US auto sales race to 5-year high for November
- SC allows Italian marine Girone to fly home after Centre backs plea on humanitarian grounds
- India's states have to help navigate country's growth: Modi tells Journal
- 'Under PM Modi, decision making has replaced policy paralysis witnessed during UPA regime'
- Economy’s green shoots yet to strike roots: Private investment still frozen
- Amit Shah nuances 'Congress-mukt Bharat': Freedom from Congress system
Sales in November rose 15 percent to 1.14 million vehicles, the highest level for that month since 2007, before a recession caused a dramatic decline in demand and led to the bankruptcy filings of General Motors Co and Chrysler.
"Vehicle sales are one of the encouraging spots of our economy," said Gary Bradshaw, portfolio manager with Hodges Capital Management in Dallas.
Ford Motor Co, Honda Motor Co and Nissan Motor Co posted better-than-expected sales, while Chrysler Group LLC, Toyota Motor Corp and Hyundai Motor Co also reported strong increases that industry executives and investors said should continue through the end of the year.
However, sales for GM came in short of expectations. The No. 1 U.S. automaker said it benefited less than its rivals from the November recovery after Superstorm Sandy hit the U.S. Northeast as a smaller share of GM's sales come from that region. It also relied less on incentives.
Auto sales are an early indicator each month of U.S. consumer demand, and the improving housing market and rising consumer confidence have industry executives optimistic heading into 2013.
"Looking at the national picture, the apparent recovery in housing that we talked about last month and the encouraging new data on consumer sentiment and confidence are all positive factors," Kurt McNeil, GM's vice president of U.S. Sales operations, said on a conference call.
He declined, however, to provide a 2013 industry sales forecast until a deal is reached to avoid the so-called fiscal cliff, a combination of federal spending cuts and steep tax increases that could tip the U.S. economy back into recession.
"Exactly how much growth we can expect next year will depend in part on how Congress and the president resolve the fiscal cliff issue," McNeil added. "Consumers hate the uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth."
The 15 percent sales gain in November easily surpassed the gain of 11 to 13 percent most analysts had expected. The annual sales rate in November of 15.54 million was the industry's strongest for any month since the 15.55 million rate of February 2008.
Superstorm Sandy hurt the last few days of sales in October, which finished below expectations, but many consumers simply shifted their purchases to November. In addition, the average age of cars on the road has risen to just above 11 years, and industry officials say that will continue to drive demand.
McNeil said the auto industry is clearly heading this year toward the high end of GM's forecasted range of 14 million to 14.5 million. Many analysts expect the industry to finish 2012 with 14.4 million sales, which would mark the strongest year since the 16.1 million of 2007.
TrueCar.com analyst Jesse Toprak expects U.S. auto sales to rise to 15.4 million next year. "Stable growth is really the motto of the industry."
Jonathan Browning, CEO of Volkswagen Group of America, sees a continuation of a steady recovery for the economy as well as for U.S. December and early 2013 auto sales, but expressed concern about the negative impact on consumer confidence if the fiscal cliff occurs. VW brand sales rose more than 29 percent in November.
Ken Czubay, Ford's vice president of U.S. sales, agreed, saying "the clock is kind of ticking," in reference to the Washington talks on avoiding the fiscal cliff.
Ford's November sales rose 6.5 percent to 177,673 vehicles, better than even some of the most optimistic forecasts for the No. 2 U.S. automaker. In a more positive sign for consumer demand, Ford's retail sales rose 12 percent.
The company had its strongest small-car sales for the month in 12 years. Demand for Ford's popular F-150 full-size pickup truck increased 17 percent, while GM's Chevrolet Silverado pickup saw sales drop 10 percent.
GM, with 139 days' worth of Silverado inventory at the end of November, blamed aggressive incentives by Chrysler, Nissan and Ford for the decline, and said it would focus on curtailing production of trucks rather than risk becoming trapped in a price war.
GM, with 96 days' worth of Cruze small cars in inventory at the end of November, plans to idle the Lordstown, Ohio, plant where the car is built for two weeks in December instead of the planned one week to reduce supplies, said two people with knowledge of the plans who asked not to be identified. A spokesman did not confirm the plans.
Ford's shares closed down 0.3 percent at $11.41, while GM shares fell 1.4 percent to $25.51 on the New York Stock Exchange on Monday.
Ford said it planned to build 750,000 vehicles in North America in the first quarter of 2013, which would be an 11 percent increase from 2012. That would be the highest first-quarter production level since 2006.
GM's sales rose 3 percent to 186,505 cars and trucks, below the expectations of several analysts. The company said the average price paid per vehicle rose $750 from last year.
TrueCar estimated that the industry's average vehicle selling price in November rose 1.1 percent, or $335, from last year, and rose a similar amount from October to $30,832.
Chrysler, majority-owned by Fiat SpA, said sales rose 14 percent to 122,565 cars and trucks, its strongest result since 2007.
Toyota's sales rose more than 17 percent to 161,695 vehicles. Honda and Nissan both reported better-than-expected results, with the former jumping about 39 percent and the latter increasing 13 percent.
Hyundai said sales increased 8 percent to the company's all-time high for the month. November marked the first sales results since the South Korean automaker and its Kia Motors Corp affiliate announced they had overstated the fuel economy ratings by at least a mile per gallon on more than 1 million recently sold vehicles.
- Muslims and RSS cannot afford to go on hating
- After the initial euphoria, Modi government has created widespread despondency
- Fixing the learning deficit requires a lot more than right kind of tracking technology
- The problem begins with the way we define “urban” and “rural”
- Modi govt’s backward-looking instincts pulls down its forward-looking mission
- Judge-population ratio is not the apt parameter to determine judiciary’s strength