Million-Unit November Should Lift U.S. SAAR to Post-Clunker High

Analysis

Improving inventories, potential fleet sales and the beginning of the year’s final sales season should lift November’s seasonally adjusted annual selling rate above October levels.

A WardsAuto forecast calls for U.S. auto makers to sell 1 million light-vehicles over the 25 selling days in November, a 10.5% increase in daily sales over year-ago (24 days) and a 2.2% uptick from October (25 days).

At 1 million units or better, the industry would achieve a SAAR of 13.7 million or more, which would be the highest non-Clunker rate since June 2008. The industry seemed poised to hit that mark last month, but fell below expectations with a SAAR of 13.2 million units.

Related document: Ward’s U.S. Lt. Vehicle Sales and Inventory Forecast

However, the annual year-end selling season kicks off at the end of this month, and auto makers eager to boost relatively low 2011 sales totals could throw themselves into the incentive-giving season with more gusto than last year.

More available inventory for Toyota and Honda should boost car sales in general for both auto makers, while several popular vehicles, including Toyota’s top-selling Camry sedan, could see deliveries spike as a result of fuller dealer lots.

Both auto makers were in the process of making up production lost to the March tsunami and earthquake in Japan before an October flood struck Thailand, again wreaking havoc on their global output. The effects of the Thai flood on U.S. inventory largely will be felt in coming months.

WardsAuto calls for Toyota to grab 13.9% of the U.S. LV market in November, with daily sales up 3.4% over year-ago. The relatively modest gain would represent the auto maker’s first year-over-year growth since February and provide its largest market share since April, when inventories first plummeted.

Honda expected to see 9.8% market share, with daily sales up 5.3% over year-ago.

Honda should have sufficient inventories in November to boost its share to a 7-month high of 9.8%, with daily sales up 5.3% over like-2010.

Detroit auto makers are the month’s biggest wildcard. All three likely will sell a large number of trucks and cars to fleets before January and the distribution of those sales over the next two months could swing the November and December SAARs significantly.

Both General Motors and Ford could see retail sales of passenger cars dip as a result of Toyota and Honda’s renewed, if temporary, competitiveness.

WardsAuto is looking for GM to raise its DSR 2.2% over year-ago for a 17.9% take of U.S. LV sales, and Ford is forecast to account for 15.3% of LV deliveries.

Chrysler, which still was selling at recessionary-low rates a year-ago, could outperform its like-2010 DSR by as much as 48% in November, with forecast sales of 112,700 light vehicles sustaining the company’s October share of 11.2%.

Nissan should account for 8.8% of the market, ahead of Hyundai-Kia, which is forecast to grab 8.3% of LV sales.

Combined, European brands accounted for a record 10% of the market in October and likely will improve their take this month, as BMW and Mercedes ramp up competition for luxury-sales supremacy and Volkswagen and Audi continue to expand their U.S. presence.

At forecast levels, U.S. year-to-date deliveries would rise to 11.5 million cars and light trucks, a 10.5% improvement over like-2010.

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