Better Than You Thought: Dynamite December

2013 Chevy Spark

Let's end 2012 with a pleasant surprise. December should turn out to be a dynamite sales month for the auto industry. Cars are moving. Trucks are rumbling. New sets of keys are being pressed into the hands of proud owners at a rate we thought we would never see again just a year ago.

Next year should be just as good, if not a little better. What could go wrong? What if the industry can't keep up with demand?

We will get to that in a few paragraphs. First, the good news...

With annual year-end clearance events in full swing, new-car sales are expected to surpass 1.35 million units in December, pushing the industry's closely followed seasonally adjusted annual rate (SAAR) to 15.2 million units, according to Kelley Blue Book, www.kbb.com, the leading provider of new and used car information. 

After a strong November and December, the final sales tally for 2012 should approach 14.5 million units overall.  This tally would amount to a more than 13 percent year-over-year increase and the third consecutive year of double-digit auto sales gains.  While incremental sales growth will continue in 2013, Kelley Blue Book does not expect to see a fourth consecutive year of double-digit sales gains.

With employment and consumer confidence expected to improve only modestly next year, Kelley Blue Book expects sales growth will come at a slower pace from this point forward.  While modest economic growth will help keep sales stable in 2013, Kelley Blue Book expects to see as many as 250,000 to 300,000 additional sales from consumers who will arrive at the end of their lease term next year. 

Although most signs point to additional sales growth in 2013, Kelley Blue Book will keep a close eye on the 'Fiscal Cliff' discussion, as a tax increase for middle-income households could slow sales growth through next year and beyond.

So, what could go wrong besides the Fiscal Cliff? How about this? The industry is not ready. I am not talking about the OEMs. I am talking about the supply chain that GM, Ford, Chrysler, Toyota and the rest depend on.

More on that will be published in Restore the Roar, a series of e-books that will be out early in 2012. For now, take a look at the sample chapters that I have posted at www.rodkackley.com

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