The US auto industry limped to its best year since the boom times before 2008 as results came up short last month as a late Thanksgiving holiday robbed sales from the year’s final month.
The tough sledding last month does not suggest difficulty this year, however, as several executives and analysts expect auto industry growth to continue outpacing the overall US economy as it has since the recession.
In addition to the late US Thanksgiving holiday weekend, last month’s sales were hurt by snow and ice storms that kept consumers away from dealerships, automakers and analysts said.
“Sales were pulled into November, but also people were more impacted by the compressed shopping season, most of which was in December,” Kelley Blue Book senior analyst Karl Brauer said. “People were doing more Christmas shopping than car shopping.”
He added that industry-watchers should not be overly concerned by a December that was affected by the timing of a holiday in the previous month. Last month included Jan. 2 due to a quirk in the calendar that affected how automakers typically report monthly sales.
US industry sales last year finished at 15.6 million vehicles, up 7.6 percent from 2012, while last month’s results inched up 0.3 percent. The annualized sales rate in the final month was 15.4 million vehicles, well below the 16 million expected by economists surveyed by Thomson Reuters.
The timing of the Thanksgiving weekend had a greater impact on December sales than in recent years, causing automakers to miss expectations, General Motors Co chief economist Mustafa Mohatarem said.
The late December holiday season is generally one of the heaviest sales periods at US auto dealerships. GM, Ford Motor Co and Volkswagen AG all said the weather was less of a negative factor than the timing of the Thanksgiving holiday.
For all of last year, industry sales were 50 percent higher than 2009 when they slumped to 10.4 million vehicles during the height of the recession. It was the best full-year performance since 2007, when sales hit 16.1 million vehicles.
While some economists and analysts expect sales this year to rise to between 16 million and 16.5 million vehicles, there is growing concern that competition will intensify, leading to higher incentives and lower profit for companies.
Research firm TrueCar.com said vehicle transaction prices fell by an year-on-year average of US$200 per vehicle last month, or 0.6 percent, while incentives were up US$103 per vehicle, or 4 percent.
The gradually improving economy, including stronger job and housing markets, will drive future growth, as opposed to consumers’ need to replace aging vehicles, which the industry has described as pent-up demand, said Bill Fay, US head of the Toyota brand.