U.S. Auto Sales Motor Ahead By 15% As Industry Recovers From Sandy

by Trefis Team
Rate   |   votes   |   Share

U.S. auto sales surged 15% to 1.14 million in November helped by sales of small cars and hybrids. [1] Vehicle sales could slow down in 2013 as uncertainly looms over the outcome of the fiscal cliff with the lawmakers failing to reach a consensus. Without any legislation, certain provisions encompassing tax increases and reductions in fiscal spending would go into effect from January 1, 2013.

It is widely believed that such a move could push the economy back into recession in 2013. However, auto sales certainly benefited from a low interest rate environment created by quantitative actions by the Fed as consumers continued to take advantage of cheap financing.

In Japan We Trust

Japanese automakers were certainly among the winners as the companies continued to post strong growth rates over the production limitations in 2011.

Toyota sold 17% more vehicles this November than it did in the previous year. The automaker is on course to sell more than 2 million vehicles in the U.S. in 2012, the initial target it set out at the start of the year. To keep its sales rolling next year in the U.S., Toyota debuted the new RAV4 at the Los Angeles auto show. The Japanese automaker expects the model’s sales to touch 200,000 units in 2013, which is 20% more than the model’s sales this year.

Honda’s sales grew 39% helped by the new Accord launched earlier in the year. Furthermore, Honda’s sales could carry on the sales momentum next year as the automaker debuted its refreshed model of the Civic at the Los Angeles auto show last week. Although the Civic is the highest selling small car in the country, it didn’t live up to its expectations and was criticized for its bland styling and average performance. The Accord and the Civic account for almost a third of Honda’s American sales.

See our complete analysis for Honda stock here

Ford Consolidates

Ford’s sales expanded 6.5% buoyed by a whopping 76% rise in small car sales. However, its pick up trucks and SUVs such as the F-series and the Escape still account for two-third of its sales in the U.S. and could only manage only 2.9% growth. [2]

The sales of trucks/SUVs industry-wide were strong in the first half of the year but slowed down in the latter half as consumers switched to more fuel efficient, smaller cars in the wake of persistently high fuel prices. On the other hand, construction spend grew 1.4% in October, beating expectations, which could be a harbinger of better things to come for Ford as the construction industry is heavily dependent on large pick-up trucks. [1]

Ford has done well in 2012 with sales up 5% through November. It has introduced several new models which command a better pricing and the general consensus seems to be that the quality of the automaker’s cars has improved.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. U.S. November Auto Sales Rise, December 3, 2012, wsj.com [] []
  2. Summary of U.S. Auto-Sales Data for November, December 3, 2012, wsj.com []
Rate   |   votes   |   Share


Name (Required)
Email (Required, but never displayed)
Be the first to comment!