Auto Sales Seen Rising 12% This Month, 12% for 2012
DETROIT -- (TheStreet) -- The strong pace of U.S. auto industry sales this year is continuing this month, with November light-vehicle sales likely to show a 12% increase.
Experts said Hurricane Sandy reduced October sales, pushing some demand into later months, and also created a need for replacement vehicles.
"Sales have strengthened each week in November, which bodes well for a strong finish to the month and the year," said J.D Power analyst John Humphrey, in a prepared statement. "We expect healthy sales in December, as the industry continues to recover from Sandy and leads into its year-end sales events."
LMC Automotive, an affiliate of J.D. Power, forecast November volume of 1.1 vehicles, with retail sales accounting for 83%. November is expected to reflect the highest retail selling rate since January 2008. Retail transactions are considered the most accurate measurement of consumer demand for new vehicles, with the remaining sales to fleet customers influenced by various factors.
LMC Automotive projected full-year 2012 light vehicle sales of 14.4 million. During its third-quarter earnings call, Ford(F) also projected 2012 light-vehicle sales of 14.4 million. Edmunds.com also said it expects full-year light-vehicle sales of 14.4 million. U.S. light-vehicle sales totaled 12.8 million in 2011, up from 11.6 million in 2010. LMC projected 2013 sales of 15 million.
"The irrepressible need and willingness of consumers to replace aging vehicles is stronger than the effects of natural disasters and fiscal turmoil both here and abroad," said LMC Automotive analyst Jeff Schuster, in a prepared statement. "A sustained recovery pace in auto sales is expected over the next six months, barring any fiscal cliff hangover, but the medium-term forecast is still dependent on more pronounced economic activity and growth."
On a recent conference call with reporters, Edmunds.com economist Lacey Plache said that Hurricane Sandy resulted in lost sales of about 30,000 units in October. This month, she said, first-half sales in the Northeast were slower than expected, but a second-half pickup is expected. "By December, most of the delayed sales will have come back, plus sizable replacement sales come in" she said. "Insurance money starts coming in by then."
Edmunds.com estimated that 200,000 to 250,000 vehicles were destroyed or damaged by Hurricane Sandy, of which about 65,000 to 80,000 will be replaced in the new car market.
-- Written by Ted Reed in Charlotte, N.C.
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