DETROIT U.S. new-vehicle sales for December are expected to show continued steady growth, but analysts say much of the gains are linked to buyers who delayed purchases and therefore will not an indicate a strengthening economy.
December's annualized sales rate is expected to top 13 million vehicles for the fourth straight month as the steady growth of sales continues to belie uncertainty about the overall economy, said J.D. Power and Associates and LMC Automotive.
December U.S. auto sales likely rose 9 percent from the previous year, 30 analysts surveyed by Thomson Reuters indicated, to 13.6 million vehicles sales on an annualized basis. December 2010 annualized sales were 12.5 million.
"December's sales rate was a continuation of the rather slow and steady recovery that now symbolizes 2011," said Jesse Toprak of TrueCar.com. "This year was absent of a blockbuster sales month but we see this pace of growth as healthy and sustainable in the coming year."
Major automakers report December monthly sales on Wednesday, January 4. Each month, U.S. new vehicle sales are an early indicator of consumer spending.
TrueCar said it expects the biggest year-on-year sales gains for December to be shown by South Korea's Hyundai Motor Co (005380.KS), up about 40 percent, and Chrysler, up 34 percent. Michigan-based Chrysler is primarily owned by Italy's Fiat SpA FIA.MI.
Edmunds.com Vice Chairman Jeremy Anwyl expressed concern that December sales were not stronger, considering that Japan's big three automakers, Toyota Motor Corp (7203.T), Honda Motor Co (7267.T) and Nissan Motor Co (7201.T), have largely recovered from low inventory caused Japan's March earthquake.
"When you consider that sales performance late this year was boosted by a tailwind of buyers who deferred their purchases this summer, it suggests we may have some sales speed bumps to deal with next year," Anwyl said.
Jefferies & Co analyst Peter Nesvold said flooding in Thailand several months ago will have an impact on production of Japan's major automakers, "potentially triggering a replay of this summer's inventory constraints" in the coming months, albeit on a smaller scale.
TrueCar predicted that full-year 2011 U.S. auto sales will reach 12.8 million, up 10.3 percent from the 11.6 million in sales for 2010.
That is still much lower than the nearly 17 million in U.S. annual auto sales in a 10-year period through 2007. In 2008, recession began to take its hold on the auto industry and in 2009 two of the three major U.S. automakers filed for bankruptcy.
TrueCar expects 2012 U.S. sales to reach 14 million.
The United States is the world's second-biggest auto market behind China. However, the profit per vehicle is much higher in North America than in China, in part because margins are higher for pickup trucks and sports utility vehicles.
The same forecasters surveyed by Thomson Reuters expect U.S. truck sales to take up 57 percent of December auto sales, and passenger cars 43 percent. Trucks include sport utility vehicles and most pickup trucks.
Sales incentives, which cut into profit per vehicle, are thought to have fallen again in December, said Nesvold.
Edmunds said it expects General Motors Co (GM.N) to take 19 percent of the December U.S. market and increase sales by 5 percent from last year. Ford Motor Co (F.N) is expected to show a sales gain of 8 percent and gather a 17 percent share of the U.S. market, Edmunds said.
Toyota will be third with a 14 percent market share, Edmunds said, and will show a 3 percent sales drop from December 2010.
(Reporting by Bernie Woodall; Editing by Steve Orlofsky)