U.S. light-vehicle sales probably rose in December to wrap up a three-year run unrivaled in almost four decades as consumers replaced cars and trucks that are, on average, the oldest ever on the nation's roads.
Car and light truck sales in the U.S. probably rose 9.8 percent in December, according to a Bloomberg survey of analysts. That would cap a third-straight annual gain of at least 10 percent, the first such industry streak since 1973.
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"It sure feels a lot better to be selling cars today than a few years ago," Geoffrey Pohanka, president of the Pohanka Automotive Group, said in a telephone interview. "The age of the fleet and the attractiveness of a lot of cars that are being designed now are going to help sustain sales going forward."
That confidence in continued demand has his Washington, D.C.-area dealer group expanding only a few years after retrenchment. Pohanka closed three Saturn stores and a Chrysler- Dodge outlet as part of the 2009 restructurings of the predecessors to General Motors Co. and Chrysler Group LLC. In 2013, he plans to build a second Honda store in as many years and also will add a new Volkswagen dealership.
U.S. light-vehicle sales in December likely climbed to almost 1.37 million, the average of estimates by 10 analysts surveyed by Bloomberg. That would push deliveries for the full year to 14.5 million, the best annual total since 2007.
Lingering replacement demand from owners of damaged vehicles and purchases deferred by superstorm Sandy on the East Coast may have boosted vehicle sales by about 50,000 in December, Credit Suisse Group AG estimated in a Dec. 27 report. The annualized industry sales rate, adjusted for seasonal trends, may have been 15.4 million for December, the average of 15 analysts' estimates.
The projected pace for December almost matches November's 15.5 million sales rate, the best month for industrywide deliveries since January 2008. Automakers report December sales figures tomorrow.
Honda Motor Co.'s sales increase in December may lead all automakers with a gain of 32 percent, the average of eight analysts' estimates. The Tokyo-based automaker introduced a revamped Civic compact and redesigned Accord sedan -- its two top-selling models -- late last year.
"They're getting back to what Honda's best at, which is value for the money," said Pohanka, whose dealership group already includes three Honda stores in Maryland and Virginia. "The new Accord has just taken off. The Civic is going to continue to do well."
The sales rate was 13.6 million the previous December, according to researcher Autodata Corp. The U.S. averaged 16.8 million light-vehicle deliveries annually from 2000 to 2007, then dropped to 10.4 million in 2009, a 27-year-low, according to Autodata.
Americans have held onto their cars longer, pushing the average age of vehicles on U.S. roads to about 11 years, according to researchers Experian Automotive and R.L. Polk & Co.
"Autos are in the third or fourth inning of this recovery with a lot of room yet to go," said David Kudla, who manages about $1 billion as chief executive officer of Mainstay Capital Management in Grand Blanc, Michigan, and recommends shares of GM and Ford Motor Co.
GM, the top-selling automaker in the U.S., probably increased deliveries in December by 2.1 percent, the average of 11 estimates. The Detroit-based automaker boosted incentives on Chevrolet Silverado and GMC Sierra pickups during the month to try to clear excess inventory ahead of introducing new versions of the trucks this year.
"The last thing they need is to have significant volumes of the old pickup in showrooms in April," Alan Baum, principal of auto-industry researcher Baum & Associates in West Bloomfield, Michigan, said in a telephone interview. "If they keep the incentives up, Wall Street will hammer them. The preferable course is to cut production."
Ford, No. 2 in U.S. auto sales, likely will report a 1.2 percent increase in December deliveries, the average of 11 estimates. The automaker, based in Dearborn, Michigan, is spending more than $773 million to boost production across six plants in its home state, according to a Dec. 27 statement.
Toyota Motor Corp., poised to take back the title of world's biggest automaker, probably sold 10 percent more vehicles in December, the average of eight estimates. The Toyota City, Japan-based automaker on Dec. 26 forecast a 2 percent increase in global sales this year to a record 9.91 million vehicles.
Chrysler, majority owned by Fiat SpA, likely boosted deliveries in December by 7.6 percent, the average of 11 estimates. Fiat, based in Turin, Italy, said Dec. 20 that it will invest more than 1 billion euros ($1.32 billion) to build two compact sport-utility vehicles at an Italian factory that will export to markets including the U.S.
Analysts estimate that Nissan Motor Co. sales will climb 2.7 percent, the average of eight estimates. South Korea's Hyundai Motor Co. and Kia Motors Corp. may combine to sell 13 percent more vehicles in December compared with a year earlier, the average of six estimates.
Volkswagen AG, which exceeded its full-year target for U.S. sales of 500,000 vehicles in November, likely boosted sales in December by 31 percent, the average of four estimates.