Forecast Calls for Post-Shutdown Bounce

U.S. automakers should sell 1.21 million light vehicles in November, according to a new WardsAuto forecast.

The forecast looks for strong retail sales in the beginning of the month, accelerating in the final weeks of November, more than offsetting a downturn in fleet deliveries.

The forecast sales volume (over 26 days) would represent a 2% rise in daily sales over same-month year-ago (25 days) and equate to a 15.9 million-unit SAAR.

The anticipated boost in retail deliveries reflects an expected payback of sales lost in October due to a dip in consumer confidence relating to the federal-government shutdown.

The Conference Board’s consumer confidence index dipped nine points in October, while the Thomson Reuters/University of Michigan consumer expectations index fell to its lowest point since 2011 amid anxiety about the shutdown and attendant debt-ceiling crisis.

With the resolution of the shutdown, consumers likely are being influenced by better news as it pertains to the auto market.

North American automakers set an October production record, leaving dealers well-equipped for December’s holiday buying season. The robust inventories also are expected to increase end-of-month deals in November as companies begin to roll out year-end incentives.

The Bureau of Labor Statistics reported that unemployment remained relatively unchanged in October, at 7.3%. However, the figures included over 200,000 new jobs – a factor in WardsAuto’s relatively rosy retail outlook for November. Additionally, existing home sales rose 6% over prior year in October, while prices increased 12.8% – both factors are traditional indicators for the auto industry.

Indications from industry sources that fleet orders are well below seasonal expectations served as a restraint on the forecasted SAAR, which was otherwise targeted at above 16 million-units. WardsAuto expects, however, that fleet sales will see a bounce in December similar to the November retail spike.

The WardsAuto forecast calls for Detroit Three automakers to sell 531,000 LVs, for a daily sales rate equal to October’s DSR (27 selling days) and 6% above year-ago, giving General Motors, Ford and Chrysler a collective 44% of November sales, down from October’s 36% share. All three automakers are expected to suffer somewhat from the dearth of fleet orders.

Toyota is forecast to improve on its disappointing 14.1% take of October sales with a 14.6% market share on 176,000 deliveries, raising its DSR 4.6% over year-ago, and 8.1% over prior-month.

Honda’s daily sales are expected to fall 1.7% from year-ago, but jump 8.1% over October’s DSR on volume sales near 120,000 units.

The WardsAuto November forecast would bring year-to-date LV deliveries to 14.15 million units, up 8.1% from like-2012. WardsAuto currently is forecasting full-year 2013 LV sales of 15.6 million, pointing to December sales in the neighborhood of 1.5 million units.

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