Ford Says U.S. Auto Sales Running at a 12 Million Pace

Ford Motor Co. said U.S. auto sales in December are running at a 12 million unit annual rate, and it forecast sales to rise to almost 13 million next year.

December would be the third straight month of industrywide deliveries at a seasonally adjusted annual rate of 12 million or more, a level exceeded once in the previous two years. Sales for all of 2010 may rise to 11.5 million cars and light trucks, from 10.4 million last year, according to researcher IHS Automotive. U.S. deliveries averaged 16.8 million from 2000 to 2007.

“We have a high degree of confidence that 2011 is going to be a stronger sales year,” George Pipas, Ford’s sales analyst, said today in a briefing with reporters in Dearborn, Michigan, where the company is based. “We’re a whole lot better off than we were a year ago.”

Ford’s U.S. sales rose 21 percent in the year’s first 11 months, nearly twice the industrywide gain of 11 percent. New models such as the Fiesta subcompact and the redesigned Taurus sedan have enabled Ford to increase its U.S. market share to 16.7 percent this year, from 15.3 percent in the same period last year, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey.

This year’s sales growth was led by deliveries to fleet customers, such as governments and rental-car companies, Pipas said. Ford expects retail consumers to drive next year’s volume gains, Pipas said.

‘Best Since Lehman’

“It will be slow but steady positive growth in 2011,” Pipas said, adding that sales in the fourth quarter of 2010 “will be the best since Lehman Brothers went out of business” in the second half of 2008.

High unemployment and the sluggish housing market remain “two worry beads” that will slow auto sales growth, Pipas said.

“The unemployment rate will weigh on economic growth in 2011,” Pipas said. “There are no strong indicators that the housing sector will get better.”

Still, Ford expects to increase sales, especially in small cars as it follows its 2010 introduction of the Fiesta subcompact with the debut of a redesigned Focus compact model early next year, Pipas said.

Ford’s share of small-car retail sales in the U.S. rose to 10 percent this year, its largest in more than six years, Pipas said. While small-car sales accelerated in November and December, the segment’s portion of U.S. deliveries fell 2 percentage points because of unemployment among young adults, he said.

Growing Segment

Ford expects the small-car segment to grow in 2011 because several automakers are introducing new models, Pipas said. Small-car sales also could get a lift from rising fuel costs. U.S. gasoline prices now average $2.98 a gallon, up 39 cents a gallon from a year ago, according to the AAA Fuel Gauge Report.

“There’s more pent-up demand in the small vehicle market than in any other segment,” Pipas said. “The demographic shifts are very powerful. Baby boomers are not only downsizing their autos, they’re downsizing their homes.”

Ford, the world’s most profitable automaker, earned $6.37 billion in the first nine months of the year, the most since 1998. Ford has gained consumer consideration because it managed to avoid the bankruptcies that befell its U.S. rivals last year. The automaker borrowed $23 billion in late 2006 before credit markets froze, which gave it the cash it needed to weather the recession and invest in new models.

Ford rose 5 cents to $16.85 at 4:01 p.m. in composite trading on the New York Stock Exchange. The shares have risen 69 percent so far this year.

To contact the reporter on this story: Keith Naughton in Dearborn, Michigan, at Knaughton3@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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