The world is ending. A recession is looming. The Collapse Might Finally Be Here. It was easy to see the double-digit percentage drops across the board as a sign of The End Times. But the real problem wasn’t a stalling economy or a total crash in demand. It was a poorly explained and little-known change to the automotive sales reporting calendar that made a slightly down month look utterly catastrophic.
The official September 2019 industry-wide sales decline was 11 percent, but Tyson Jominy, vice president of J.D. Power PIN Consulting, says that’s misleading. Because of the way the automotive sales calendar works, one of the most important selling days of the year was recorded on August sales charts instead of September. In an email, he explained why:
The industry sales reporting calendar that we all follow never ends on a weekend or a holiday. Instead, the industry says the first business day after either of those is the last selling day of the month to enable west coast and late night deliveries to be counted in the monthly sales totals. This year August 31 was a Saturday so the final selling day would have been Monday, but that was Labor Day so “August” sales actually went through Sep 3. That pulled Labor Day, one of the biggest sales weekends of the year, into “August” sales for the first time in five years.
That’s why, in a year where the norm is for sales to be down every month, August was actually a blockbuster month. Jominy notes that the industry sales as a whole grew 10 percent that month, or 6 percent if you adjust for the total number of selling days. Because those sales went to August instead of September, everyone had a really rough September.
But adjusted for two fewer selling days, September sales were down only 3 percent. More importantly, if you add September and August together for both years, 2019 saw a 1 percent sales increase for the two-month period over that same period in 2018.
Really, what it comes down to is a failure of communication. The automakers no doubt wanted to brag about their August sales, but in doing so played down neglected to mention that September was going to be brutal. Even most industry insiders don’t know. I certainly didn’t, until I saw Tyson tweeting about it. He put it well in his email:
None of this should matter. The very smart people at OEMs should have all this built[-]in and communicated, but it’s not done enough. Home offices in Japan and Korea see sales gains/declines and make big decisions going forward on false flags. Nothing really changed, we just arbitrarily moved a cutoff line that happens to be a critical sales weekend but we don’t adjust our thinking or industry sales reporting stories in the press.
Automotive PR people seem like they were left in the dark, too, as this very valid excuse wasn’t used much to justify the sales freefall we saw in September. Even Infiniti—a company that I specifically asked if it had justifications for its absolutely terrible September sales—didn’t mention it.
So while it’s true that there are worrying economic indicators out there, slower sales across the industry and waning consumer confidence, the auto industry isn’t in as much trouble as you may have thought.