US vehicles sales set for pace rise

08:42, January 04, 2011      

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US automobile sales may have continued at the fastest pace since 2009 in December, carrying the industry to its first annual increase since 2005.

Total sales probably ran at an annual rate of 12.3 million vehicles last month, the average of seven analysts' estimates compiled by Bloomberg. November and October sales hit the same pace, the fastest since the US government's "cash for clunkers" program in August 2009.

Full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering General Motors Co (GM) on its way to the second-largest US initial public offering and helping Ford Motor Co earn the most through three quarters since 1998. Toyota Motor Corp, hurt by more than 8 million recalls for unintended acceleration, fell behind Ford in US sales for the first time since 2006.

"Consumers are now becoming more comfortable buying cars in an uncertain economic environment, which is a major change in buying patterns compared to a year ago," Jesse Toprak, vice-president of industry trends at, said in a telephone interview. "We saw more of the same in terms of consumers' eagerness to come back into the marketplace in December."

Confidence among US consumers climbed to a six-month high in December, the Thomson Reuters/University of Michigan sentiment index showed on Dec 23.

Sales for December and the year remained below the 16.8 million annual rate racked up before the recession, and unemployment forecast to stay above 9 percent will temper growth for the industry in 2011.

GM may report a 3.4 percent increase, the average of three estimates for December, the month after the automaker sold $23.1 billion of common and preferred stock in an IPO. Analysts including Himanshu Patel of JPMorgan Chase & Co in New York initiated coverage of the Detroit-based automaker last week by recommending investors buy the shares as consumers pay more for Chevrolet Equinox and Cadillac SRX sport-utility vehicles.

"I don't think the full potential for General Motors is really appreciated by investors yet," said Dan Veru, co-chief investment officer at Palisade Capital Management LLC in Fort Lee, New Jersey, which oversees $3.1 billion and bought shares in GM's IPO. "The company is without vestiges of the old GM, the product line has improved dramatically, and it's an intriguing emerging-markets play with exposure in China."

Ford, which will reclaim from Toyota the No 2 spot for US sales that it held for 76 years until 2007, may say sales climbed 3.5 percent, according to four analysts' estimates. The Dearborn, Michigan-based company began shipping the redesigned Explorer SUV during the month.

Through November, Ford had sold 1.74 million light vehicles, 155,000 more than Toyota.

"We have a high degree of confidence that 2011 is going to be a stronger sales year," George Pipas, Ford's sales analyst, said on Dec 20. "We're a whole lot better off than we were a year ago."

"Ford has been beating up on Toyota year-round," Ivan Drury, an analyst at auto-shopping research site, said in a telephone interview. "There's really nothing that Ford is launching that you could say isn't competitive or isn't worth buying."

Toyota, the world's largest automaker, may report a 12 percent decline for December, as forecast by Santa Monica, California-based Edmunds. A decrease in December would be the third-straight month the Toyota City, Japan-based company's deliveries declined. It may be the only large automaker to sell fewer vehicles in the United States last year than in 2009.

"The biggest worry for Toyota is they're not taking advantage of the recovery in the market," said Toprak, of Santa Monica-based TrueCar. He predicts an 11 percent decrease in Toyota deliveries. "They're falling behind again in a month where all their competitors are up from last year. It just can't be good for momentum, sales or morale."

Chrysler Group LLC may have increased sales 8.7 percent, the average of three analysts' estimates. The Auburn Hills, Michigan-based automaker kept its Jefferson North Assembly Plant in Detroit open last week to meet demand for the Jeep Grand Cherokee SUV, a spokeswoman, Jodi Tinson, said on Dec 21. The plant is normally closed during the Christmas holiday.

Source:China Daily
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