Auto sales in November were helped by a rebound from storm-ravaged October and the need to replace aging vehicles which put the industry on pace for a near five-year high and left executives optimistic about 2013.
Sales in November were on pace to top an annual rate of 15 million vehicles, which would mark the highest level since the 15.5 million rate of February 2008.
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"Vehicle sales are one of the encouraging spots of our economy," said Gary Bradshaw, portfolio manager with Hodges Capital Management in Dallas.
Ford Motor Co , Honda Motor Co <7267.T> and Nissan Motor Co <7201.T> posted better-than-expected sales, while Chrysler Group LLC, Toyota Motor Corp <7203.T> and Hyundai Motor Co <005380.KS> also reported strong increases that industry executives and investors said should continue through the end of the year.
However, sales for General Motors Co came in short of expectations. The No. 1 U.S. automaker said it benefited less than its rivals from the November recovery after Superstorm Sandy hit the U.S. Northeast as a smaller share of GM's sales come from that region. It also relied less on incentives.
Auto sales are an early indicator each month of U.S. consumer demand, and the improving housing market and rising consumer confidence have industry executives optimistic heading into 2013.
"Looking at the national picture, the apparent recovery in housing that we talked about last month and the encouraging new data on consumer sentiment and confidence are all positive factors," Kurt McNeil, GM's vice president of U.S. sales operations, said on a conference call.
He declined, however, to provide a 2013 industry sales forecast until a deal is reached to avoid the so-called fiscal cliff, a combination of federal spending cuts and steep tax increases that could tip the U.S. economy back into recession.
"Exactly how much growth we can expect next year will depend in part on how Congress and the president resolve the fiscal cliff issue," McNeil added. "Consumers hate the uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth."
For November, several analysts expect the industry's overall U.S. sales of new cars and trucks to rise 11 to 13 percent, with the annual selling rate for the month finishing in the range of 14.7 million to 15.3 million vehicles.
Ford expects sales in November to rise about 10 percent, while GM sees an annual sales rate of 15.3 million to 15.5 million.
Superstorm Sandy hurt the last few days of sales in October, which finished below expectations, but many consumers simply shifted their purchases to November. In addition, the average age of cars on the road has risen to just above 11 years, and industry officials say that will continue to drive demand.
McNeil said the auto industry is clearly heading this year toward the high end of GM's forecasted range of 14 million to 14.5 million. Many analysts expect the industry to finish 2012 with 14.4 million sales, which would mark the strongest year since the 16.1 million of 2007.
TrueCar.com analyst Jesse Toprak expects U.S. auto sales to rise to 15.4 million next year. "Stable growth is really the motto of the industry."
Jonathan Browning, CEO of Volkswagen Group of America, sees a continuation of a steady recovery for the economy as well as for U.S. December and early 2013 auto sales, but expressed concern about the negative impact on consumer confidence if the fiscal cliff occurs. VW brand sales rose more than 29 percent in November.
Ken Czubay, Ford's vice president of U.S. sales, agreed, saying of the talks in Washington to avoid the fiscal cliff: "The clock is kind of ticking."
Ford's November sales rose 6.5 percent to 177,673 vehicles, better than even some of the most optimistic forecasts for the No. 2 U.S. automaker. In a more positive sign for consumer demand, Ford's retail sales rose 12 percent.
The company had its strongest small-car sales for the month in 12 years. Demand for Ford's popular F-150 full-size pickup truck increased 17 percent, while GM's Chevrolet Silverado pickup saw sales drop 10 percent. GM blamed aggressive incentives by Chrysler, Nissan and Ford, and said it would focus on curtailing production of trucks rather than become trapped in a price war.
Ford's shares were unchanged at $11.45 and GM shares were down 0.9 percent at $25.65 on Monday afternoon on the New York Stock Exchange.
Ford said it planned to build 750,000 vehicles in North America in the first quarter, which would be an 11 percent increase from 2012.
GM's sales rose 3 percent to 186,505 cars and trucks, below the expectations of several analysts. The company said the average price paid per vehicle rose $750 from last year.
TrueCar estimated that the industry's average vehicle selling price in November rose 1.1 percent, or $335, from last year, and rose a similar amount from October to $30,832.
Chrysler, majority-owned by Fiat SpA , said sales rose 14 percent to 122,565 cars and trucks, its strongest result since 2007 before a recession pushed the U.S. automaker and GM into bankruptcy.
Toyota's sales rose more than 17 percent to 161,695 vehicles. Honda and Nissan both reported better-than-expected results, with the former jumping about 39 percent and the latter increasing 13 percent.
Hyundai said sales increased 8 percent to the company's all-time high for the month. November marked the first sales results since the South Korean automaker and its Kia Motors Corp <000270.KS> affiliate announced they had overstated the fuel economy ratings by at least a mile per gallon on more than 1 million recently sold vehicles.
(Reporting by Ben Klayman and Bernie Woodall in Detroit; editing by Jeffrey Benkoe, Maureen Bavdek and Matthew Lewis)