GM Sales Closely Track Economy: Survey

A survey shows GM and Chrysler sales most closely track the economy, while Hyundai and Honda are the least dependent.
By Ted Reed ,

DETROIT (

TheStreet

) -- A new study says that some automakers depend more heavily than others on a positive economy to stimulate sales.

The study by TrueCar.com, which provides auto pricing data, said that

General Motors

and

Chrysler

"are consistently dependent on a solid economy." By contrast, Hyundai and Honda are the least dependent.

TrueCar.com looked at the relationship between new vehicle sales and four leading economic indicators: the Dow Jones Index, housing starts, unemployment and consumer confidence.

"With the industry starting to get its legs back, we wanted to see how dependent new vehicle sales are on macro-economic trends as well as which manufacturers were -- and continue to be -- best prepared to keep selling cars through any kind of economy," said Jesse Toprak, TrueCar vice president of industry trends, in a prepared statement.

"The real revelation was the emergence of Hyundai as an 'economy proof' manufacturer -- with the lowest percentage correlation in virtually every category amongst all major manufacturers," he said.

For instance, in the case of the Dow Jones Index, the study found that 85% of the time, GM sales were up when the average was up over the previous month and down when the average was down compared with the previous month, Toprak said.

Correlations for other manufacturers are Chrysler, 82%; Daimler-Benz, 79%; Porsche, 77%;

Toyota

(TM) - Get Report

, 76%;

Ford

(F) - Get Report

, 72%; Nissan, 67%;

Honda

(HMC) - Get Report

, 64%; BMW 59% and Hyundai, 27%. Overall correlation was 81%.

The degree of overall correlation ranged from 75% with the unemployment rate to 82% with housing starts. GM and Chrysler were above the industry average in all four categories, while every other manufacturer was below the average in all four categories. The study examined data from January 2007 to March 2010.

"It is very reasonable to expect that major economic downturns and subsequent recoveries will have very noticeable anticipated impacts across all areas of our economy, including consumer automotive purchasing decisions," noted Mike Swinson, TrueCar vice president of analytics. Even so, he said, the levels of correlation are surprisingly high.

-- Written by Ted Reed in Charlotte, N.C.

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