U.S. auto ABS volumes may have slowed down in August from July volumes, but an increase in vehicle sales this month means ABS issuance is likely to also pick up.
Standard & Poor's said today that used vehicle sales are likely to increase more than 2% y/y in August to 3.9 million units, signaling continued auto loan originations and ABS issuance.
The rating agency calculated that year-to-date sales through August should reach 28 million units, compared with 27 million during the same period in 2011. New vehicle sales rose 9% in July from a year ago to 1.15mn units.
August issuance ABS issuance volumes showed a slight slowdown from July issuance volumes. According to figures reported by Barclays Capital, auto-related ABS issuance in August totaled $2.6 billion (around 30% of total non-mortgage ABS in August); this compares to $11 billion in July (about 54% of total non-mortgage ABS in July).
But the slowdown in August should be viewed as entirely seasonal. August 2012, said John McElravey, head of consumer ABS research at Wells Fargo, is up considerably compared to the previous two Augusts. Well Fargo calculated the total in auto issues for August 2012 at $8.035 billion; in 2011 that number was at $3.480 billion and in 2010 the August volume for the sector was at $6.433 billion.
McElravey added that he expected "to see a very active September in auto ABS."