U.S. auto
sales are expected to end 2009 on a slight upswing in December, capping a year
that saw General Motors and Chrysler collapse into bankruptcy and China
overtake the United States as the biggest car market.
The
deepest U.S. economic downturn since the Great Depression hammered auto sales
through most of 2009, but a poll suggests December will mark a third
consecutive month of modest growth in the annualized basis favored by industry
analysts.
The
results would point toward a gradual recovery in U.S. auto sales in 2010, an
outlook favored by most in the industry, but still leave sales rates well below
figures not imagined by even the most pessimistic of analysts two years ago.
The main
question: Will sales rally enough in December to make 2009 the worst year for
U.S. light vehicle sales since 1982, or will they fall short, marking the worst
year for U.S. auto sales since 1970?
TrueCar
analyst Jesse Toprak expects 2009's U.S. auto sales to be the worst since 1970,
or 1950 on a population-adjusted basis. Sales to corporate fleets or car rental
companies remain a wild card and could push the total higher, he said.
"I
think what we are going to see in 2010 in a nutshell is steady and slow
recovery," Toprak said in an interview. "The fundamentals that fuel
new car sales are improving, but there is still a lot of skepticism from
consumers."
U.S.
light vehicle sales are expected to be down nearly 40 percent in 2009 from the
most recent peak of nearly 17 million in 2005 -- and only because U.S.
government "cash for clunkers" incentives boosted sales sharply in
July and August.
The
collapse in U.S. auto sales in 2009 coupled with surging sales in China
approaching 13 million units this year, including commercial vehicles, marked a
stark shift in global vehicle volumes that was much quicker than many had
expected.
U.S. auto
sales on average are expected to come in at an 11 million unit adjusted
annualized rate in December, according to a survey of 21 analysts compiled by
Reuters. Their annualized outlooks ranged from 10.4 million to 11.4 million
vehicles.
That
would be the strongest monthly sales result of 2009 excluding the
"clunkers"-boosted results of July and August.
Barclays
Capital expects the annualized sales rate to come in at just above 11 million vehicles
in December.
"Excluding
the cash-for-clunkers months, this would constitute the strongest sales rate
since September 2008, suggesting the industry is witnessing a real improvement
in underlying demand for U.S. autos which bodes well for 2010," Barclays
analyst Brian Johnson said in a note on Thursday.
GRADUAL
SALES RECOVERY SEEN IN 2010
Overall,
Johnson said he expected GM to post one of its best market shares of the year,
in part due to heavy dealer incentives aimed at selling off the last of its
Pontiac and Saturn vehicles as the brands are shut down.
Ford
Motor Co's (NYSE:F - News) market share should be in line with the last few
months, he said. Chrysler is expected to post a steep year-over-year sales
decline, while Toyota Motor Corp (Tokyo:7203.T - News), Honda Motor Co Ltd
(Tokyo:7267.T - News) and Nissan Motor Co Ltd (Tokyo:7201.T - News) may
outperform the market, Johnson said.
J.D.
Power and Associates said last week it expected the sales rate to reach 11.2
million vehicles in December. The influential forecaster expects U.S. auto
sales to continue a gradual recovery to near 11.5 million vehicles in 2010.
TrueCar's
Toprak expects U.S. sales of about 11.4 million vehicles in 2010 and said it
could take three years or more for U.S. auto sales to return to the 14 million
range. He believes most domestic automakers could be profitable on industry
sales of 11.5 million per year after their massive restructurings.
Edmunds
expects sales to be up 13.3 percent in December from a year ago, or 5.2 percent
when adjusting for two extra selling days this year versus last December.
The year
cannot end soon enough for automakers. The GM (GM.UL) and Chrysler bankruptcies
left GM held 60 percent by the U.S. Treasury and Chrysler under the management
control of Italy's Fiat SpA (Milan:FIA.MI - News). They top the list of auto
industry distress in 2009, but those automakers were far from alone.
Toyota's
U.S. sales had plunged nearly 24 percent through November and it faces its
largest-ever recall to fix the accelerator pedals on nearly 4 million vehicles
after reports of sudden bursts of acceleration that led to deadly crashes.
Ford, the
only large U.S. automaker not to restructure in bankruptcy in 2009, expanded a
recall involving faulty cruise control switches that have caused fires. Ford
also must address a much higher debt load than its U.S. rivals.
The
long-expected acquisitions of U.S. auto assets by China-based companies took a
big step forward in 2009 as well, with Ford nearing agreement to sell its
Swedish brand Volvo to Zhejiang Geely Holding Group, parent of Geely Auto.
GM as
well has reached an agreement to sell some of its Saab brand assets to Beijing
Automotive Industry Holding Corp, or BAIC. GM was still considering potential
offers for Saab, while continuing the process of shutting down the brand as
part of its global restructuring if no deal can be reached.