Sales of new cars, light trucks seen to improve

HOUSTON (ICIS)--New-car and light-truck sales in 2012 are expected to improve by about 5% as the industry continues to recover from the 2008 recession.

November was the best month for the car industry in 2011 in terms of vehicles sold, with an increase of 14% year on year, and moved the number of cars and light trucks sold to more than 11.5m for the year. This year-to-date figure is an improvement of 10% over the same period in 2010.

For 2011, US new auto sales amounted to 12,778,171, up from 11,588,783 units sold in 2010, for a 10.3% increase, year on year.

Based on that number of new auto sales, 2012 will have an estimated 13,417,079 cars and light trucks sold in 2012.

The American Chemistry Council (ACC) estimates that each automobile contains an average of $3,297 (€2,539) worth of chemicals, such as styrene butadiene rubber (SBR), acrylonitrile butadiene styrene (ABS), nylon, polycarbonate (PC) and other synthetic fibres, paints and coatings.

As the car industry continues to develop methods of achieving higher fuel efficiency as required by federal regulations, it is anticipated that along with more efficient vehicles, there will be lighter components. Often this means incorporating non-metal components into vehicles.

This could drive up the amount of chemicals used for the various components of an automobile, which will increase the ACC estimate.

Bad weather and natural disasters played havoc on automobile sales for some companies with facilities that were hit by the earthquake and tsunami in Japan in March, and floods that devastated Thailand later in 2011.

Honda was particularly hard hit as its ability to provide key parts for the manufacture of its vehicles were halted as supply houses were centred in Japan and Thailand. To some extent, Toyota was also a victim in its ability to supply necessary parts for the manufacture of its line of vehicles.

It is anticipated that both auto makers will see improved sales in 2012.

There are several other factors that indicate the auto sales numbers will increase.

The lending environment for automobiles is improving for consumers, and fewer people are paying their loans late, according to the latest data from TransUnion, one of the nation's leading consumer credit companies.

“Auto loan delinquencies have stabilised and are down to near record-low levels,” said Peter Turek, automotive vice president in TransUnion's financial services business unit. What's more, Turek told the Detroit Free Press that banks and auto loan companies will be competing even more fiercely for new business next year.

Trade show participation in 2012 is looking to increase. For example, sales for the 2012 American Truck Dealers (ATD) Convention and Expo in Las Vegas are up about 25% over the 2011 convention, which was held in Phoenix, Arizona.

The event coincides with the National Automobile Dealers Association Convention and Expo.

A key industry group is trying to launch a database of suppliers and their factories, part of an effort to help companies monitor sub–suppliers in the wake of floods in Thailand and an earthquake in Japan.

The Automotive Industry Action Group hopes to win the support of automakers and suppliers for the database, which would help its members track the location and availability of key components necessary for the manufacture of automobiles.

($1 = €0.77)