US auto sales in November raced to a five-year high for that month on a rebound from storm-ravaged October and the need to replace aging vehicles, leaving industry executives optimistic about 2013.
Sales in November rose 15 percent to 1.14 million vehicles, the highest level for that month since 2007, before a recession caused a dramatic decline in demand and led to the bankruptcy filings of General Motors Co and Chrysler.
"Vehicle sales are one of the encouraging spots of our economy," said Gary Bradshaw, portfolio manager with Hodges Capital Management in Dallas.
Ford Motor Co, Honda Motor Co and Nissan Motor Co posted better-than-expected sales, while Chrysler Group LLC, Toyota Motor Corp and Hyundai Motor Co also reported strong increases that industry executives and investors said should continue through the end of the year.
However, sales for GM came in short of expectations. The No. 1 U.S. automaker said it benefited less than its rivals from the November recovery after Superstorm Sandy hit the U.S. Northeast as a smaller share of GM's sales come from that region. It also relied less on incentives.
Auto sales are an early indicator each month of U.S. consumer demand, and the improving housing market and rising consumer confidence have industry executives optimistic heading into 2013.
"Looking at the national picture, the apparent recovery in housing that we talked about last month and the encouraging new data on consumer sentiment and confidence are all positive factors," Kurt McNeil, GM's vice president of U.S. Sales operations, said on a conference call.
He declined, however, to provide a 2013 industry sales forecast until a deal is reached to avoid the so-called fiscal cliff, a combination of federal spending cuts and steep tax increases that could tip the U.S. economy back into recession.
"Exactly how much growth we can expect next year will depend in part on how Congress and the president resolve the fiscal cliff issue," McNeil added. "Consumers hate the uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth."
The 15 percent sales gain in November easily surpassed the gain of 11 to 13 percent most analysts had expected. The annual sales rate in November of 15.54 million was the industry's strongest for any month since the 15.55 million rate of February 2008.
Superstorm Sandy hurt the last few days of sales in October, which finished below expectations, but many consumers simply shifted their purchases