U.S. November auto sales to show slow recovery
DETROIT (Reuters) - Major automakers are expected to report flat U.S. auto sales for November from a year ago -- another sign the industry is on the mend after a bruising downturn that forced extensive restructuring early this year.
The results would support the view that the worst of the industry's four-year slump is over, while analysts and executives caution that high unemployment and sluggish consumer confidence mean that any recovery would be slow and uneven.
U.S. auto sales in November are expected to come in at 10.5 million units on the annualized rate tracked by the industry, according to a median forecast of 36 analysts surveyed by Reuters.
November 2008 sales were 10.4 million units on the annualized rate and October 2009 sales were 10.5 million units.
"As expected, the recovery has been slow, but it is progressing," said Jeff Schuster, forecasting director at industry tracking firm J.D. Power and Associates.
General Motors Co's GM.UL U.S. sales analyst Mike DiGiovanni said industry sales could exceed an 11 million vehicle annualized rate in November, adding that he was encouraged by some signs of strengthening in the U.S. economy.
GM's forecast included medium and heavy trucks, which can add up to 300,000 to the annualized rate.
"Obviously, this isn't a perfectly linear trend. There are some setbacks in some areas," DiGiovanni told reporters, citing rising unemployment and a decline in single family housing starts in October.
He added: "Overall, we feel pretty confident that the economy is on its way back."
Auto sales provide a snapshot of American consumer demand, although the sector has badly trailed other categories of spending since the middle of 2005.
U.S. light vehicle sales have tumbled more than 25 percent through October this year. The year is expected to end with an annual sales rate of about 10.5 million units, the lowest level since the early 1980s. That would compare with 16.1 million in 2007.
Many analysts and auto industry executives have forecast a modest rebound next year to between 11 million and 12 million units, but some say 2010 won't be any better than 2009.
GM SEES SHARE GAINS, HYUNDAI TO SHINE
Industry forecasting firm Edmunds.com expects GM to post a 1 percent decline in sales, Ford Motor Co (F.N) to post flat sales and Chrysler Group LLC to post a 35 percent decline.
Edmunds.com also sees a 4 percent fall in sales for Toyota Motor Corp (7203.T), a 9 percent drop for Honda Motor Co (7267.T) and a 1 percent decline for Nissan Motor Co (7201.T).
Hyundai Motor Co (005380.KS), the only major automaker to increase U.S. sales this year, is likely to post a 26 percent increase, according to the forecasting firm.
GM's DiGiovanni said he was "cautiously optimistic" that the No. 1 U.S. automaker would see a U.S. market share gain in November for a fourth consecutive month since it emerged from bankruptcy in July. GM's U.S. market share totaled 21 percent in October.
GM and Chrysler are both struggling to reverse a long-running slide in sales after emerging from government-funded bankruptcies this year. But analysts see a bigger risk for Chrysler due to its aging, truck-heavy lineup and a dearth of new model launches this year and next.
Chrysler Chief Executive Sergio Marchionne presented an ambitious turnaround plan for the No. 3 U.S. automaker on November 4, saying it would more than double sales, roll out a dozen new models built on Fiat platforms and pay back debt to U.S. taxpayers over the next five years.
But analysts said Chrysler could be short on time to steer its faltering operations toward recovery and rebuild interest among American consumers.
(Reporting by Soyoung Kim; editing by Gunna Dickson)