U.S. Car Sales Likely Best Since ‘Cash for Clunkers’


By Craig Trudell

U.S. consumers who set records for retail purchases during Thanksgiving weekend helped boost U.S. auto sales in November, which may have run at the fastest pace in more than two years.

Light-vehicle deliveries in November, to be released tomorrow, may have run at a 13.4 million seasonally adjusted annual rate, the average of 14 analysts surveyed by Bloomberg. That would top the 12.3 million pace of a year earlier and October’s 13.3 million rate, which was the best month since sales were helped by “cash for clunkers” in August 2009.

Consumers spent a record $52.4 billion during the holiday weekend, excluding autos, according to the National Retail Federation. General Motors Co. (GM) put a Santa Claus look-a-like in its “Chevy’s Giving More” ads, while Honda Motor Co. wished buyers “Happy Honda Days” with zero due at lease signing, enticing buyers who have deferred auto purchases.

“The automakers are sending the consumer buying signals right now,” Jessica Caldwell, an analyst for researcher Edmunds.com, said yesterday in a conference call. “The year-end sales, Thanksgiving sales, Black Friday sales, holiday sales, whatever it is, there’s some sort of sale out there. It makes sense for consumers that if now is the time to buy something, from jewelry, to a flat-screen TV, it must also be a good time to get a deal on a car, too.”

Analysts at Jefferies Inc., IHS Automotive and TrueCar.com may now increase their estimates for 2012 deliveries as Toyota Motor Corp. (7203) and Honda production recovers from natural disasters in Japan and Thailand. Demand is improving even as automakers maintain discipline by limiting incentives, they said.

‘Hit a Bottom’

“Underlying consumer demand is stable and we may have hit a bottom in terms of minimum level of sales that the industry will continue to carry going into 2012,” Jesse Toprak, an analyst for Santa Monica, California-based TrueCar.com, said in a phone interview. “Even though the stock market, housing market and consumer confidence all have been down or extremely volatile the last few months, new-car sales stood steady and in fact inched up a couple of notches.”

Consumer confidence surged in November by the most in more than eight years, The Conference Board’s monthly index showed yesterday. The percentage of consumers planning to buy a new vehicle within six months climbed to 4.1 percent, the highest since April, the New York-based private research group said.

The pace of U.S. auto sales had dropped below a 12 million rate in May and June after the March 11 earthquake and tsunami in their home country disrupted parts supply and production for Toyota City, Japan-based Toyota and Tokyo-based Honda.

Gaining Speed

The auto-sales rate stayed below 12.3 million in July and August. The slow recovery prompted analysts to cut their estimates for next year to 13.5 million light-vehicle sales, the average of 14 estimates compiled by Bloomberg. The average was more than 14.2 million before Japan’s tsunami hurt supply.

“We’re bottoming,” George Magliano, a New York-based economist at IHS Automotive, said of his firm’s estimate for next year, which was reduced to 13.2 million. “We’re looking at the strong month we expect for November and feeling better about where we’re going to go with auto sales.”

Toyota may say deliveries rose 5 percent from a year earlier, and Honda sales may climb 2.6 percent, according to the average estimates of five analysts surveyed by Bloomberg. Both automakers have reported year-over-year declines in every month since April.

“Several high-volume launches, such as the Camry for Toyota, should support continued strength in auto sales into 2012,” Peter Nesvold, a New York-based analyst for Jefferies, wrote in a Nov. 25 research note. Jefferies sees “upward pressure” to its 2012 sales estimate of 12.7 million, which was reduced from 13.6 million in August, he said.


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