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US Auto Industry To Witness a Perfect Year Ending

December 02, 2013 | About:
Neha Marwah

Neha Marwah

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The automakers are extremely hopeful that November sales would give their delivery numbers a big boost. Industry experts estimate that the month sales would increase 4%, thanks to the Black Friday deals. Kelley Blue Book predicts that as compared to the previous month, auto sales are expected to rise 4% in November.

A sequential increase in sales in a year which is already so strong is a great achievement. 2013 has almost been an ideal year for the US automobile industry, and particularly after the recession in 2008 which disrupted industry sales.

Great expectations

Kelly Blue Book expects trucks and crossovers to post the highest number of sales. Truck sales are estimated to rise 8.1% in November, while sales of compact crossovers are expected to shoot as high as 23.6% compared to a year ago figure. A senior analyst of Kelley Blue Book said that November sales “tend to be heavily skewed toward the end of the month because of Black Friday sales events” and so chances are pretty high that sales would exceed current expectations.

All the major automakers gave very attractive deals to lure buyers at the beginning of the holiday season. Ford (F) had the prepaid credit card offer while General Motors (GM) gave various offers on its brands including Chevrolet, GMC, and Cadillac. Hyundai also offered 0% financing to attract buyers and increase sales. Automakers including General Motors, Ford, and Japanese rival Toyota (TM) are all set to witness strong sales in line with last year’s improvement. Incentives from all these automakers attract buyers which clear off the year end stock.

Perfect year end for the industry

As per J. D. Power & Associates, buyers spent an average of $1 billion a day in November, which is a record for the month. In the first half of the month, average transaction price of vehicles was $30,079, which is $461 higher than last November. Sales for the month are expected to be around $30 billion, an increase of 10% over last year comparable period and almost double the sales in November 2008, when the industry got crushed by the recession. Several analysts expect the industry to sell about 1.2 million during the month, which is 6% higher than November 2012. If that is the case, then this would be the best November since 2003, according to TrueCar.com. This also means that the seasonal adjusted annualized rate would be 15.8 million.

With another month to go, the US auto industry is set to hit sales of around 15.6 million cars and trucks, an increase of 8% over last year. In 2012 the industry saw sales of 14.5 million vehicles, which was again a good 13% jump from 2011 annual number. December has conventionally been one of the solid months of the year, given the holiday season frenzy and loads of offers and discounts provided by the carmakers. Also there are yearend sales incentives given on luxury brands which attract several car buyers. This would give the year a perfect ending to the auto industry.

Looking ahead

The first couple of months of the year are not very exciting for auto giants as traditionally sales fall after the holiday season incentives in December. January and February give no special offer to buyers. 2013 shall finish at a strong note and with great expectations, a senior analyst of TrueCar.com forecast 2014 sales to touch 16.5 million cars and trucks. In contrast, Toyota’s North American Chief Executive Jim Lentz says that 2014 growth would slow down compared to the current year. However, with improvement in the housing sector and consumer confidence, the auto industry is set remain in momentum.


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