Last updated Friday, September 14, 2007

September typically follows the summer pattern of slow but steady declines among most market segments and this year is no exception. Summer vacations are history, the back to school rush is mostly over and peoplesí thoughts actually sometimes turn to their automotive needs at this time of year often resulting in a slight upturn in the market or at least the moderation of a declining market.

This September seems to be following that pattern, a mild increase in business coupled with a continuing scarcity of good vehicles resulting in only a slow decline in market segments not awash in product. Good domestic cars continue to be difficult to find and are often in that desirable under $12,000 price range and are holding up quite well in this market. The popularly priced imports (Honda, Toyota, Nissan, Mazda, etc.) are softening some, but slowly. The only market segment that seems to be weakening significantly (besides some convertibles: Audi A4s, Jaguar XKs, MB SLs, Porsche 911s in particular) is the European luxury segment, particularly Mercedes S-class and BMW 7-series. That is not really a surprise. They tend to be high priced, more vulnerable to larger declines and continue to be relatively plentiful.

In general SUVs are abundant and, though still popular, have a bit too much supply for the demand and continue to soften. The same for pick-ups as they have become more common in the marketplace.

September is turning out to be pretty much what we expected. Looking forward, October and November have been the most volatile months for the market in recent years. Itís hard to predict what will happen this year. If the supply of used vehicles continues to be as low as it has been for most of this year and the economy holds up reasonably well, this may not be as bad a winter as we have come to expect. I would urge caution, however. Keeping inventories low and current for the next couple of months is probably a wise strategy.

Dan Galves