Car Sales Expected To See Slight January Cooling

Dearborn (WWJ) January car and truck sales numbers, which will be released Tuesday afternoon, are expecting to show a market that's cooled off from December, but remains on a slow rise out of the recession.

By comparison auto industry sold 11.8 million vehicles in the U.S. last year, up fro 10.6 million, when things bottomed out in 2009.  So, the Ford analyst is projecting that while the long term trend toward better sales will continue, January will see lower sales and a lower sales rate than we saw in December.

Interview: Ford's George Pipas talks about January Sales Expectations.

"It's probably too much to expect that the sales rate's just going to continue going up month, after month after month, without interruption," Pipas said.  "Things just don't happen that way. "

Total sales typically decline in January, Pipas says, and this year will be no different.   Pipas says sales to fleet remain somewhat weak, meaning most of the strength is at the consumer level, with retail sales expected to lead the way.

'Consumer confidence is still low by historic standards," said Pipas.  "But, we are in a better place than we were in 2010 and 2009."

Pipas says the strong fleet sales that boosted January 2010 sales have ebbed a bit, but they've been more than replaced by stronger sales on the retail side.  The analsyts at Edmunds.com are seeing the same trend.

"January's sales figures continue a trend of steady, sustainable growth for the auto industry," said Edmunds.com Senior Analyst Jessica Caldwell, in a statement released by the organiztion. "What's even more encouraging is that this month's figures were less dependent on fleet sales than last year. That means 2011 is already seeing a more robust retail market supported by individual consumers."

 The people at J.D. Power and associates say they saw traffic slow at dealerships as the month went on.

"The strength in retail sales from the beginning of the month has reversed during the past two weeks, slowing the momentum," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, in statement issued late Monday afternoon. "There are a multitude of factors that could be driving the weakness: winter storms, delayed payback from the strong December close, and a pullback in marketing and incentives, as incentive levels are 12 percent lower compared with December."

Schuster said the sales rate for January could run lower than 12 million, slightly below Ford's projections.

All three of the domestic auto companies are expected to release January sales that are better than last year.  Chrysler has a number of new products, and General Motors has been continuing with some relatively strong incentives.

Ford recently revised its sales guidance for 2011, expecting the industry to sell between 13 and 13.5 million vehicles.