December Auto Sales: Set to End 2010 in High Gear

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December Auto Sales Projected to Hit Highest Levels of 2010 The economy may be less robust than most Americans would like, but that didn't stop many of them from hitting car dealer showrooms in December, likely propelling auto sales in the final month of 2010 to the highest levels of the year.

Automakers are believed to have sold about 11.5 million vehicles for the year in the U.S. -- at the low end of analyst expectations, but a welcome 11% improvement from the disastrous 10.4 million units sold in 2009. Most automakers are due to release December sales figures Tuesday.

For the month, sales are forecast to reach 1.13 million units, the highest level of the year and the strongest pace of sales since last year's "cash for clunkers" rebate program, according to venerable car-buying guide Edmunds.com. After adjusting for seasonal variations in purchases, the pace of sales last month translates to an annual rate of 12.34 million, also the highest rate since August 2009, when sales clocked in at 14.15 million pace.

Sales in December are expected to beat November's by about 30%, Edmunds said. November is typically one of the slowest months for car sales, along with January. Of December's total, about 912,000 units, or 81%, were retail sales, indicating that consumers are gradually coming back to showrooms. Earlier in 2010, vehicles sales were more propped up by commercial sales, as rental car companies and corporations replaced aging fleets.

A Good Month for Everyone, Except Toyota


Beyond better sales, automakers also found they didn't need to rely on pricey incentives to get consumers through showroom doors. Though automakers spent heavily to advertise year-end sales, average incentives edged up only $28, or 1.1%, to $2,492 a vehicle in December compared to November, Edmunds said. Further, per-vehicle incentives were down from a year ago by $62, or 2.4%.

Among individual automakers, all of the nation's top six car companies are expected to see sales improvements -- with the exception of recall-saddled Toyota Motor (TM): Edmunds forecasts the world's largest automaker will see its sales fall 12% compared to year ago, to about 165,000 vehicles in December. Still, Toyota's U.S. sales are expected to exceed those in November by about 27.5%.

General Motors (GM), Ford Motor (F) and Chrysler Group are each expected to report higher sales compared to December 2009. GM, the nation's largest automaker, is forecast to sell 230,000 vehicles, up nearly 11% compared to year ago, Edmunds said. Ford likely sold about 187,000 cars, trucks and SUVs, up a modest 5.1% compared to year-ago levels. And Chrysler is believed to have sold nearly 97,000 units, a 12.6% bump up from December 2009.

All of the Big Three automakers are expected to record much higher sales than in November.

Koreans Are Catching Up With Nissan

Rounding out the nation's top six auto manufacturers, Edmunds said it expects Honda Motor (HMC) to increase its sales 6.5% to 114,000 units in December, while those at Nissan Motors (NSANY) likely rose 26% to about 92,300 vehicles. Both Japanese automakers are expected to record lower sales than in November.

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Sales at fast-growing Hyundai Motor and Kia Motors are expected to rival those of Nissan, according to a forecast by TrueCar.com, an online pricing guide. TrueCar said that combined the South Korean automakers likely sold 88,000 cars and utility vehicles last month, a staggering 61% increase compared to December 2009. TrueCar's forecast are slightly lower than those of Edmunds when it comes to total sales for the year. TrueCar expects the U.S. auto industry to have sold 11.1 million vehicles during all of 2010.

Looking forward to 2011, Jesse Toprak, senior analyst at TrueCar.com, says he expects continued improvement in the coming year as retail sales of cars and trucks continue to rebound. "Consumer confidence is rising," he says, "and there is a lot of pent-up demand in the market."





Note: December 2010 had 27 selling days, one fewer than December 2009.

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