December U.S. Auto Sales Show ‘Slog’ as Ford ImproKatie Merx and Mike Ramsey
Dec. 31 (Bloomberg) -- U.S. auto sales probably rose in December, signaling a recovery in 2010 after a year marked by the bankruptcies of General Motors Corp. and Chrysler LLC and the fewest new vehicles delivered in almost three decades.
The seasonally adjusted annual rate may be 11.1 million cars and light trucks, according to the average estimate of eight analysts in a Bloomberg survey. That would be up from 10.3 million in December 2008 and 10.9 million in November, marking the second straight monthly gain, according to Bloomberg data.
The year may end with 10.4 million new cars and light trucks sold, the fewest since 1982, when the country had one- quarter fewer adults. Ford Motor Co. gained further market share, analysts said, building on its increasing reputation for high quality and good will for avoiding a government bailout.
“We’re looking at a slow, fragile recovery in 2010,” said Mirko Mikelic, senior portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan, which manages $19 billion in assets. “It will be a slow slog. With the wind down of brands, GM’s going to be paying the price. And Ford will benefit.”
GM, based in Detroit, is shedding Saab, Saturn, Pontiac and Hummer to concentrate on its four remaining U.S. brands: Chevrolet, Cadillac, Buick and GMC.
In 1982, the U.S. had 177 million driving-age adults, 36 percent fewer than now, said Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Michigan. At the time, 59 new vehicles were sold per 1,000 adults, he said, compared with 42 this year.
“That would make it a worse recession than 1980-82” and indicate significant pent-up demand, he said.
Increase Forecast
Sales in 2010 may rise 19 percent to 12.4 million because of the need for new vehicles and improving availability of consumer credit, McAlinden said. Other preliminary forecasts for industrywide sales range from Chrysler’s outlook of about 10.8 million to Ford’s 12.3 million.
Chrysler declined to elaborate on its 2010 forecast, issued last month as part of its five-year plan.
U.S. sales totaled 13.2 million in 2008, according to Autodata Corp., after averaging 16.8 million this decade through 2007.
Surging unemployment and tight credit depressed auto sales, particularly in the first half of the year, when the annual rate didn’t exceed 10 million. The tumult in the economy led to government-backed bankruptcies that produced Auburn Hills, Michigan-based Chrysler Group LLC on June 10 and General Motors Co. on July 10.
‘Clunker’ Effect
Manufacturers, dealers and investors use the sales rate to compare monthly totals by taking into account seasonal buying patterns. February’s 9.11 million pace was the year’s lowest, and the highest was August’s 14.1 million, fueled by the Transportation Department’s “cash for clunkers” program.
During the one-month effort, the U.S. contributed as much as $4,500 toward the trade-in of an older model for a more efficient new one, boosting sales in July and August.
Rising vehicle sales in November and December, without federal support, add to signs that the U.S. economy is improving.
Ford Growing
Ford, based in Dearborn, Michigan, may report a 13 percent gain, while GM may say its sales this month fell 10.6 percent, based on the average estimates of 6 analysts surveyed by Bloomberg. Chrysler’s sales probably fell 13.9 percent, according to the analysts.
Ford fell 3 cents to $9.96 at 10:28 a.m. in New York Stock Exchange composite trading. The shares have more than quadrupled this year.
The estimates are based on daily selling rates. December had 28 selling days, 2 more than in 2008. Without the adjustment, sales comparisons will be about 8 percent higher. Tom Henderson, a GM spokesman, said he wouldn’t speculate on December’s results.
Among Japanese automakers, Toyota Motor Corp. sales gained 21 percent, Honda Motor Co.’s gained 7.8 percent, and Nissan Motor Co.’s rose 4.9 percent, according to estimates by Edmunds.com.
Toyota’s Decline
Toyota, which surpassed GM as the world’s largest automaker in 2008, experienced a 23.8 percent U.S. sales decline through November as President Akio Toyoda apologized for the company straying from its customer focus and for its biggest U.S. recall because of loose floor mats.
Toyota was probably overtaken by Germany’s Volkswagen AG last year in terms of global vehicle sales. VW’s U.S. share rose to 2.9 percent through November, up from 2.3 percent a year earlier.
Hyundai Motor Co., South Korea’s largest automaker, may report a 52.1 percent increase, according to Edmunds.com, a market-research firm in Santa Monica, California.
George Pipas, Ford’s chief sales analyst, said the automaker will report a full-year gain in U.S. market share in 2009 for the first time since 1995.
“It appears December will be the strongest sales month this year, except for August,” Pipas said. “That’s a nice way to close out 2009 and it’s a positive sign of higher levels of interest and buying next year.”
The following table shows estimates for car and light-truck sales in the U.S. Estimates for companies are a percentage change from December 2008. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of vehicles.
The estimates are based on daily selling rates. December had 28 selling days, 2 more than in 2008.
*T GM Ford Chrysler SAAR Patrick Archambault -11% 14% -9% 11.2 (Goldman Sachs) Joseph Barker NA NA NA 11.2 (CSM Worldwide) Jessica Caldwell -12.1% 16.9% -14.3% 11.1 (Edmunds.com) Christopher Ceraso -10% 16% -13% 11.3 (Credit Suisse) Gary Dilts NA NA NA 11.2 (J.D. Power) Christopher Hopson -8.3% 7.7% -18.1% 10.7 (IHS Global Insight) Rod Lache -16% 4.5% -19% 10.5 (Deutsche Bank) Himanshu Patel -6% 19% -10% 11.3 (J.P. Morgan) Average -10.6% 13% -13.9% 11.1 *T
--With assistance from Keith Naughton and Jeff Green in Southfield, Michigan. Editors: Jamie Butters, Steve Walsh