Dec 22, 2011

Auto industry closing 2011 with strong December sales

Updated 2h 37m ago
Brent Snavely/Detroit Free Press and Fred Meier/Drive On
Car shoppers are giving automakers a Christmas present -- brisk December sales that will finish 2011 on a high note, top forecasters said today.New-vehicle retail sales in December are projected to come in at 1,033,700 — the first time retail sales will top 1 million since the Cash for Clunkers federal rebates drove strong sales in August 2009, according to J.D. Power and Associates and LMC Automotive.

Retail sales in December are on track to increase 8% compared with the same month last year even though incentive spending is about 10% lower than last December, John Humphrey, Power's senior VP of global automotive operations said.

Total industry sales — including retail (the most profitable) and fleet — are expected to top an annualized pace of 13.4 million in December. That pace is nearly million higher than last December's pace of 12.5 million.

"For the third straight time, light-vehicle sales are posting strong selling rates at the close of the year," said Jeff Schuster, senior VP of forecasting at LMC said.

Meanwhile, shopping data site Edmunds.com also forecast today an annual selling rate in December of 13.4 million, based on its estimate of 1,230,099 vehicles by the end of the sales month (which actually runs through Jan. 3) -- the second best month of the 2011.

The accelerated rate in the closing months -- the whole fourth quarter has been strong -- should let the industry finish the year with 12.8 million vehicles sold, about 10% more than last year's 11.6 million.
The biggest December winners in sales, forecasts Edmunds: Chrysler, which it sees posting a 37% gain over last December, and General Motors, up 30.6%

But Jeremy Anwyl, Edmund's vice chairman put out a statement today indicating he see some weakness for the industry going into 2012. "December sales are still good in the context of 2011's overall sales, but new car transactions slowed down by the middle of this month," said Anwyl. "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."

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