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Barclays on U.S. Autos & Auto Parts: March 2011 Sales

April 5, 2011 1:38 PM EDT
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Barclays on U.S. Autos & Auto Parts: March 2011 Sales

Barclays analyst says, "US sales of light vehicles remained robust in March at a 13.1mn SAAR (seasonally adjusted annual rate), down a bit versus February's 13.4mn, but still up nicely versus the 12.6mn in January. We estimate that March's retail SAAR declined from 11.1mn in February to about 10.5mn units last month, as GM (NYSE: GM) pulled back on its large incentive spending. This was partly offset by a higher fleet SAAR of around 2.6mn units in March versus 2.3mn in February, as commercial and government buyers continued to refleet. March sales didn't seem to be affected by the situation in Japan, but the tight supply of some Japanese vehicles is likely to prompt the industry to raise retail prices and limit deliveries to fleet customers, which could impact April and May SAAR."

"The incentives genie is back in the bottle, and industry pricing discipline should improve further in the coming weeks. In January and February, investors worried about the potential for a price war to spread in the US, as GM increased its incentives materially and gained some large share. As other players, notably Ford (NYSE: F), did not respond, and investors expressed their displeasure by punishing the stock, GM backed off in March and reduced incentives by more than $400 sequentially according to Autodata."

"Overall inventory levels are generally sufficient for April (even for Japanese OEMs) but supply of smaller cars is tight. The large Japanese automakers had between 39 and 54 days of supply as of April, but inventories of more fuel-efficient cars were much lower."

Other Stocks of Note - Toyota (NYSE: TM), Honda (NYSE: HMC), Nissan (Nasdaq: NSANY), Daimler (NYSE: DAI), Johnson Controls (NYSE: JCI), Lear (NYSE: LEA), Magna (NYSE: MGA)


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