Edmunds.com Sticks with 11.5 Million Forecast; Ford Ups Its to 12 Million
April 14, 2010
Edmunds.com is sticking with its long-held 2010 sales forecast of 11.5 million vehicles as Ford Motor Co. ups its forecast to 12 million sales for 2010.
On Tuesday, Ford predicted 2010 sales would total 12 million units, up from the “roughly 11 million range” the automaker had estimated in February. Despite considering a boost, Edmunds.com is staying with 11.5 million for now.
Ford cites as reasons for its growing optimism higher March sales, which were boosted by incentives, including low interest and even zero-interest financing led by Toyota, combined with improved economic metrics.
Edmunds.com Senior Analyst Ray Zhou, PhD., says he doesn’t expect automakers to continue the high level of incentives seen in March nor does he expect the high level of fleet sales to continue through the year.
Indeed, Edmunds.com’s analysis of first-quarter sales for 2010 shows the industry is running nearly 16 percent ahead of the dismal 2009 first quarter. If that rate continued, the industry would come in closer to 12 million units for the year, than 11.5 million.
However, fleet sales, which were virtually non existent in the first quarter of 2009, soared in the first quarter of 2010 even beyond the automaker’s stated goals for full-year fleet sales, especially for Ford and General Motors. Chrysler also has been selling a high percentage of vehicles to fleets. Zhou expects fleet sales to slow their pace as the year wears on.
Zhou further predicts automakers to taper off their incentives. Automakers have been working hard in the past year to keep supply of vehicles in line with demand so they don’t have to use big incentives to move the metal. Their discipline has resulted in lower inventories that can’t sustain current levels of heavy incentives. “Zero-percent financing won’t last long,” said Zhou.
In addition, Zhou says, the economy can’t support higher sales. “I don’t think there will be a robust recovery in the second half of the year after all of the economic stimulus winds down,” said Zhou. – Michelle Krebs, Senior Analyst and Editor at Large
Posted by Michelle Krebs at 8:44 AM under Analysis , Companies , Ford , GM | Comments (0) | digg this | Seed Newsvine
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