The cash-for-clunkers program could push the annualized U.S. selling rate to 13 million in August, J.P. Morgan Securities analyst Himanshu Patel says.
The federal program increased the seasonally adjusted annualized selling rate by about 1 million in July, Patel said today in a research note.
Most of the bump came at the end of the month, “suggesting the August SAAR could reach 13 million,” Patel wrote. That’s assuming the U.S. Senate approves a House bill adding a further $2 billion to the $1 billion already appropriated for the program.
He also estimated cash-for-clunkers helped cut inventories of unsold vehicles – already at all-time recorded lows in July – to about 1.75 million on Aug. 1, down 44 percent from the end of 2008.
With such low stocks of vehicles on hand, Patel said a surge to a 13 million selling rate this month would force manufacturers to boost planned third quarter production