December 21, 2024

Hurricane Helps to Lift Auto Sales to 4-Year High

The strong performance of most car companies indicated that total sales for this year would exceed most forecasts and suggested that the industry’s revival would continue into 2013.

Preliminary figures showed that 1.14 million vehicles were sold in November, in contrast to 994,000 in the same month a year ago, according to the research firm Autodata.

That pace translates into a seasonally adjusted annual sales rate of about 15.5 million vehicles — the highest rate recorded since January 2008.

“November was a very good month, but December has the potential to be even better,” said Jesse Toprak, chief analyst for the auto information Web site TrueCar.com.

Analysts said from 20,000 to 30,000 sales during the month were tied to consumers replacing vehicles that were flooded or destroyed in the hurricane that decimated portions of the East Coast in late October.

Estimates of damaged vehicles have run as high as 200,000, but Mr. Toprak said only about one-fourth of those cars would be replaced with new ones.

“The replacement value will in most cases only be enough to replace a used car with another used car,” he said.

The main reasons for the healthy sales in November were the same ones that had driven the overall industry this year — the need to replace aging cars on the road and the steady supply of fresh, new models with superior fuel economy.

General Motors, the nation’s largest automaker, had one of the weaker performances among the major car companies. G.M. said its November sales increased just 3.4 percent, mostly because of a drop in truck sales.

G.M. plans to replace its current pickup trucks next year with new versions, but is losing ground to competitors in the segment in the interim.

The company also did not benefit much from hurricane-related sales because its market share is lower than Japanese rivals in some of the affected areas.

Ford Motor Company reported that its sales during the month were up 6.4 percent, primarily because of the popularity of its small Focus sedan and C-Max hybrid models.

Ford, in fact, trailed G.M. by fewer than 10,000 sales during November, with General Motors selling 186,000 vehicles in contrast to Ford’s 177,000.

Chrysler, the smallest of Detroit’s three carmakers, continued its stellar results this year with a 14.4 percent increase in the month. Over all, Chrysler sold 122,000 vehicles, including 3,600 cars made by its Italian parent company, Fiat.

The two largest Japanese automakers, Toyota and Honda, posted sizable increases that were partly attributed to the replacement of storm-battered vehicles.

Toyota said its November sales jumped 17.2 percent, to 161,000 vehicles, and Honda reported a 38.9 percent increase, to 116,000. Honda’s large market share in New York, New Jersey and Connecticut was cited by analysts as a key factor in its overall results.

“Honda is the most popular brand in the tristate area,” said Jessica Caldwell, an analyst with the car research site Edmunds.com. “So when life returned to normal, those car buyers quickly made up for lost time.”

Nissan, the third major Japanese car company, said its sales increased 12.9 percent during the month, to 96,000 vehicles.

The German automakers Volkswagen and BMW did well in November, partly on the strength of revamped versions of top sellers such as the VW Passat and the BMW 3-series.

Industry executives said positive economic conditions should propel sales even higher next year. In particular, an increase in housing starts has encouraged some businesses to begin buying new pickup trucks and utility vehicles.

The executives, however, said there was some concern about the outcome of discussions in Washington to avert the package of tax increases and spending cuts scheduled to go into effect at the end of the year.

“Until we can see some resolution, we are going to be conservative and not issue a sales forecast for 2013,” said Kurt McNeil, G.M.’s head of United States sales operations.

Article source: http://www.nytimes.com/2012/12/04/business/automakers-report-strong-november-sales.html?partner=rss&emc=rss

Euro, Europe Stocks Fall on Lack of Fed Action

Euro/dollar slumped to its lowest level since January at $1.3005 as investors also speculated that more euro zone nations may be hit with debt downgrades in the near term given that a quick solution to the region’s crisis remains elusive.

“If we get a further deterioration of the euro zone debt crisis, if we see a lot of countries being downgraded, or more problems in the banking sector, this $1.30 is not going to hold,” said Arne Lohmann Rasmussen, chief analyst at Danske in Copenhagen.

The dollar index, which tracks the dollar’s value against a basket of currencies, rose as high as 80.407.

Markets have been sliding since the start of the week as investors increasingly take the view that measures agreed at last week’s EU leaders summit did not go far enough to resolve the two-year-old debt crisis.

European shares fell, tracking Wall Street lower with the key FTSEurofirst 300 index down about 0.7 percent. The heavyweight banking sector, strongly exposed to the euro zone crisis, lagged. The STOXX Europe 600 Banking Index fell 0.9 percent.

“There was a bit of expectation in the market yesterday about the Fed (announcing stimulus),” said Jeremy Batstone-Carr, strategist at Charles Stanley.

Global stocks as measured by the MSCI world equity index extended their losing streak into a third straight day with the index now down over 3.6 percent in the past month.

DEBT SALES EYED

Debt markets were on edge ahead of a planned sale in Rome of up to 3 billion euros of new 5-year bonds – Italy’s first sale of longer-term debt since the European Union took steps towards greater fiscal integration last week.

The benchmark five-year bond yield was volatile, rising above 7.00 percent before easing to 6.76 percent, and poor demand at the sale may send 10-year Italian bond yields towards lifetime highs having already climbed above the 7.0 percent level considered unsustainable.

Germany will offer 5 billion euros of new 2-year bonds, and may struggle to attract demand after yields marked new euro-era lows this week after the ECB cut interest rates last week.

Although a five-year Bund auction last week saw strong demand, three out of four of the country’s previous auctions drew less bids than the amount on offer.

(Additional reporting by Naomi Tajitsu and Brian Gorman; Editing by John Stonestreet)

Article source: http://www.nytimes.com/reuters/2011/12/14/business/business-us-markets-global.html?partner=rss&emc=rss