Thursday, December 2, 2010

US Nov auto sales rise, recovery gains ground

DETROIT: U.S. auto sales rose 17 percent in November from a year earlier, a stronger-than-expected gain that pointed to a slow but steady return in consumer demand from the depressed levels of a year ago, according to Reuters on Wednesday, Dec 1.

The annual sales rate was near 12.3 million vehicles in November -- flat with October -- as American consumers were lured into showrooms by month-end discounts for new car purchases that many had delayed through the recession.

Ford Motor Co reported a 24 percent increase in sales. Chrysler sales rose 17 percent and General Motors Co sales were up 11 percent overall. Ford sales exclude the Volvo car unit it sold to China's Geely in August.

"We are seeing consumers coming back in the marketplace not just because they need a car but because they want one, which is a significant change from the buying patterns we have seen in the last nearly two years," TrueCar analyst Jesse Toprak said.November, slightly deeper than the 2 percent drop analysts expected, illustrating the difficulties Toyota still faces in winning back U.S. consumers a year after starting recalls that rocked its reputation for quality and safety.

Toyota, the world's top automaker, said it cut back on sales to fleets including car rental agencies by 60 percent in November from a year earlier, while its sales to consumers rose about 5 percent.

Toyota has recalled about 14 million vehicles worldwide since last November, including 11 million in the United States. On Monday, Toyota said it would replace potentially defective coolant pumps on 378,000 U.S. Prius hybrids.

"Without new product to compete with and stripped of its bullet-proof quality reputation, Toyota is forced to sell on the deal," senior analyst Jessica Caldwell said.

GM said it expected that the growing pent-up demand for cars -- evidenced by rising used-car prices and the increasing age of cars on the road -- would bolster sales as consumer demand recovers in 2011.

"It's not going to happen overnight, but we think through 2011 we're going to see a continued gradual improvement," said Jim Bunnell, general manager of GM's U.S. sales operations.

Auto sales for November are one of the first snapshots of consumer behavior at the holiday shopping season. However, automakers typically run year-end discount programs from before the U.S. Thanksgiving holiday through year end.

Thanksgiving holiday deals sponsored by individual dealers and manufacturers, including Toyota and Nissan Motor Co, lifted sales late in November, analysts said.

"That one day felt like 2006 again," Toyota brand U.S. sales chief Bob Carter said of the Friday after Thanksgiving.


Paul Ballew, chief economist at Nationwide, said the November results were "solid" but not "spectacular."

"The market overall is showing signs of the recovery at the end of the year we had hoped for," Ballew said.

Internationally, Japan November car sales fell 31 percent excluding mini-vehicles, a third consecutive decline. Most European markets also posted November auto sales declines after government incentive programs came to an end.

Car sales fell 11 percent in France, 25.5 percent in Spain and 21 percent in Italy.

GM's shares closed 1.7 percent higher at $34.78 and Ford shares rose 3.3 percent on the New York Stock Exchange.

Hyundai Motor Co posted a 45 percent jump in sales in November from a year earlier and set an annual U.S. sales record for the Korean automaker. Nissan Motor Co Ltd sales rose 27 percent overall.

Honda Motor Co sales rose 21 percent.

Sales of GM's four core U.S. brands rose 21 percent in November from a year earlier amid higher prices and reduced incentives, GM said in its first sales results since it completed the largest-ever IPO in November.

GM said its Chevrolet, Buick, GMC and Cadillac brands were on track to gain market share for the year. Sales of GM's Chevrolet Traverse, GMC Acadia and Buick Enclave sister crossovers rose a combined 38 percent from a year earlier.

GM said sales of its new Chevy Cruze helped punch car sales up 17 percent in November from a year earlier.

Ford left its fourth-quarter production plan intact and announced that first-quarter 2011 production would be up 11 percent from the first three months of 2010 amid more signs of growth in the U.S. economy and demand for new vehicles.

The F-Series pickup truck continued to lead Ford sales overall and the Fusion sedan has already set an annual sales record with one month left in the year, Ford said. Sales of the Ford Edge crossover rose 55 percent.

After a disastrous 2009 that saw GM and Chrysler collapse into government-funded bankruptcies, the industry is expected to see 2010 sales of about 11.5 million vehicles. That would represent a gain of about 10 percent.

TrueCar's Toprak expects the industry results from October and November to carry through the last month of 2010 due to strong sales incentives and improved consumer confidence.

"We are seeing nice momentum going into December," Toprak said. "Hopefully that will carry us into 2011 nicely."

Most industry estimates for 2011 put sales between 12 million and 13 million vehicles. Before the financial crisis, automakers routinely sold more than 16 million vehicles per year in the U.S. market. - Reuters

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