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Superstorm Adds Tailwind as November Sales Surge

No fiscal cliff for automakers.

by on Dec.03, 2012

VW -- which is getting ready to launch the new Beetle Convertible -- had its best November since 1973.

While Superstorm Sandy might have taken the wind out of the auto industry’s momentum in October, the storm’s aftermath appears to be have given sales a strong tailwind in November.

Analysts now estimate the industry could have gained as much as 100,000 sales last month that had been postponed because of the massive East Coast storm. And demand also appears to be picking up as motorists race to replace vehicles damaged or destroyed during the disastrous storm.

With consumers in a generally upbeat mood – reflected in strong Black Friday sales – preliminary estimates suggest November may have set an industry peak, with demand running as high as 15.1 million on an annualized basis.

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While General Motors reported a relatively modest 3% increase for the month, Nissan’s luxury brand Infiniti posted a 41.2% year-over-year gain. And Volkswagen had its best November since 1973. Other gainers included Toyota, jumping 17.2%; Ford, up 6%; Chrysler picking up 14% — with its Fiat brand jumping 123% — and the Nissan brand up 9.8%.

Hyundai Motor America posted record sales of 53,487 vehicles in November, an 8% total sales increase compared with the same record-setting period a year ago. Sales are also up 8% for the first eleven months of the year.

“The Black Friday sales period once again provided a strong boost for Hyundai in the back half of the month and helped break our all-time November sales record,” said Dave Zuchowski, executive vice president of sales. “We were also very encouraged by the strong sales recovery experienced in those northeastern regions that were ravaged by Super Storm Sandy and expect continued momentum there for the balance of the year.”

Analysts have been closely watching Hyundai and sibling Korean brand Kia to see if they might take a hit after restating their fuel economy ratings last month, an embarrassing setback that saw the figures for 13 models dip by as much as 6 mpg. Hyundai and Kia took aggressive steps to get out in front of the problem – among other things offering impacted owners debit cards covering the likely added cost of fuel , plus 15%.

The maker also appears to have increased incentives by as much as 30% for the month, according to an estimate by TrueCar.com, hoping to win back buyers who might otherwise have strayed.

November was seen as a critical month for the industry after October came in slightly below expectations – much of that, however, blamed on Superstorm Sandy, which struck one of the nation’s most populous regions in the final days of the month.

But other factors left analysts debating what might happen in November. For one thing, would consumers pull back on spending while Congress and the White House argued over ways to avoid pushing the nation off the so-called “fiscal cliff” and into another recession.

“Even with all the talk of a looming fiscal cliff, Chrysler Group is well positioned for a strong sales finish to the year,” said Reid Bigland, President and CEO of the Dodge Brand and head of U.S. Sales, who noted that November extended Chrysler’s sales streak to 32 consecutive months of year-over-year gains.

“We are expecting a strong December as the industry continues to recover from the East Coast hurricane and consumers continue to respond to our popular year-end Big Finish event,” Bigland said.

Chrysler officials are among the most bullish on November, estimating that when total U.S. industry sales figures are in the market will have reached a 15.3 million Seasonally Adjusted Annual sales Rate, or SAAR.

Paul A. Eisenstein contributed to this report.

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