Trucks and SUVs Should Fuel November Auto Sales

Strong Demand for Trucks, SUVs Seen Boosting November Auto Sales Rising confidence among U.S. consumers is expected to translate into healthier numbers for the nation's automakers when they report November sales figures Wednesday. Domestic automakers fared better than their foreign counterparts as sales rebounded further from last year's anemic levels, according to analyst forecasts.

Overall, the industry is expected to rack up sales of about 868,000 units, up 16% from November 2009, according to analysis by TrueCar.com, an online automotive pricing guide. "Several consecutive months of year-over-year retail sales improvements indicate that the recovery in consumer demand has not been a coincidence," says Jesse Toprak, senior analyst at TrueCar.

Compared to October, November sales are forecast to fall about 9%, following a traditional seasonal trend, as consumers' shift their attention toward holiday shopping and away from car shopping.

TrueCar forecasts show November sales translating to a 12.23 million annual rate, just shy of October's 12.25 million, which was the fastest pace since the federal government's "cash for clunkers" program was under way in 2009. Expectations call for 11.5 million to 12 million in total sales for the year, indicating that demand during the last two months has been exceptional.

Detroit Sees Strongest Gains

Consumers are showing increased interest in sport-utility vehicles and trucks, particularly those sold by Detroit's Big Three -- General Motors (GM), Ford Motor (F) and Chrysler Group. The boost in demand is expected to result in sales increases of 20% at Ford and Chrysler, while those at GM likely rose around 13%, Bloomberg News reported.

"[Domestic automakers] will be up by a huge number this month, with a lot of it coming from strong truck and SUV sales, Jessica Caldwell," senior analyst at Edmunds.com, told Bloomberg. Despite the recent rise in gasoline prices, consumers largely view fuel costs as stable, which is resulting in better sales of trucks and SUVs as the weather turns colder.

Models that have proven popular include GM's Chevrolet Equinox compact SUV, Ford's F-Series line of pickup trucks and Chrysler's recently revamped 2011 Jeep Grand Cherokee, which arrived at dealerships last summer.

Among foreign automakers, TrueCar expects Toyota Motor (TM) and a combined Hyundai Motor and Kia Motors to lead the pack, with near-10% increases in sales for each. Honda Motor (HMC) and Nissan Motors (NSANY) are forecast to report increases of 8.3% and 7.7%, respectively, compared to November 2009 levels.

In terms of market share, Ford is seen as having benefited most from improved sales, according to TrueCar's analysis, with its percentage of the U.S. market rising to 17.5%, up from 16.6% last month. Most other automakers will see market share levels comparable to those of October. The exception is Chrysler, which is forecast to slip to 8.6%, nearly a full percentage point drop from the previous month.

Still Not Like the Good Old Days


The strong pace of sales is expected to continue through to year-end, according to TrueCar's Toprak. "We have high expectations from December sales as year-end clearance events should drive the industry to its best unit sales total of the year," he says.

Based on rising demand led in part by new products, TrueCar is forecasting annual auto sales of 12.7 million units for 2011, some 700,000 more vehicles than analysts most optimistic predictions for 2010 of 12 million units. Still, the numbers are a far cry from the roughly 17 million-unit pace the U.S. auto market averaged during the eight years from 2000 to 2007.

Analysts are divided whether the industry will soon return to that pace or whether domestic sales will settle somewhere above current levels, but well below prerecession levels. It's clear, however, that at least for Detroit's automakers, the worst of the sales doldrums appear to be in the past.

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johnskii

With gasoline and oil prices being artificially manipulated to the high side I doubt if many people are considering purchasing a gas guzzling SUV. If gasoline and oil prices were at REAL levels ( Oil $40-$50/barrel - Gas $2.00-$2.25/gallon) range then I would say your right writer Schlep.....

November 30 2010 at 4:01 PM Report abuse +1 rate up rate down Reply
ultraz2

Couldn't agree more with both previous comments, what a waste of money to see someone driving a factory pickup special that cost 60,000 and will never be used as a pickup for work purposes. You know the kind billy bobs drive around saying look at me I'm driving around in a 60,000 dollar pick up truck. Then they drive home and park in their driveway next to their 15,000 dollar trailer that they live in.

November 30 2010 at 3:33 PM Report abuse +1 rate up rate down Reply
DDerr

Trucks and SUVs are one of Americas biggest sins. Only 1 in 3 is actually ever required for regular use, meaning soccer moms, and morons drive around these gas guzzling pigs for absolutely NO GOOD REASON. The SUV and Truck epidemic has also caused the failure of GM and other American Car manufacturers, Instead of using their little bean counting heads to think of a responsible future, the execs at our top car companies have continued to ignore the rise of Hybrids, and our need to DRIVE SMALLER FRIGGIN CARS! FACT: While Toyota spent $1 billion on developing the Prius, GM spent $1 billion on marketing the wonderful HUMMER. HMMmmmm which was the smarter investment?

November 30 2010 at 12:35 PM Report abuse +1 rate up rate down Reply