well. See blah blah, its ok to be wrong. Admitting it is the first step.
Study it.
There is always a weakness.
BTW I “love” the shorts now that the playing field is being….
Leveled.
Hope you’re right about Friday.
But what if you’re wrong ?
Then I can’t add to my small number of shares…:(