Auto sales showing life

In a bit of good news for truckers that serve the automotive market, December 2009 new-vehicle retail sales are expected to increase substantially compared with one year ago, indicating that the automotive industry is in recovery mode, according to recent research by J.D. Power and Associates

In a bit of good news for truckers that serve the automotive market, December 2009 new-vehicle retail sales are expected to increase substantially compared with one year ago, indicating that the automotive industry is in recovery mode, according to recent research by J.D. Power and Associates.

The firm, which gathers real-time transaction data from more than 8,900 dealers across the U.S., said
December new-vehicle retail sales are expected to come in at 839,600 units – representing a seasonally adjusted annualized rate (SAAR) of 9.1 million units.

Although fleet sales have been rebounding from historic lows earlier this year, December's fleet level is projected to be down 10% from one year ago. Overall, total sales for December are projected to come in at 1,029,600 units, up 7% from December 2008, said Gary Dilts, senior vp-global automotive operations at J.D. Power.

“The market is continuing to improve, with the relative strength of December sales supporting a year-end rally,” Dilts noted. “The December selling rate is tracking at 11.2 million units – up nearly 1 million units from one year ago – which sets up 2010 for further recovery.”

On the heels of the worst economic environment since the Great Depression, the automotive market has recovered from its low point in March 2009, and has been outperforming expectations since October. Given the more robust pace and a strong December close, 2009 is projected to come in higher than previously expected, with total sales at 10.4 million units and retail sales at 8.7 million units.

As a result, the firm is maintaining its 2010 forecast at 11.5 million units for total sales and 9.5 million units for retail sales, said Jeff Schuster, executive director of global forecasting for J.D. Power

“While the industry hasn't yet received a clean bill of health, fixed costs have been trimmed at all levels, allowing for profitability – even at a reduced selling rate,” he added. “The industry has an opportunity in 2010 to build on a series of small victories – such as improved pricing and appropriate inventory levels – to drive a stronger recovery.”

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