Analyst: Auto Sales Could Top 10 Million
DETROIT (AP) — U.S. auto sales could top an annual rate of 10.8 million in November, General Motors Co.'s top sales analyst said Thursday. That would mark the first month this year that sales jumped to such levels without the aid of Cash for Clunkers rebates, which boosted sales in July and August. Executive Director of Market Analysis Mike DiGiovanni says the industry is having a solid sales month through the first 19 days of November, another sign that the economy is beginning a slow recovery from recession. He also said GM could see its fourth straight month of market share gains in November.
Others are a bit less bullish. The Edmunds.com automotive Web site forecasts an annual light vehicle sales rate of 10.3 million and J.D. Power and Associates predicts 10.2 million.
The annual rate for November, typically a slow sales month, is adjusted for seasonal variances. Edmunds predicts light vehicle sales will drop 4.5 percent this month when compared with year-ago results. J.D. Power estimates a 7.6 percent decline.
DiGiovanni admitted there will be setbacks as the economy sputters back to health, pointing to a dip in new home construction from September to October. But job losses are slowing and manufacturing output is improving, he noted.
On a conference call with reporters Thursday, Susan Docherty, GM's new sales chief, said GM aims to increase its leasing from the current 2 percent to between 7 and 10 percent. Leasing nearly dried up last year when credit tightened and financing was not available, and GM essentially got out of the leasing business when its finance arm, GMAC Financial Services, ran into money troubles.
Other automakers, especially luxury brands, have increased leasing and boosted sales. Leasing currently accounts for about 13.2 percent of U.S. industry sales, and Docherty wants to boost GM's leasing by targeting Cadillac and other vehicles.
But she does not think the company is at a disadvantage to competitors because of its low levels of leasing.
Docherty said while GM may lose lease deals to other automakers, it should make up for them by offering no-interest financing and cash incentives to those who buy cars and trucks. Eighty-five to 90 percent of customers buy rather than lease, she said.
DiGiovanni also noted that sweet lease deals hurt a brand's resale values.
"Sometimes going ahead and matching your competition is not the best strategy," he said.