Trucks and SUVs Should Fuel November Auto Sales
Overall, the industry is expected to rack up sales of about 868,000 units, up 16% from November 2009, according to analysis by TrueCar.com, an online automotive pricing guide. "Several consecutive months of year-over-year retail sales improvements indicate that the recovery in consumer demand has not been a coincidence," says Jesse Toprak, senior analyst at TrueCar.
Compared to October, November sales are forecast to fall about 9%, following a traditional seasonal trend, as consumers' shift their attention toward holiday shopping and away from car shopping.
TrueCar forecasts show November sales translating to a 12.23 million annual rate, just shy of October's 12.25 million, which was the fastest pace since the federal government's "cash for clunkers" program was under way in 2009. Expectations call for 11.5 million to 12 million in total sales for the year, indicating that demand during the last two months has been exceptional.
Detroit Sees Strongest Gains
Consumers are showing increased interest in sport-utility vehicles and trucks, particularly those sold by Detroit's Big Three -- General Motors (GM), Ford Motor (F) and Chrysler Group. The boost in demand is expected to result in sales increases of 20% at Ford and Chrysler, while those at GM likely rose around 13%, Bloomberg News reported.
"[Domestic automakers] will be up by a huge number this month, with a lot of it coming from strong truck and SUV sales, Jessica Caldwell," senior analyst at Edmunds.com, told Bloomberg. Despite the recent rise in gasoline prices, consumers largely view fuel costs as stable, which is resulting in better sales of trucks and SUVs as the weather turns colder.
Models that have proven popular include GM's Chevrolet Equinox compact SUV, Ford's F-Series line of pickup trucks and Chrysler's recently revamped 2011 Jeep Grand Cherokee, which arrived at dealerships last summer.
In terms of market share, Ford is seen as having benefited most from improved sales, according to TrueCar's analysis, with its percentage of the U.S. market rising to 17.5%, up from 16.6% last month. Most other automakers will see market share levels comparable to those of October. The exception is Chrysler, which is forecast to slip to 8.6%, nearly a full percentage point drop from the previous month.
Still Not Like the Good Old Days
The strong pace of sales is expected to continue through to year-end, according to TrueCar's Toprak. "We have high expectations from December sales as year-end clearance events should drive the industry to its best unit sales total of the year," he says.
Based on rising demand led in part by new products, TrueCar is forecasting annual auto sales of 12.7 million units for 2011, some 700,000 more vehicles than analysts most optimistic predictions for 2010 of 12 million units. Still, the numbers are a far cry from the roughly 17 million-unit pace the U.S. auto market averaged during the eight years from 2000 to 2007.
Analysts are divided whether the industry will soon return to that pace or whether domestic sales will settle somewhere above current levels, but well below prerecession levels. It's clear, however, that at least for Detroit's automakers, the worst of the sales doldrums appear to be in the past.