We are coming down the stretch, and everyone in the auto business will be biting their nails to see just how much better this year will be when the auto sales numbers are tallied, versus 2010 or the dread 2009, when sales hit a 27-year low.
Well, save your nails for 2012. J.D. Power and Associates and LMC Automotive say it's looking good. The Westlake Village, Calif. pundits say retail sales are finishing the last fifty yards in a dead sprint, based on the Power Information Network of dealership sales numbers and LMC Automotive. (If you’re scratching your head about LMC Automotive, it is a division of UK-based agribusiness consulting-focused LMC Group. LMC Automotive acquired J.D.P's automotive forecasting division last month as part of the latter’s program to split into a financial and market data company and an educational publisher.)
J.D. Power reports that December new-vehicle retail sales will come in at 1,033,700 units. If this is correct, December will have been the first time that retail sales topped 1 million units since the government's Cash for Clunkers adrenalin injection in August 2009. J.D. Power says that when fleet sales are added to the mix, total December sales will come in at 1,230,100 units, an 8% improvement over the month last year. Extrapolated to the full year, December's volume translates to 11.2 million units.
Back in 2009, J.D. Power President Finbarr O'Neill predicted sales would not come back to pre-recession days any time soon, and that prediction is holding water. Still, the strength of the market is borne out by the fact that stronger sales are not being driven entirely by incentives, per John Humphrey, SVP global auto operations at the firm. In a statement, he says December sales are performing well even though total incentive spending -- about $2,700 per vehicle -- is down 10% from last year. “The industry has managed through another series of external shocks and is in a healthier position as the year closes,” he said.
With December sales tracking as expected, LMC Automotive is holding its 2011 forecast at 10.3 million units for retail light-vehicle sales and 12.7 million units for total light-vehicle sales. Looking forward to next year -- which, given the tentative nature of the economy, is a reach -- LMC Automotive’s forecast is 13.8 million units for total light-vehicle sales next year, and 11.3 million units for retail light-vehicle sales.
“For the third straight time, light-vehicle sales are posting strong selling rates at the close of the year,” said Jeff Schuster, SVP of forecasting at LMC Automotive. “Next year, the automotive industry will look to build upon the strong finish to 2011, but the real test in 2012 will be weathering a summer selling slowdown and posting a full year of a progressive recovery,” he said in a statement.
The firms report that Honda and Toyota have pretty much returned to speed after the earthquake and tsunami in Japan and flooding in Thailand hobbled their production schedules. They say that production for Honda and Toyota is down by almost 16% to date, and production for Japanese manufacturers overall is down 7% from 2010.
Hyundai Group production is up 47%, and the Detroit three are 15% up in year-to-date production. The Europeans are up 37%.