Despite A Slow May, Auto Sales Expected To Reach Highest Level Since 2008
Given what many see as slow economic recovering, unstable fuel prices and supply problems from Japan, it probably isn’t surprising that May’s auto sales were rather soft.
That said, figures, expected to be released tomorrow will likely reveal a 12.1 million seasonally adjusted annual rate, based on an average from 11 analysts surveyed by Bloomberg. This follows on the heels from 12.6 million total vehicle sales in January, based on research from Autodata Corp.
However, predictions are that as the economy potentially goes stronger, and Japanese suppliers get back on track, total vehicle demand for this year is expected to be the highest since 2008, when some, 13.2 million cars and light trucks were sold.
Although Japanese automakers are working through their supply issues, price increases and reduced sales incentives by some automakers, notably Ford still have the potential to eat into sales and profit margins.
Nevertheless, the overall outlook remains optimistic. Among the automakers; Toyota says it expects production to return to around 70 percent of normal levels by June, while Honda says it will resume full capacity by August. Meanwhile, Chrysler, having managed to pay off some $7.6 billion in government loans during the month of May, says sales increased around 9.5 percent during the same period.
The biggest worry among many is GM, which is struggling to move it’s now aging full-size pickups and SUVs; nevertheless, in trading, GM shares were up slightly on the New York Stock Exchange this morning, settling at $31.28 per share.
[Source: Bloomberg]
More by Huw Evans
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