U.S. Auto Industry Stands Up - Analyst Blog

The U.S. auto industry showed signs of revival last month in the absence of any federal government incentive program such as “Cash for Clunkers." Auto sales soared 15% to 1.03 million in December after the market bottomed in November. Sales exceeded 1 million for the second time in the year, trailing only August – the month of Clunkers program.
 
Most of the prominent automakers, except General Motors and Chrysler, reported a sales gain during the month. Among the domestic automakers, Ford Motor (F) recorded the best sales gain. Meanwhile, Hyundai Motor Group ruled in terms of U.S. sales gain among all automakers.
 
Ford’s sales were up 33% to 184,655 cars and trucks in December, making it the company’s best month since May 2008. This was attributable to a surge in sales to corporate customers and a huge customer response received for vehicles including the redesigned Taurus, Fusion and Escape.
 
Sales of Ford, Lincoln and Mercury branded cars rose 42% to 61,195 vehicles. Meanwhile, Volvo, which is in the process of being sold, clocked a 13.8% rise in sales to 5,638 vehicles. F-Series pickup sales were up 29% to 117,822 vehicles.
 
General Motors (GM) reported a 6% decline in sales to 208,511 vehicles. The decrease was driven by a 55% plunge in sales based on the company's discontinued brands – Saturn, Hummer, Pontiac and Saab. However, the company's existing four core brands – Chevrolet, Buick, GMC and Cadillac – witnessed a 2% rise in sales.
 
Among the Japanese automakers, Toyota Motor (TM) reported the best sales gain of 32% to 187,860 vehicles, primarily driven by its highly sought after model, Prius (39% increase to 11,775 units).
 
Sales at Honda Motor (HMC) escalated 24.5% to 107,143 vehicles. Sales of Civics shot up 29% to 22,319 units while sales of Accord coupes and sedans rose 26% to 28,238 units.
 
Sales at Nissan Motor were up 18% to 73,404 units. Many Nissan models clocked double-digit sales growth during the month. They include Versa (32.5%), Maxima (59.5%), Z (63%), Xterra (15%), Pathfinder (49%) and Armada (76%).
 
Korean automaker Hyundai Motor Group, which includes both the Hyundai and Kia brands, posted a combined sales gain of 42% to 33,797 vehicles. Sales of Sonata sedans surged 59% to 10,485 units while sales of Santa Fe SUV shot up 47% to 9,264 units.
 
Daimler (DAI) recorded a marginal 0.2% rise in sales to 20,889 vehicles. Mercedes-Benz sales went up 8% to 20,025 units. However, smart fortwo micro-car sales plummeted 63% to 864 units.
 
Full Year Sales
 
The full year sales were not able to pick up despite impressive sales in December. Sales in 2009 dipped 21% to 10.4 million, which is a 27-year low. All the major automakers recorded a fall in sales during the year, except Hyundai Motor.
 
Sales at Ford dropped 15% to 1.62 million vehicles. Sales at GM plunged 30% to 2,084,492 vehicles. Chrysler's full-year sales plunged 36% to 931,402 vehicles. Sales fell 19% at both Honda and Nissan to 1,150,784 vehicles and 770,103 vehicles, respectively. Meanwhile, sales at Toyota decreased 20% to 1,770,149 vehicles.
 
The only major automaker that reported an increase in sales is Hyundai Motor Group. Its sales rose 9% to 735,127 vehicles.
 
Outlook
 
Overall, automakers are expecting 2010 sales to be less turbulent than 2009. They are anticipating some momentum in sales, driven by strong sales in December. However, sales are expected to improve modestly.
 
GM projected industry sales of 11 million–12 million vehicles in the U.S. for 2010, while Ford furnished a slightly more optimistic forecast of 11.5 million–12.5 million vehicles.
Read the full analyst report on "F"
Read the full analyst report on "TM"
Read the full analyst report on "HMC"
Read the full analyst report on "DAI"
Zacks Investment Research