U.S. 2003 November Auto Sales Up Sharply?

DETROIT, Nov 26, 2003; Michael Ellis writing for Reuters reported that Automakers may soon be giving thanks for November, as U.S. auto sales likely got a boost from a strengthening U.S. economy and a ramp-up in incentives, analysts said. Analysts' estimates vary widely, but several said that sales due out on Tuesday could climb to a seasonally adjusted annual rate of around 16.7 million, up from 15.6 million in October and 16.0 million in November last year.

"The pickup from the slowdown in October reflects an increase in incentives late in the month just in time for the long Thanksgiving weekend," Merrill Lynch analyst John Casesa said in a research report.

Automakers' incentives rose a slight 2.1 percent during the first two weeks of November to $3,929 per vehicle from $3,846 in October, according to industry analysts CNW Marketing Research, based in Bandon, Oregon.

General Motors Corp., Ford Motor Co. and the Chrysler arm of DaimlerChrysler AG all launched "lease pull-ahead" incentives later in the month, offering to waive the remaining lease payments on vehicles if the customers buy or lease a new car or truck.

Some analysts also suggested that sales will pick up where they left off in September when sales hit a rate of 16.7 million, capping a very strong third quarter for the industry.

The strong vehicle sales pace in November follows more signs of a strengthening U.S. economy.

The New York-based Conference Board said on Tuesday that its index of consumer confidence climbed to 91.7 in November, its highest level since September 2002. And the gross domestic product shot up in the third quarter by an 8.2 percent annual rate, the strongest quarterly advance in 19-1/2 years.

GM, FORD UP, CHRYSLER WEAKER

Among Detroit's Big Three automakers, only GM is expected to post sharply stronger sales for the month, partly due to an easy comparison with poor results in November last year.

"We're going to be up double digits," Paul Ballew, GM's director of industry analysis, told Reuters on Tuesday.

A strong November could help GM's slim chances of posting stronger U.S. market share figures for the third straight year. But GM would have to top last December's exceptionally strong sales results to achieve that feat.

Analysts expect Ford, boosted by the launch of its top-selling vehicle, the F-150 pickup truck, and its new minivans, to report slightly stronger sales.

After posting a 10.7 percent jump in sales in October, Chrysler is expected to return to its old ways and report more modest sales results for November, analysts said. Despite strong results for its Dodge Ram pickup truck, estimates for Chrysler sales range from a slight drop to a slight gain.