June auto sales with John Batchelor and Larry Kudlow

John Batchelor, host of the John Batchelor radio show, and Larry Kudlow, host of CNBC’s Kudlow reports talked with Lou Ann Hammond, CEO, www.drivingthenation.com about June auto sales.

Bleak is what they are. 11.45 for the year would be a bad year. Let’s face it – sales are not going in the right direction. One of the reasons is because the Japanese tragedy left supplies short and has caused prices to go up. Japan should be back online by August. We won’t know until about August or September if sales are lagging because of this, or if it was the economy.

Not only are we still in a nascent economy, the DOW is still volatile and shaky. So are oil prices. President Obama let oil out of the Strategic Petroleum Reserve (SPR). That gave us some relief at the gas station. But gasoline prices are fluctuating too much as well.

Are car manufacturers producing too many pickups because they see gasoline prices going down? Craig Trudell and Joshua Armstrong wrote an article for Bloomberg that tells of Jim Ellis Chevrolet in Atlanta with plenty of Silverado full-size pickups in early 2011, 6 1/2 months worth! The story goes on to say that The Detroit-based automaker, 33 percent owned by the U.S. after it’s 2009 bankruptcy, has 280,000 Silverado and GMC Sierra pickups on dealers lots around the country. If sales continue at Junes rate, that would be enough to last until November.

After GMs truck inventory swelled to 122 days worth of average sales, the company said 100 to 110 will be normal going forward for such a large and complex line of vehicles, compared with 60 to 70 days for most models. I agree with Bloomberg’s article that that many pickups on the lot for that many days is not a good thing. But it also concerns me that gasoline, oil and the dow are fluctuating so much. It’s hard to have a correct forecast of the future if you’ve got groups that are causing fluctuations.

About the Author:

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a member of the North American Car and Truck of the Year (NACTOY), Women's World Car of the Year (WWCOTY), and the Concept Car of the Year.