U.S. auto sales are finishing March on an upbeat note, with analysts expecting the industry to extend its strongest streak in five years.
Three independent forecasters predict a seasonally adjusted annual sales rate of 15.3 million, nearly matching February’s 15.36 million SAAR and up 8 percent from a year earlier on a unit basis. Kelley Blue Book is at the low end of forecasts, at 15.2 million. More positive are Barclays at 15.5 million and Edmunds.com at 15.6 million.
A performance at those levels would mark the fifth straight month above the 15 million rate. The last streak of that length ended in early 2008, as the economy veered into recession.
Automakers release March results on Tuesday, April 2.
“We will have a strong March” Ludwig Willisch, CEO of BMW of North America, said at the New York auto show this week. “For the rest of the year, we are looking at constant growth.”
BMW sales cooled in the first two months of the year, rising 1 percent after a December surge. The German automaker’s results trailed the industry’s 8 percent gain.
Early Easter
Mercedes-Benz USA CEO Steve Cannon isn’t sure if ending the month with an earlier-than-usual Easter will affect retail sales, but said “it will be a record March” anyhow.
But Mike Hoornaert, general manager at Fox Automotive in Rochester Hills, Mich., said “it looks like it is going to be a strong close.”
Hoornaert said customers at his Chevrolet, Toyota and Volkswagen stores are no longer reacting much to politics. But they do respond to incentives. “It all depends on the incentives,” he said.
Robert Davis, senior vice president of Mazda’s U.S. operations group, said incentives remain at reasonable levels, but big players in highly competitive segments can raise the ante for everybody. He said American Honda spent big on outgoing Civic models in the fourth quarter and now has a smaller incentive on the new-generation Civic.
“Everybody had to react to that,” Davis said in New York. “They’re so dominant in that segment that when they make a move everybody else makes a move with it.”
General Motors expects to finish the first quarter with an increase in market share for retail and fleet, Alan Batey, interim marketing chief and head of U.S. sales, said at the New York show.
“The first quarter has been on the high end of our expectations,” he said. “We’re a little bit above where we thought we’d be.”
He added: “March looks really strong.”
Expectations also are rising for the full year on improving U.S. economic indicators.
The Dow Jones 30 Industrials and Standard & Poor’s 500 indexes set record highs this month. IHS Global Insight economist Nigel Gault expects gains next week in monthly reports on manufacturing, jobs and payroll wages.
This week, Barclays analyst Brian Johnson raised his total 2013 U.S. sales forecast a notch to 15.5 million – 1 million more than last year’s total and 5 million more than the 10.4 million sold during the industry collapse of 2009.
Ignoring politics
Jeff Schuster, the top forecaster for LMC Automotive, said car buyers are ignoring political deadlock.
“Consumers do not appear fazed by headwinds from Washington,” Schuster said. referring to the battles in Washington over the fiscal cliff and the sequester spending cuts. “Auto sales are outperforming earlier expectations.”
Mercedes’ Cannon said: “We are thrilled about the start of the year and confident with the economy, feeling like it is gaining traction.”
General Manager Rick Jones of Mike Shaw Toyota in Corpus Christi, Texas, said he’s “bullish” on April.
“With increased credit availability, Toyota incentives being strong and the redesigned RAV4, I think April will be like March,” he said. “It’s going to be a barn burner.”
Source :
http://www.autonews.com
