US auto sales slip as employment growth weakens

US autos Jul10.pngEach US auto sale is worth $2973 to the chemical industry, according to American Chemistry Council research. And as the chart above shows, current sales remain well below the levels seen in the Boom years.

In June 2007, for example, 1.5m autos were sold (black line), in line with 2006 and 2006 performance. They were worth $4.5bn in chemical sales in today’s money. Even in 2008, as the Crisis developed, 1.2m were sold. Yet although June 2010 saw a welcome improvement to 983k sales (versus 859k in 2009), the chemical sales value was still only $2.9bn.

June also saw a continuing swing towards smaller, cheaper, vehicles, with Hyundai volumes up 35% at 51k. And sales to private buyers slowed, with volume supported by lower margin sales to government and companies. This will keep pricing pressure on parts suppliers, already struggling to pass on the impact of higher oil and polymer prices.

Overall, annualised sales dipped to 11.2m, compared to the 15m-17m level seen between 1995-2007. The auto companies still expect a rebound when new models are launched, but with US employment numbers very weak, H2 could easily disappoint.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


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