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Analysts Predict High Automotive Sales In November

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On: Thu, Dec 2, 2010 at 10:47AM | By: Sherry Christiansen

Analysts Predict High Automotive Sales In November

It looks as though November may bring great news for the automotive industry, as well as the economy, as auto sales seem to be shaping up for a strong monthly sales report.

With recent months increased demand for trucks and SUVs, U.S. light vehicle sales are projected to rise to a level that may equal the fastest pace in 2010.  This week, automakers will release November sales numbers, which analysts are estimating to reach an adjusted annual rate equal of 12.2 million units, according to a recent Bloomberg News report. That figure is a close second to October’s gross adjusted annual rate of 12.3 million units.

True car.com and J.P. Powers have adjusted their 2011 sales forecast to 12.7 million units, significantly higher than many analysts had been predicting just a few months ago.

There are many new high-volume models, including the 2011 Ford Explorer and the 2012 Ford Focus; as well as the 2011 Hyundai Elantra that, according to many analysts, will continue to contribute to the turn-around of the automotive market.

Ford will see an estimated 21% sales increase, according to the average estimate from 5 analysts. Ford Motor Company is currently the world’s highest earning automaker with an annual net income of $6.37 billion so far this year. This is the highest sales record of any automaker since 1998.

TrueCar is predicting that total U.S. light vehicle sales will be estimated at 868,283. That's up 16% from November of last year and up 9% from October 2010.

Compared to last month, retail sales are down 9%, but they're up almost 17 percent versus November 2009.

Every major automaker except Toyota anticipates posting higher sales this November over November of 2009—with Hyundai/Kia sales up 45% and Ford sales up more than 21%. TrueCar anticipates Chrysler sales will be down 17.5%, while Toyota will drop nearly 10%.

Incentive spending has risen slightly, at an industry-average of $2,712; that's up slightly from last November and up 6 % from last month.

Ford and Chrysler are predicted to have increased sales by as much as 20%—which is the average number from 5 analysts, and GM could realize a 13% increase in sales for November.

“Domestics will be up by a huge number this month, with a lot of it coming from strong truck and SUV sales,” said Jessica Caldwell, an analyst for researcher Edmunds.com in California. Trucks and sport-utility vehicles have better sales “as it gets colder, plus we’ve seen higher demand in the last few months as gas prices have been stable for some time.”

Deliveries of Ford’s F-Series pickups climbed 30% through October, while sales of Chrysler’s Jeep Grand Cherokee SUV rose 41%, according to the reasearch firm Autodata Corp. GM’s sales of the Chevrolet Equinox SUV reportedly surged 75%.

GM’s sales may benefit from its recent IPO, said Jesse Toprak, vice president of industry trends at TrueCar.com, who estimated a 13% increase in the automaker’s November sales. GM’s sold shares at $33 each on Nov.17.

“If you see the company performing, the stock price holding up, and perhaps GM posting another profit in the fourth quarter, that adds to brownie points with consumers,” Toprak said.

Toyota is the only major U.S. automaker that is expected to see declining sales—a drop of 3%-10% is predicted, as a result of over 15 million vehicles that were recalled around the world for unintended acceleration problems.

“The effects of the recalls appear to be lingering over Toyota like a black cloud,” said Toprak of TrueCar. “The image of a company can be demolished easily overnight. It takes much longer to move the needle in terms of improving your image.”

November is usually one of the worst months of the year, according to Toprak with a 10% decline from October being average. This month “appears to be right in line with historical patterns,” Toprak said.

“This is a very weak time of year and always has been, even in a good market,” Earl Hesterberg, CEO of Group 1 Automotive Inc., said. “You won’t hear anybody jumping for joy, but it certainly seems November is generally in line with what we saw in October. I don’t think anything has turned downwards other than it’s seasonally a weak time.”

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