Nervous U.S. consumers are expected to make November
another sluggish month for auto sales despite holiday discounts and
a handful of runaway hits such as the new Chevrolet Malibu.
Consumer confidence has fallen for four consecutive months and
the November reading, recently reported by the Conference Board, was
at its lowest level since 2005, when gas prices soared after
That could spell trouble for the auto industry, since consumer
confidence is one of the best predictors of demand for cars, says
Bear Stearns analyst Peter Nesvold. High gas prices and the slump in
the housing market are among consumers' chief worries.
``We anticipate a continued slowing in auto sales as one symptom
of a hand-wringing consumer,'' Nesvold said in a recent note to
Automakers are scheduled to report their November sales results
on Monday. Nesvold and other analysts predict sales will be flat or
down slightly compared to last November.
The month typically is a tough one for automakers despite
year-end clearance discounts, which rolled out throughout November
at most automakers. Goldman Sachs auto analyst Robert Barry said in
a note to investors that November would have been worse without the
GM had a bright spot with the Malibu sedan, which hit dealerships
at the beginning of the month. The automaker won't give exact sales
numbers until Monday, but spokesman Terry Rhadigan says there is
only a seven-day supply of Malibus nationwide. GM, which has been
making the Malibu in Fairfax, Kan., said Wednesday it will start
producing the sedan at a second plant near Detroit to keep up with
Jesse Toprak, chief economist for the auto information site
Edmunds.com, says GM should have had more Malibus on dealer lots to
take advantage of the strong buzz. Dealers typically want a 30-day
supply of a new vehicle for at least six months, he said.
``There may be a missed opportunity here. You want to have the
inventory right when buzz is at the peak,'' he said.
Still, GM dealers are thrilled by the reaction to the Malibu,
which takes aim at the perennially popular Honda Accord and Toyota
Camry sedans. Duane Paddock, the owner of Paddock Chevrolet in
Kenmore, N.Y., says he has sold 27 of the 30 Malibus on his lot, and
12 more than are being shipped. Paddock says buyers are drawn by the
``It's just been overwhelming, the response that we've gotten,''
Paddock said. ``This car stands up on its own.''
Toprak predicts GM's sales will be flat compared to last
November, with the Malibu making up for some slower sellers like the
Chevrolet Impala. He also predicts flat sales for Ford Motor Co.,
which would be a relief for the automaker after a string of tough
months and double-digit losses as it slashed low-profit sales to
Toyota Motor Corp. also should see little or no increase in
November, a stark contrast to the double-digit monthly sales
increases it was enjoying until recently. Toprak says Toyota's gains
weren't sustainable in the long term, and the company was expected
to grow at a slower pace this year.
Several analysts predict Chrysler LLC will see the biggest
year-over-year sales declines in November as it struggles to revamp
its vehicle lineup and rely less heavily on sales to rental fleets,
which have been propping up its numbers in recent years. Chrysler
announced at the beginning of November that it will cut four
products in 2008, including the slow-selling Dodge Magnum wagon and
the Chrysler Pacifica crossover, as part of a restructuring that
also will eliminate up to 12,000 jobs.
Lehman Brothers auto analyst Brian Johnson, who forecast a 17 per
cent decline for Chrysler in November, said in a note to investors
that weak truck sales also are hurting the automaker. Johnson says
Chrysler's heavy incentive spending is having less effect as
competition in the truck segment heats up.
Honda and Nissan Motor Co. could be the big winners in November.
Both have newly redesigned sedans _ the Honda Accord and Nissan
Altima _ that have been boosting sales this fall. Toprak predicts
Honda's sales will be up eight per cent while Nissan's will be up 10
per cent over weak sales last November.
On the Net:
Chrysler LLC: http://www.chrysler.com
Ford Motor Co.: http://www.ford.com
General Motors Corp.: http://www.gm.com
Honda Motor Co.: http://www.honda.com
Toyota Motor Corp.: http://www.toyota.com