US Nov auto sales rise, recovery gains ground
Detroit, December 2, 2010
US auto sales rose 17 per cent in November from a year earlier, a stronger-than-expected gain that pointed to a slow but steady return in consumer demand from the depressed levels of a year ago.
The annual sales rate was near 12.3 million vehicles in November -- flat with October -- as American consumers were lured into showrooms by month-end discounts for new car purchases that many had delayed through the recession.
Ford Motor reported a 24 per cent increase in sales. Chrysler sales rose 17 per cent and General Motors Co sales were up 11 per cent overall. Ford sales exclude the Volvo car unit it sold to China's Geely in August.
"We are seeing consumers coming back in the marketplace not just because they need a car but because they want one, which is a significant change from the buying patterns we have seen in the last nearly two years," TrueCar analyst Jesse Toprak said.
Toyota Motor Corp sales dropped 3 per cent in November, slightly deeper than the 2 per cent drop analysts expected, illustrating the difficulties Toyota still faces in winning back US consumers a year after starting recalls that rocked its reputation for quality and safety.
"Investors are anticipating signs of recovery at Toyota and that's been reflected in the recent share performance," said Kurt Sanger, a Tokyo-based analyst at Deutsche Securities, noting that Toyota gained the most among major Japanese auto stocks in the past month.
"But today's (US sales) data showed that it's not an easy one-way road to the past."
Toyota's shares fell 0.8 per cent on Thursday morning in Tokyo, bucking a 1.4 per cent rise in Tokyo's main index and strong gains in other automakers' shares.
Toyota, the world's top automaker, said it cut back on sales to fleets including car rental agencies by 60 per cent in November from a year earlier, while its sales to consumers rose about 5 per cent.
Toyota has recalled about 14 million vehicles worldwide since last November, including 11 million in the United States. On Monday, Toyota said it would replace potentially defective coolant pumps on 378,000 US Prius hybrids.
"Without new product to compete with and stripped of its bullet-proof quality reputation, Toyota is forced to sell on the deal," Edmunds.com senior analyst Jessica Caldwell said.
GM said it expected that the growing pent-up demand for cars -- evidenced by rising used-car prices and the increasing age of cars on the road -- would bolster sales as consumer demand recovers in 2011.
"It's not going to happen overnight, but we think through 2011 we're going to see a continued gradual improvement," said Jim Bunnell, general manager of GM's US sales operations.
Auto sales for November are one of the first snapshots of consumer behavior at the holiday shopping season. However, automakers typically run year-end discount programs from before the US Thanksgiving holiday through year end.
Thanksgiving holiday deals sponsored by individual dealers and manufacturers, including Toyota and Nissan Motor Co, lifted sales late in November, analysts said.
"That one day felt like 2006 again," Toyota brand US sales chief Bob Carter said of the Friday after Thanksgiving.
Paul Ballew, chief economist at Nationwide, said the November results were "solid" but not "spectacular."
"The market overall is showing signs of the recovery at the end of the year we had hoped for," Ballew said.
Internationally, Japan November car sales fell 31 per cent excluding mini-vehicles, a third consecutive decline. Most European markets also posted November auto sales declines after government incentive programs came to an end.
Car sales fell 11 per cent in France, 25.5 per cent in Spain and 21 per cent in Italy. – Reuters