Auto sales weren't so bad after all! we all agreed, shaking hands and congratulating the industry, feeling a bit smug (despite Toyota's walloping of all things American). And at first blush, it looked to be true: sales at Ford Motor Company (NYSE:F) were actually up vs. September 2005, 4.7%, and sales at DaimlerChrysler AG (NYSE:DCX) and General Motors Corporation (NYSE:GM) weren't down as much as many industry watchers feared.
That's all well and good, when you're looking at raw units sold. But Autoblog's John Neff went a little deeper and considered the way auto dealerships operate: in "selling days." September 2006 selling days were 26, vs. only 25 in September 2005. And if you know auto dealerships, the guys behind the desk are really looking at DSR: daily sales rate.
Were we all snookered into placidity by one of the oldest tricks in the car sales guys' book? Here's what John found when he looked at DSR instead of gross sales:
Ford was actually only up a tiny 0.66%, while GM and Chrysler showed much scarier numbers: GM down 6.8% (vs. 3.1% for gross vehicles sold), with DaimlerChrysler down 7.49% (vs. 2.3% gross vehicles sold). Toyota was (naturally) the only carmaker to escape the analysis relatively unscathed, with a 20.2% DSR increase vs. 25% reported sales increase.
Now, you might wonder if we're being too technical here. No! Not at all. Sure, the gross sales are what counts when you take your checks to the bank at the end of the month in hopes of paying your suppliers and your payroll and, oh I don't know? Debt service? Dividends? But as a method of evaluating the true prospects for the company (and that's the business we're in here at BloggingStocks), the DSR is the metric to watch.
So: watch out. Halloween may not be the only scary thing about the end of October.
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Reader Comments (Page 1 of 1)
10-05-2006 @ 3:43PM
Joe Dawson said...
Sales rates are one measure of performance
but the real story is in the profit end of the equation, If you were to look at Dealer profitability you would get a better
view of the ability of the manufactures to
get their products to market. When Dealers fail who will promote their products? More important why would they want to if unable to make a profit. The American
manufactures are bleeding there Dealers Dry