Deutsche Bank Said GM's YoY Sales In October Could Decline 50%, GMAC News Another Negative
Deutsche Bank commented today on the struggles in the auto sector. The firm said October U.S. light vehicle sales could annualize in the 11.0MM unit range, indicating year-over-year declines in the low 30% range and the first sub-12MM rate since April of 1983.
Deutsche Bank thinks General Motor's (NYSE: GM) year-over-year sales could potential decline in the 50% range in the wake of employee pricing expiring.
The firm said Honda (NYSE: HMC) will likely experience severe declines off of a difficult comp; and Nissan (Nasdaq: NSANY) sales will continue to decline after aggressive incentives in July and August. The firm's assumptions include relatively modest declines for Toyota (NYSE: TM), based on its aggressive incentive program in October.
Commenting on news that GMAC will only finance loans for customers with FICO scores above 700, the firm said it underscores capital constraints and said developments in the credit markets will have broad negative implications for auto sales in the months ahead. Deutsche Bank noted that in GMAC's last securitization, sub-700 FICO scores encompassed 38.6% of the overall pool, which was down from the mid-40s in prior securitizations. They also note that GMAC finances 45% of GM's retail sales.
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