US SAAR 2012 math: 2012: 1+1=1.5

Automotive News ran a great article this week on why the consensus for 2012 US SAAR is stretched to more than 14 million.  Mark Rechtin wisely did the old trick of adding up all the company forecasts and got …..14.5 million, surprisingly the high end forecast. If you’ve read my past columns you know I clearly don’t believe that everyone is going to hit their number and that 1+1 this year will be far less than 2.

So let’s look at who should and who might not.  The key to volume this year will be two main points.

1) New Product

2) J3 recovery with Toyota, Honda and to a lesser extent Nissan clawing back market share lost in last year’s earthquake.

3) Well, there is a point 3, one I hate to mention: discounts and fleet sales!

Toyota 7201T:+354: probably come close. I assume the J3 will see at least 300-400k increase just due to having the product compared to last year.  This comp will peak in Q2 of 2012 (Apr-Jun).  Jan – Mar are more normalized compared to last year — even though Toyota was still suffering from the bashing its reputation took over quality.  Summer launch of new Camry, more normal pricing and I see the +350 definitely do-able

Ford F: up 57K units, sure.  Continued roll-out of Truck lineup, new Fusion and Escape.  May lose on the Taurus and Focus here and there, but on pure market growth this is conservative.

Honda 7267.t: +283K on volume is punchier than Toyota.  Honda had the lowest level of inventory in 2011 and with a new CR-V and Accord, both bread and butter products, expect a big push.  If we can combine catch-up with market growth they should come close.

Nissan 7201.T: While they didn’t lose as big as their peers, Nissan’s +200 goal is reasonable.  Infiniti took a hit last year and with the new J should post better numbers.  A new Altima, Versa and Pathfinder will add to the mix. And If Ghosn’s forecast is correct, the Leaf should account for a quarter of the gain, but don’t hold your breath on that one!

Volkswagen: +56, well with a new plant (one point I failed to mention) and leverage of the engines out of Mexico, VAG should be able to deliver.  The new Passat has gained visibility as 2012 Motor Trend Car of the Year, and if sales pick up on the East Coast at a good clip, that is favorable.

So on the negative side, it’s pretty simple.  GM and Chrysler both have new product.  The new Malibu is a great car, and the new Dart, well; I’ll just say it’s a hell of an improvement over whatever the predecessor was.  With Jeep one year older, GM trucks one year older and the market moving down, I don’t see the volume coming, at least at the retail level.

I don’t have a comment today on Hyundai Kia, the powerhouse over the past two years who have surged on great new product, also I offered no real thoughts on Luxury…..they will come shortly.

We may see fleet sales step up and fill the gap, particularly since their past purchases were anemic until end of 2011, and if they do, expect these guys to fill the need.

COMMENT: I see the positives coming close, the negatives falling short and others standing still with a market coming in around 13.5 million (not a very bold stance).  Frankly it’s too early to tell which way the economy is heading this year, and my biggest fear is an economic freeze over Euro debt fallout or a DC political showdown in an election year.

We’ll just have to wait and see, but I always bet on solid new product!


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