U.S car sales likely to die out before 13 million mark

Saturday 10 September 2011, 18:16 PM by

U.S. car sales in the year 2011 is unlikely to touch the 13 million unit mark that was surprisingly the minimum estimate made by Ford’s CFO, Lewis Booth. Ford had forecast industry wide 2011 sales to fall within the range of 13 million to 13.5 million vehicles, which included medium and heavy duty trucks, in the local market.

According to the overall view of the estimates of 18 analysts surveyed by Bloomberg in August, deliveries of cars and light trucks were likely to reach a figure of 12.7 million. In April, the analysts' average estimate for 2011 sales was 13 million light vehicles.

The major concerns that have put the economy and financial markets in great jeopardy are the delays in purchases caused due to high recession and recovery time period. U.S. light vehicle sales swelled up to 11 percent in 2010 to touch a figure of 11.6 million from the previous year's 10.4 million.

U.S car sales likely to die out before 13 million mark | CarTrade.com
U.S car sales likely to die out before 13 million mark

Ford forecasted a positive trend in sales that would gear up the U.S. economy apart from boosting the car market. Booth said, during a UBS conference in London, "We see signs of pent-up demand. What it's going to take for that pent-up demand to emerge is some confidence in what the future will look like. If the industry takes a turn down, we will react to it. We no longer sit around and wait for the problem to go away. If we see a significant downturn, we'll cut back on structural costs, but we didn't expect it to be quite as slow as it's been."

Ford earned around $9.28 billion, if the past two years are taken into consideration. It recuperated quite fast after $30.1 billion loss between 2006 and 2008. In late 2006, the company was forced to borrow $23.4 billion, putting up all major assets, including its blue oval logo, at stake.

With signs of improvement, even if the car sales in this year does not achieve the 13 million mark, the U.S. car market has a lot to look forward to. Therefore, the mismatch of estimates is not a big threat to the market if things are looked upon in a broader way.

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