U.S. Auto Sales in November May Almost Match 2010 High on SUVs

U.S. Auto Sales in November May Almost Match 2010 High
Deliveries of Ford’s F-Series pickups climbed 30 percent through October. Photographer: Jay LaPrete/Bloomberg

U.S. automobile sales in November may almost match the fastest pace this year as demand for domestic manufacturers’ trucks and sport-utility vehicles rose.

Industrywide sales, to be released Dec. 1, probably reached an annual rate of 12.2 million vehicles this month, the average of eight analysts’ estimates compiled by Bloomberg. That follows the 12.3 million pace of October, the fastest since the U.S. government’s “cash for clunkers” program in August 2009.

Ford Motor Co. and Chrysler Group LLC each may have increased sales by more than 20 percent, the average of five analysts’ estimates. Deliveries may gain 13 percent for General Motors Co., which raised more than $20 billion from common and preferred shares in an initial public offering this month.

“Domestics will be up by a huge number this month, with a lot of it coming from strong truck and SUV sales,” said Jessica Caldwell, an analyst for researcher Edmunds.com in Santa Monica, California. Trucks and sport-utility vehicles have better sales “as it gets colder, plus we’ve seen higher demand in the last few months as gas prices have been stable for some time.”

Deliveries of Ford’s F-Series pickups climbed 30 percent through October, while sales of Chrysler’s Jeep Grand Cherokee SUV rose 41 percent, according to Autodata Corp., a research firm. GM’s sales of the Chevrolet Equinox SUV surged 75 percent.

Annual Rate

The U.S. auto selling rate has stayed above 11 million since March, according to Autodata, based in Woodcliff Lake, New Jersey. Deliveries are running about 30 percent slower than the 16.8 million annual average from 2000 to 2007.

The U.S. economy expanded at a 2.5 percent annual rate in the third quarter, more than previously calculated, the Commerce Department reported Nov. 23.

GM’s sales may benefit from its recent IPO, said Jesse Toprak, vice president of industry trends at TrueCar.com, who estimated a 13 percent increase in the Detroit-based automaker’s deliveries. GM’s owners, including the U.S. Treasury Department, sold shares at $33 each on Nov. 17.

“If you see the company performing, the stock price holding up, and perhaps GM posting another profit in the fourth quarter, that adds to brownie points with consumers,” Toprak said.

Ford may post a 21 percent sales gain, the average estimate of five analysts. The Dearborn, Michigan-based automaker’s shares reached $17 on Nov. 15, the highest closing price since Jan. 8, 2004. Ford is the world’s top-earning automaker with net income of $6.37 billion in the first nine months of the year, the most for the company since 1998.

‘Exceptional’ Mood

Chrysler’s sales may increase 26 percent, the average of five analysts’ estimates. The automaker based in Auburn Hills, Michigan, on Nov. 8 reported an $84 million third-quarter loss and raised its full-year operating profit forecast to about $700 million.

The mood of customers is “exceptional,” David Kelleher, a Chrysler dealer in Glen Mills, Pennsylvania, said in a telephone interview. The redesigned Jeep Grand Cherokee helped make the month better than a normal November, Kelleher said.

“I have traffic in my showrooms,” he said. “I have very, very positive customer attitude right now toward our products. It’s a strong month for November.”

Toyota Motor Corp. may be the only major automaker whose U.S. deliveries declined, with a 3 percent drop, the average of four analysts’ estimates. The world’s largest automaker, based in Toyota City, Japan, has recalled more than 8 million vehicles for repairs related to sudden, unintended acceleration.

Toyota’s ‘Black Cloud’

“The effects of the recalls appear to be lingering over Toyota like a black cloud,” said Toprak, of Santa Monica, California-based TrueCar. “The image of a company can be demolished easily overnight. It takes much longer to move the needle in terms of improving your image.”

November historically is one of the worst months of the year, after January or February, Toprak said. The industry usually has about a 10 percent decline in volume in November from October, and this month “appears to be right in line with historical patterns,” he said.

“This is a very weak time of year and always has been, even in a good market,” Earl Hesterberg, CEO of Houston-based Group 1 Automotive Inc. dealership group, said in a Nov. 16 telephone interview. “You won’t hear anybody jumping for joy, but it certainly seems November is generally in line with what we saw in October. I don’t think anything has turned downwards other than it’s seasonally a weak time.”

Deliveries at Tokyo-based Honda Motor Co. may have risen 24 percent, while Yokohama, Japan-based Nissan Motor Co.’s sales may have increased 16 percent, according to four analysts’ estimates.

The following table shows estimates for car and light-truck sales in the U.S. Estimates for companies are a percentage change from November 2009. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of vehicles.

November had 24 selling days, one more than a year earlier.

GM Ford Chrysler SAAR

Himanshu Patel NA NA NA 12.3 (J.P. Morgan) Rod Lache NA 23% 30% 12.2 (Deutsche Bank) Jesse Toprak 13% 23% 17% 12.2 (TrueCar.com) Joseph Barker NA NA NA 12.1 (IHS Automotive) Jessica Caldwell 12% 26% 22% 12.2 (Edmunds.com) Jeff Schuster NA NA NA 12.2 (J.D. Power) Brian Johnson NA 14% 27% 12.1 (Barclays Capital) Patrick Archambault NA 17% 33% 12.2 (Goldman Sachs) Average 13% 21% 26% 12.2
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