Strong December, Slow 2011 for the US Auto Industry

The American automotive sector is surely enjoying the month of December, especially because sales are going greater than in any other month in the past two years and consumers have an increased appetite for vehicles. But although the last month of this year is expected to bring impressive sales in terms of new cars, sales won't skyrocket in 2011, with analysts predicting only slight recoveries in the next 12 months.

New car sales in the United States are expected to reach 12.4 million in 2011, according to data published by AutoPacific and cited by TheCarConnection, while J.D. Power forecasts about 12.8 million cars sold in the country next year. As for this year, the two are predicting sales of 11.4 and 11.6 million units, respectively, which means that 2011 won't bring major changes when it comes to the local auto sector.

“Even with the possibility that sales in the third week of December may be affected by the recent winter storms, the strength in sales during the second week is expected to continue through the rest of the month,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “As a result, it appears that 2010 will end on a high note.”

J.D. Power claims that total vehicle sales in the United States this month could reach 1,133,000 units, which represents a 14 percent increase over December 2009 and above November 2010 when the local companies totaled sales of 871,299 units.

“The continuation of the strong performance in the retail market through December may be the confirmation that the industry has been looking for that the recovery has been re-engaged,” said Schuster. “The likelihood of an extension of the tax cuts, in addition to a strong close in 2010, bodes well for the automotive market in 2011.”