Monday, January 31, 2011

U.S. auto sales may reach second-fastest rate in 17 months

U.S. automobile sales in January may have reached the second-fastest pace in 17 months, aided by rising business spending and consumer confidence.

January vehicle deliveries, to be released tomorrow, may have run at a 12.4 million annual rate, the average of six analysts’ estimates compiled by Bloomberg. The seasonally adjusted rate in December was 12.6 million, the fastest since the government’s “cash for clunkers” program in August 2009.

Spending on equipment and software rose at a 5.8 percent annual rate in the fourth quarter, showing businesses were investing in a recovering economy. Humphrey & Associates Inc., a family-owned electrical contractor in the Dallas area, added seven Chevrolet trucks and vans to its fleet in December after delaying the purchases during the recession.

“People are beginning to spend a little money they’ve had on the sidelines,” Randy Humphrey, 42, the company’s vice president, said in a telephone interview. “We are dependent on our commercial and industrial clients and their business growth to make ours. When they’re adding, we’re adding.”

U.S. consumer confidence rose more than forecast in January to the highest in eight months, the Conference Board reported last week, while the Thomson Reuters/University of Michigan final index of consumer sentiment fell less than analysts estimated. Gross domestic product grew at a 3.2 percent annual pace in the fourth quarter, the Commerce Department reported.

Analysts at Deutsche Bank AG and J.D. Power & Associates this month raised their estimates for 2011 light-vehicle sales after auto demand topped expectations in the fourth quarter. Gains from General Motors Co. and Ford Motor Co. may push the industry to a second annual sales increase after a 27-year low in 2009.

‘Strong close’

“There was such a strong close in December, and we aren’t expecting an equally strong payback,” said Jeff Schuster, the director of forecasting at J.D. Power who raised his full-year sales estimate to 13 million from 12.8 million. “That sets the year up for a good start.”

Full-year sales in 2010 were 11.6 million, or 31 percent less than the average 16.8 million annual rate before the recession, according to researcher Autodata Corp., based in Woodcliff Lake, N.J.

Ford, which last week announced full-year profit of $6.56 billion that was the most since 1999, may say sales climbed 18 percent, according to four analysts’ estimates.

“Ford still relies heavily on F-150 sales for the profit generation, and that segment is poised to outperform the market this year,” said Jesse Toprak, vice president of industry trends at TrueCar.com, who predicts a 16 percent gain for Ford in January.

Chevrolet pickups

GM may report a 9.2 percent increase in January sales, the average of four estimates. The automaker announced this month it would add a third shift and about 750 jobs to its assembly plant in Flint, Mich., to meet rising demand for heavy-duty pickups.

The largest U.S. automaker said its top-selling Chevrolet brand’s sales to small businesses accelerated in the fourth quarter, including a 54 percent surge in December from a year earlier.

Federal Reserve policy makers last week kept measures to stimulate the economy in place after President Barack Obama reached an agreement with Republicans in December to extend by two years tax cuts enacted during President George W. Bush’s administration.

“Interest rates are low enough, credit availability is improving, and we didn’t get a jolt from tax increases that would have affected higher-income taxpayers who buy a lot of vehicles,” said Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio. “All those things are clear pluses helping to bolster demand.”

Toyota sales

Toyota Motor Corp., the only large automaker to post a U.S. sales decline last year, may report a 16 percent gain for January, the average estimate of four analysts.

The world’s largest automaker suspended U.S. sales and production of eight models a year ago that accounted for more than half its deliveries. The company has recalled more than 18 million vehicles globally for a variety of reasons, including unintended acceleration, since the fall of 2009.

Barclays Capital analyst Brian Johnson predicts a 2.8 percent decline for Toyota, its fourth straight month of a decrease in sales from the earlier year. Deliveries of the top-selling Camry and Corolla cars may decline at least 10 percent, and Lexus sales also may drop, Christopher Ceraso, an analyst at Credit Suisse in New York, wrote in a Jan. 27 research note.

Chrysler estimates

Chrysler Group LLC may have increased sales 27 percent, the average of four analysts’ estimates. The automaker is preparing for an initial public offering this year and has said it can break even on an operating basis with 150,000 fewer vehicle sales annually.

The company is selling about 20 percent of its cars to fleet buyers such as governments and rental-car companies, down from about 50 percent in some months last year, Caldwell said.

Chrysler is considering two new pickups, a seven-passenger Jeep and a smaller minivan as part of a plan to boost global sales to 2.8 million in 2014. Worldwide deliveries gained 21 percent to 1.6 million last year, the automaker said.

Deliveries at Honda Motor Co. may have risen 24 percent, and Nissan Motor Co.’s sales may have increased 14 percent, according to the average of four analysts’ estimates.

No comments:

Post a Comment