Northville, Mich., Jan. 8, 2010 -Car and truck sales in North America will rebound in 2010 after a tumultuous and historic decline in 2009. But it will be the second half of the year before the sales pace reaches a reasonably robust level, forecasting firm CSM Worldwide announced today.
“Apprehensive consumers have postponed auto purchases for nearly two years, so an enormous pool of pent-up demand has accumulated,” said Joe Barker, senior manager, North American vehicle forecasts at CSM. “However, we think it will take at least another six months before demand of larger magnitude is unleashed.
“The rate of deterioration in the labor and housing markets is slowing, and real signs of an economic recovery are emerging,” he added. “By the second half of the year, consumer confidence should strengthen enough to drive the new vehicle sales pace significantly higher.”
CSM is projecting auto sales in 2010 to improve 13.5 percent to 11.8 million units in the United States and 12.5 percent, or 14.2 million units, for all of North America. Full-year sales in 2009 have come in at a 39 -year low, with 10.4 million units sold in the United States and 12.6 million in North America.
CSM forecasts the seasonally-adjusted annual selling rate (SAAR) to track in the range of 11 - 12 million units through the first half of this year. A robust rebound, with the annualized sales rate climbing to 12 - 13 million units, is expected in the second half of the year.
| 2009 | 2010 | |
| Light Vehicle Sales (millions) | ||
| United States | 10.4 | 11.8 |
| Canada | 1.5 | 1.6 |
| Mexico | 0.7 | 0.8 |
| North America | 12.6 | 14.2 |
| YOY % Change | ||
| United States | -21% | 13.5% |
| Canada | -11.2% | 6.1% |
| Mexico | -31.7% | 10.1% |
| North America | -20.7% | 12.5% |
“The sales ‘snap back’ will trail past recoveries because the economic hole we’re climbing out of is so deep and credit availability is still a concern,” said Mike Jackson, director, North American vehicle forecasts at CSM. “By contrast, the recovery in vehicle production levels will be much stronger since inventories have been drawn down so far— there were 1.2 million fewer vehicles on dealer lots at the end of December than there were a year ago and we’re entering a much stronger sales environment.”
For the full year 2009, light vehicle production in North America of 8.5 million units reflects a punishing decline of 4.1 million units or 32.4 percent from 2008 levels. However, output in the fourth quarter of 2009 likely will reach 2.7 million units, a 59 percent increase over the first quarter. In 2010, CSM forecasts that production will climb 26 percent to 10.8 million units – more than 2.2 million units above 2009.
Nearly all manufacturers are poised to see gains:
• GM will drive full-size truck volume and build on the success of its newest vehicles, the Chevy Equinox, Cadillac SRX and Buick LaCrosse. The stylish Chevrolet Cruze arrives in August.
• Ford’s upside will be driven by its strength in core segments as well as by new model launches, including fresh versions of the Ford Edge and Lincoln MKX; a full-year of new Taurus output; an updated Super Duty pickup; and the launch of the Fiesta in North America.
• Hyundai-Kia will see sharply higher 2010 production, thanks to the launch of the striking new Hyundai Sonata and a full year’s worth of Kia Sorento production at the company’s new plant in West Point, Ga.
• Lean inventories give Chrysler the opportunity to bolster output of the Dodge Caliber, Dodge Journey and its minivans; Jeep will launch its redesigned Grand Cherokee.
• Toyota will wind down the NUMMI plant in California, add a new Sienna and see overall capacity utilization climb, notably at its Woodstock, Ont. facility. Honda launches its new Odyssey and its relatively new Greensburg, Ind. plant is also set to make gains.
GM’s first quarter production guidance remains aggressive as it drives volume across its product range, with special emphasis on high-margin full-size pickups and SUVs
“GM is playing to its strengths in an effort to improve the company’s financial performance before an IPO in late 2010 or early 2011, yet full-size pickup and SUV segments will represent a considerably smaller share of the market going forward,” Jackson said. “We don’t believe their build rates are sustainable.”
Looking at the market as a whole, Jackson said there is a risk automakers could move too quickly to bolster their inventories.
“Automakers should plan cautiously,” he said. “They need to avoid letting production outpace the recovery in demand, which is back-loaded.Overreaching by increasing out put too early can be costly and disruptive.”
