USA December 2012: Predicted at +9%, best year since 2007
* NOW UPDATED with new predictions. See the full article by clicking on the title! *
Automotive News published another round of predictions for the US new car market in December ahead of carmakers’ official figures on Thursday. Sales are expected to rise by 9% year-on-year, capping off the best year for new car sales in the country since 2007. 2012 is predicted to finish at 14.5 million vehicles, a 13% growth over 2011 and impressively the third consecutive year of double-digit year-on-year gain in the US.
Manhattan, Tuesday 30 October 2012. Picture by TheAustralian.com.au
The industry also got a boost from sales that were delayed due to Hurricane Sandy, reported Automotive News. Barclays Capital analyst Brian Johnson estimated that 25,000 to 30,000 vehicles sold this month were delayed from November due to Superstorm Sandy. ”We note, however, that we do not expect post-storm replacement demand to persist much beyond January,” Johnson said.
So a strong December, but the start of 2013 may be different. Automotive News says “gains in 2013 are expected to slow to single-digit growth, with several analysts forecasting only modest improvements in U.S. consumer confidence and employment.” Indeed the strong end of year could be overshadowed by concerns that consumers will curb spending in January due to the “fiscal cliff”.
AN reports that “U.S. consumer confidence fell to a 4-month low in December on worries over the $600 billion in automatic spending cuts and tax increases that take effect unless Congress acts to stop them”. Strong incentives on GM full-size pickups and an excellent performance from luxury brands are the other two headlines for December new car sales in the US…
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Auto sales are an early indicator each month of U.S. consumer demand and industry executives have pointed to the improving housing market and consumer confidence as reasons for optimism in 2013. Higher home prices can help American car shoppers feel wealthier and translate to higher auto sales, industry research firm Edmunds.com said, reported by Automotive News.
Jeff Schuster from LMC Automotive said “the U.S. light-vehicle sales market continues to be a bright spot in the tremulous global environment. Assuming the fiscal cliff hurdle is cleared, 2013 is one step closer to a stable and sustainable growth rate for autos, with volume above the 15 million unit mark.”
Automotive News says December has been an excellent month for luxury brands so far, with sales on track to account for 16% of the market based on J.D. Power estimates. That would make it the segment’s highest share since December 2009 . John Humphrey from J.D. Power said “new and redesigned vehicle introductions, along with enhanced incentive activity, have been key drivers of the recovery in the luxury market.”
AN reports that according to TrueCar.com data, large trucks had an average discount of 11.4% in December, 75% higher than the overall industry discount of 6.5%. Analysts said General Motors in particular layered on incentives to cut its inventory ahead of its introduction of 2014-model trucks in the second quarter of 2013. ”All eyes will be on the full-size pickup segment where GM clearly got more aggressive to draw down their 139 days of inventory,” RBC Capital Markets analyst Joseph Spak said in a research note.
The preferred level in the auto industry is about 80 days of supply for full-sized pickup trucks like GM’s Chevrolet Silverado and GMC Sierra. Ford Motor Co. had 89 days of supply for its F-Series pickup trucks, reports Automotive News.