U.S. automobile sales may rise to 12.9 million vehicles in 2011, the second straight year of gains, showing investors that the market’s recovery is legitimate.
Total deliveries will rise 11% from 2010, according to the average of 17 analysts’ estimates compiled by Bloomberg. Sales rebounded to 11.6 million vehicles last year from a 27-year low in 2009, Autodata Corp. said yesterday.
The gain would provide additional revenue for an industry that returned to profitability in 2010, led by Ford Motor Co.’s $6.37 billion U.S. of earnings through three quarters. Still, the analysts’ forecast is for the third-lowest annual total since 1992. It would be 23% less than the average 16.8 million annual sales rate before the recession.
General Motors Co., Ford and Chrysler Group LLC reported U.S. sales gains that topped analysts’ estimates in December, pushing the industry’s annual rate to 12.6 million for the month, according to Woodcliff Lake, New Jersey-based Autodata. Deliveries ran at a 12.3-million-unit pace the two prior months.
Sales this year may be as much as 13.5 million when including medium- and heavy-duty trucks, executives at GM and Ford, the two largest U.S. automakers, said on conference calls yesterday. Ford raised the top end of its estimate from 13 million, and some experts said job gains are likely to accelerate in the months ahead.
The U.S. economic outlook is improving and consumer credit "exhibited continued signs of stabilization," Federal Reserve policymakers said in minutes of its Dec. 14 policy meeting, released yesterday. Unemployment above 9% and falling home prices will moderate the recovery in the world’s second-largest auto market, according to some industry analysts.
The sales estimates compiled by Bloomberg range from as high as 14 million predicted by Morgan Stanley, to 12.4 million seen by analysts.
Sales will rise to 14 million this year in a "V-shaped" recovery, Adam Jonas, a Morgan Stanley analyst, wrote in a Dec. 28 report that initiated coverage of GM with a recommendation that investors buy the shares.
The recovery will be driven by pent-up demand, wrote Jonas, who is based in New York. The average car on the road is more than 10 years old and sales have run below the auto scrappage rate for two years, he said.
Rebounding sales in its home market helped GM raise more than $20 billion in common and preferred shares in its initial public offering in November.
GM’s cost structure was reduced in its bankruptcy in 2009, allowing the company to earn $1.3 billion U.S. for every one million units of additional sales.
Ford overtook Toyota Motor Corp. for the number-two spot in U.S. sales last year, reclaiming the place it once held for 76 years. Toyota, hurt by more than eight million recalls related to unintended acceleration, last trailed Ford in 2006. Ford shares closed at $17.38 U.S. yesterday in New York trading, the highest since 2002.
