Goldman Sachs Forecasts Uneven Worldwide Sales Recovery

A new sales forecast by Goldman Sachs Japan points to an uneven future for global automotive markets in general and Japanese auto makers in particular.

The GSJ report foresees a return to normal production this autumn for all of Japan’s auto makers, citing their rapid rebound from the supply-chain problems that followed the March 11 earthquake. But it notes that demand-side concerns already are emerging, and recovery will vary both by auto maker and by market.

Civic to help Honda regain U.S. market share.

Sales momentum is expected to remain firm in China, Southeast Asia and Eastern Europe, but 2012 sales-growth forecasts have been lowered 3.5% for Western Europe and 2.6% for India.

The report says “a strong recovery in U.S. auto sales is seen as unlikely in a climate where the consumer-spending trend is below 2%.”

Key influences in the U.S. recovery include:

Goldman Sachs analysts believe annual light-vehicle sales in the critically important U.S. market will not return to 15 million units until 2014 or 2015.

Yet, they basically are upbeat about the U.S., noting extended lease terms offered by some Japanese auto makers should help the launch of new versions of core models such as the Toyota Camry and Honda Civic. They also expect buyer hesitation to recede once incentives normalize around September 2012.

“The business environment for auto-sales finance in the U.S. has not only remained healthy but continues to grow,” GSJ senior analyst Kota Yuzawa says. “The perfect-storm scenario of the financial crisis, when interest rates on car loans rose, used-car prices fell and bad-debt-loss ratios rose, seems unlikely to return. Our main scenario is not for a hard landing in U.S. auto sales.”

Nonetheless, GSJ is scaling back forecasts of seasonally adjusted annual rate sales for the next three years in the U.S., Western Europe and India.

The firm considers Nissan especially well-placed to grow, thanks to a balanced mix of developed and emerging markets and a 2012 lineup refresh ratio of 43%.

Honda, with a 2012 refresh ratio of 27%, including a new CR-V cross/utility vehicle and Accord sedan, is expected to recapture U.S. market share.

Toyota’s 2012 production target of a record 8.9 million vehicles, up 25% from prior-year, is considered “surprisingly bullish.”

“Toyota’s ambitious plan is based on requests from dealers coping with thin inventories, but we see downside risks to the plan rather than upside,” Yuzawa says. “The company will spend on incentives to recoup market share but could end up with too much inventory in early 2012, as production does not necessarily translate into sales.”

For operating profits in fiscal 2012, GSJ forecasts a 6.7% increase year-on-year to ¥500 billion ($6.6 billion) for Toyota; a decline of 3.2% to ¥520 billion ($6.9 billion) for Nissan; and a decline of 33% to ¥380 billion ($5 billion) for Honda.