New vehicle sales in the US are likely rebounding this month from a disappointing November, and the big winners again are expected to be the top Asian brands, analysts told the Associated Press (AP).
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Merrill Lynch analyst John Casesa reportedly forecasts a brisk annualized selling rate of 17.6 million units in December, versus a rate of 16.7 million for the first 11 months of 2004. Burnham Securities analyst David Healy predicts a slightly lower selling rate of 17.2 million to 17.3 million for December, below last December’s pace of nearly 17.5 million units.
AP said the rates indicate what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2003 were 16.7 million.
Both Casesa and Healy reportedly expect sizable gains from foreign brands such as Toyota and Nissan. Both also predict General Motors to be down sharply from a year ago, despite its ongoing “red tag” sales promotion and rebates of several thousand dollars on a variety of vehicles.
“So far, the big Japanese makers – Honda, Toyota and Nissan – are having another stellar month, while we think GM and Ford are down,” Casesa said Wednesday in a research note cited by the Associated Press. “As a result, we believe Detroit must respond to avoid a multipoint share loss in December, and that GM and Ford will pull out all stops to drive volume between Christmas and New Year’s Day.”
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By GlobalDataAP noted that GM’s latest sales push was widely expected after business fell 13% last month and its US market share sank to one of its lowest points on record at 24.8%. Its US sales to the end of November were off nearly 1% from a year ago. Ford’s business was off nearly 5% for the first 11 months of 2004.
AP added that DaimlerChrysler’s Chrysler Group has been the lone gainer among Detroit’s Big Three. Its sales, lifted by heavy demand for its Chrysler 300C sedan, were up 3.2% to the end of November.
Even if GM and Ford sweeten their incentive offers in the next week, Casesa reportedly said, the efforts are likely to be hampered by two factors.
First, “both have already pushed incentives so high for so long, their ability to stimulate demand is limited,” he said, according to AP. “Second, Christmas and New Year’s holidays fall on weekends, and weekends are when most cars are sold” anyway.
Casesa’s year-over-year predictions for December are GM down 5%, Ford off 7% and Chrysler up 2% and he expects foreign brands to be up 8%, led by double-digit gains at Toyota, Honda and Nissan, AP added.
“Honda, Toyota and Nissan seem to have stepped up incentive spending by offering dealer rebates and low lease rates on their high-volume products” such as the Toyota Camry and Honda Accord, Casesa reportedly noted.
The Associated Press said Healy’s December outlook is GM off 15%, Ford up 1%, Chrysler up 4%, Toyota up 13% and foreign brands overall up 6%.
