November auto sales in the US highest since April

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Model month for car sales

A model month for car sales. Image: PMC 1stPix/Flickr/CC BY-ND

Auto sales in the U.S. rose by 14 percent in November. The was the largest increase since April. Chrysler Group, Hyundai-Kia, Mercedes-Benz and Volkswagen led the pack with the highest gains. Honda was the only automaker to see a decline.

Highest since ‘cash for clunkers’

The November figures show the third straight month that the annualized auto sales rate has topped 13 million. On a seasonally adjusted basis, it was the single largest increase since August 2009, when the U.S. “cash for clunkers” incentive program was offered following the bankruptcies of Chrysler and GM. analyst Jessica Caldwell said:

“Consumers have been waiting for this. Cars are getting old, and people are getting to the point where they need to replace them. There’s recession fatigue and people want to buy. We’re getting tired of being in this saving pattern.”

Factors increasing numbers

Analysts say several factors buoyed the November sales rates. Lower fuel prices and higher demand from business owners contributed to the gain, as did increased incentives. The Black Friday sales moved many vehicles out of the showroom and onto the highways.

Another factor in the increase was more model selection. The diversity of choices was due to the Japanese auto industry recovering from the March earthquake and tsunami that devastated the country and its automotive industry. The shortage of Japanese-made vehicles during the summer depressed sales.

Peter Nesvold, an analyst with the global securities and investment banking group Jeffries, said:

“Our dealer checks this month suggest that inventories are no longer a constraining factor on auto sales, as the ‘v-shaped’ recovery following the Japanese earthquakes and tsunami essentially has run its course.”

Some warn against optimism

Nesvold also warned the the recent flooding in Thailand could have some negative impact on production in Japanese plants in months to come.

The Thailand floods were also the reason Honda cited for its sales drop — the only one recorded by any major automaker in November. The floods, the automaker said, prevented necessary parts from reaching its U.S. plants.

Jessica Caldwell also warned that the increase may have much to do with “deferred demand” and may not portend long-tern gains.

“While sales are strong now, we are still witnessing the deferred demand from the summer months, so we cannot expect this sales level to be considered the new normal.”


Bloomberg Businessweek 
Automotive News 


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