* U.S. sales expected to rise 11 percent to 13 percent
* Annual sales rate could hit highest level since Feb 2008
* Growth to continue in 2013; fiscal cliff not a concern
By Bernie Woodall and Nichola Groom
LOS ANGELES, Nov 29 U.S. auto sales are expected
to rebound robustly in November, potentially hitting their
strongest pace in more than four years, as consumers in the
Northeast returned to dealerships after superstorm Sandy hurt
demand in late October.
November sales were also boosted by pent-up demand for
vehicles as consumers replaced their aging cars and trucks,
analysts and executives said.
"People need a car and we've seen that pick up really
quickly, especially in the last 10 days," Brian Carolin, senior
vice president of sales and marketing at Nissan North
America, said at the Los Angeles Auto Show on Wednesday.
"I was chatting with someone from one of the rental
companies earlier," he said. "They had to ship more cars into
the Northeast because of the demand. Obviously, people are in
rental vehicles, they are waiting for their insurance claims to
be processed and then they are going to come back into the
market quite strongly."
Automakers are scheduled to report U.S. sales results for
November on Monday and analysts expect an increase of 11 percent
to 13 percent as the sector nears completion of its strongest
year since 2007. Auto sales are an early indicator each month of
U.S. consumer demand.
One concern for the industry is the "fiscal cliff" the
United States faces - a combination of government spending cuts
and tax increases due to be implemented under existing law in
early 2013 that may cut the federal budget deficit, but also tip
the economy back into recession. Auto executives expect
Democrats and Republicans to reach a deal to avoid that issue.
"You may have to grab your wallet, but I think they will
have a deal," said Jim Lentz, CEO of Toyota Motor Corp's
USA sales division. "The thought of (no deal) is not a
General Motors Co's head of North American
operations, Mark Reuss, said the aging vehicles remain a
powerful driver for sales and the specter of the fiscal cliff is
not driving decision-making at the U.S. automaker. "There's
still a lot of pent-up demand," he said. "I'm not making
production decisions on it."
Analysts and executives predict an annual sales rate in
November of 14.8 million to 15.3 million vehicles, rebounding
from October's disappointing results when superstorm Sandy
affected buying in the last few days of the month.
Morgan Stanley analyst Adam Jonas, who expects a November
annual rate of 15 million vehicles, pointed to the advanced age
of many vehicles on the road, a factor industry officials have
been touting for at least a year. The average age of a car has
hit a record high of almost 11 years.
"It's pent-up demand and not just a Sandy rebound," Jonas
said in a research note. "Most of this demand reflects the
buoyancy in consumer expectations."
Mark Fields, who will become Ford Motor Co's chief
operating officer on Saturday, shared that optimism at the auto
show on Wednesday.
"I wouldn't be surprised to see the industry start with a 15
(million)," he said of the sales rate. "And it's particularly
strong in the Northeast as the area recovers from Sandy."
The improving U.S. housing market also offers hope for car
sales as rising home values boost consumer confidence.
"House prices have quit their free fall and are stabilizing
and moving upward in most states," Paul Taylor, chief economist
for the National Automobile Dealers Association, told Reuters on
Tuesday at a conference in Los Angeles hosted by J.D. Power and
the dealer trade group.
He expects U.S. auto sales next year to rise by about 1
million vehicles from 2012. Sales this year are expected to
finish as high as 14.4 million vehicles, which would mark the
strongest numbers since 16.1 million in 2007 - before the
recession drove GM and Chrysler into bankruptcy.
Nissan's Carolin said the automaker is optimistic the market
will pick up in 2013, hitting about 15 million sales. "Kind of
the nice progressive growth we've seen over the last couple of
years since the big recession," he said.
Toyota's Lentz said November auto sales are typically weaker
than the months around it, so the strength this year is notable.
Lentz expects the annual sales rate in November to fall
between 14.8 million and 15.2 million vehicles. He said the
Japanese automaker believes 400,000 cars and trucks were
destroyed by Sandy and 100,000 of those were new vehicles.
John Mendel, executive vice president of Honda's
American operations, expects a rate of about 15 million.
Industry researcher TrueCar.com expects November sales to
rise almost 13 percent, a nd the annual sales rate to finish at
15.2 million vehicles, which would mark the highest monthly
level since hitting 15.5 million in February 2008.