Analysts are reporting that retail sales in the US are looking relatively strong for November, with some easing of concerns over the pace of recovery.
The actual November market results should be known tomorrow (December 2) and a strong showing for car sales will be seized upon by commentators as another sign that concerns over the slow pace of the US economic recovery and a possible ‘double-dip’ may be easing.
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“Strength in retail sales has continued past mid-November, revealing a trend toward sustained upward momentum,” said Jeff Schuster, executive director of global forecasting at JD Power and Associates.
“It appears that consumer concern regarding the pace of the recovery may be easing as the industry exhibits gradual improvement.”
Analysts point to a modest pick-up in underlying consumer confidence alongside renewed optimism in the autos sector – underlined by GM’s successful IPO last month – and a degree of pent-up demand for new vehicles following an unprecedented market slump. The data and news on the performance of the US economy has also been a little more positive lately (US economic growth accelerated in the third quarter and, while unemployment remains stubbornly high, jobs created in October were well up on expectations).
JD Power says that new-vehicle retail sales continued to track at a strong selling pace in November as the month closed, with a selling rate expected to come in at 10m units.
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By GlobalDataFor total sales, the seasonally adjusted annualised rate (SAAR) is expected to come in above the 12m unit level, with fleet sales accounting for 19% of November’s sales.
Edmunds.com analysts last week forecast that November’s SAAR for total sales will be 12.2m, ‘essentially flat from October 2010’ (but October was a strong month).
Encouragingly, incentives are down on year-ago levels. Average automaker incentives in the US are estimated by Edmunds to be USD2,490 per vehicle sold in November 2010, up USD51, or 2.1%, from October 2010, but down USD284, or 8.6% from November 2009.
Edmunds also sounded a positive note on the overall situation. “Seasonal fluctuations notwithstanding, we’re seeing some stability and consistency in the marketplace for the first time since the economic downturn,” said Edmunds Senior Analyst Jessica Caldwell.
“The automakers have realised that they can achieve profitability at this level of sales, and they seem to be settling into that reality.”
While sales in the US light vehicle market remain well down on pre-crisis levels, the auto industry in North America will be buoyed by signs of stability in overall demand and improving prospects for market recovery in 2011.
Eyes will be focused on the performance of the recovering domestics – especially on post-IPO GM which is suffering the effect of abandoned brands, meaning its real market share performance has been stronger than annual comparison numbers suggest. Ford will be looking to maintain growth momentum led by the Fusion and the ever popular F-Series pickup. Toyota USA will be hoping to spark car sales after a prolonged slump, while Chrysler will be looking to maintain its sales resurgence on the back of a highly successful roll-out for the new Jeep Grand Cherokee.
