• by Karl Greenberg , September 26, 2009

It's the end of the end. While analysts are projecting that automotive sales this month will be way down after the demise of the government's Car Allowance Rebate System (CARS or "Cash for Clunkers"), they are also saying volatility is giving way to stability.

Edmunds.com is predicting this month's new vehicle sales (including fleet sales) to be 742,000 units -- a 26% drop from September last year, when numbers are adjusted for differences in selling days between the two periods. The firm says the drop is due to sales being pulled into August because of CARS, and to the resulting low inventories and higher prices for in-demand vehicles. But the firm reports that sales are recovering already in the last half of the month, and that volume may be driven up further by leftover CARS deals yet to be done.

J.D. Power & Associates predicts that this month will produce the lowest selling rate of the year. The firm is predicting slightly lower numbers than Edmunds, at 710,000 vehicles delivered including fleet sales. J.D. Power also sees low inventories, lower incentives, and a pull-ahead effect from CARS dimming September numbers. But, like Edmunds, the Westlake, Calif.-based market-research giant sees patches of blue in months to come because of improving consumer confidence and credit conditions.

The trend for monthly sales has been bigger losses year-over-year versus the month prior. Edmunds.com predicts that things will reverse in September because of those big CARS-driven numbers in August. The Santa Monica-based firm predicts that the industry will average 41% declines versus last month -- far more than the 26% drop versus September last year.

Among domestics, the biggest sales losses versus last year will be at GM and Chrysler, which will experience 48% and 50.8% declines respectively, per Edmunds. But the firm predicts Ford's losses versus last year will be commensurate with Toyota's at only 13.3%. Edmunds predicts that Nissan will only see a 5.1% drop in sales year over year versus 44% versus last month.

Stephen Berkov, Edmunds.com senior marketing analyst, says the government's "Cash for Clunkers" program represents a clean up of the old inventory of various brands pushing hard to get sales done.

"October should be a fresh start for the industry," he says, adding that the industry is at a nexus and marketers need to shift messages. "As I see it, from August to next year is a crucial time for brands to clearly define who they are, what they stand for and why they deserve a place in the market."