Analysts Revved Up for Automotive Industry in 2012

Eleven independent analysts forecast an average sales figure of 13.6 million light vehicles in 2012. The prediction would be an increase of 6-7% over this year depending on how 2011 wraps up. The spike in auto sales is attributed to rising employment, increasing credit availability, new products and aging vehicles currently driven by Americans. If, and that’s a big IF, consumers meet these expectations, that will be great news for shareholders of General Motors (NYSE:GM), Ford (NYSE:F), Toyota Motors (NYSE:TM), and Honda Motor Company (NYSE:HMC).

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Though the most conservative estimate of 13 million by Wells Fargo (NYSE:WFC) is a full million less than the loftiest of 14 million by Morgan Stanley (NYSE:MS), the spread is still narrower than the 1.5 million difference in 2011 predictions. Analysts predict just as much economic bad news in 2012, but believe consumers are less skittish than they were three years ago when the recession began.

Automotive News quoted Alec Gutierrez, Senior Market Analyst for Kelley Blue Book, who said, “The Dow fell 1,500 points — and car sales stayed smooth and consistent. The American consumer has seen so much gone wrong. If they have to buy a car, they will.”

While a European recession is possible in 2012, it could possibly be outweighed by an American economic surge. Jeff Schuster, a forecaster for the Americas for LMC Automotive, says that the more telling factors will be pent-up demand, a growing inventory, and credit availability.  The average age of vehicles on the road is currently 10.7 years, up from 8 or 9 over the past decade according to Tom Kontos, Executive Vice President of Customer Strategies and Analytics for auction house ADESA. “Americans have gone without for a very long time.  ‘I need a car’ is the biggest reason for optimism,” Kontos said per Automotive News.

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To contact the reporter on this story: Ashley Cloninger at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com