November auto sales up on storm recovery, pent-up demand
By Bernie Woodall and Nichola Groom
LOS ANGELES (Reuters) - Auto sales are expected to rebound robustly in November, potentially hitting their strongest pace in more than four years, as consumers in the Northeast returned to dealerships after superstorm Sandy hurt demand in late October.
November sales were also boosted by pent-up demand for vehicles as consumers replaced their aging cars and trucks, analysts and executives said.
"People need a car and we've seen that pick up really quickly, especially in the last 10 days," Brian Carolin, senior vice president of sales and marketing at Nissan North America, said at the Los Angeles Auto Show on Wednesday.
"I was chatting with someone from one of the rental companies earlier," he said. "They had to ship more cars into the Northeast because of the demand. Obviously, people are in rental vehicles, they are waiting for their insurance claims to be processed and then they are going to come back into the market quite strongly."
Automakers are scheduled to report U.S. sales results for November on Monday and analysts expect an increase of 11 percent to 13 percent as the sector nears completion of its strongest year since 2007. Auto sales are an early indicator each month of U.S. consumer demand.
One concern for the industry is the "fiscal cliff" the United States faces - a combination of government spending cuts and tax increases due to be implemented under existing law in early 2013 that may cut the federal budget deficit, but also tip the economy back into recession. Auto executives expect Democrats and Republicans to reach a deal to avoid that issue.
"You may have to grab your wallet, but I think they will have a deal," said Jim Lentz, CEO of Toyota Motor Corp's USA sales division. "The thought of (no deal) is not a reality."
General Motors Co's head of North American operations, Mark Reuss, said the aging vehicles remain a powerful driver for sales and the specter of the fiscal cliff is not driving decision-making at the U.S. automaker. "There's still a lot of pent-up demand," he said. "I'm not making production decisions on it." Continued...