Analysts say auto sales recovery on its way… but it will take long

Despite the crushed hopes of many in the auto industry concerning weak sales and diminished recovery, analysts have spotted trends which indicate that despite the slowness involved, a recovery is still under way, albeit a slow one. Two positive economic signs, the increase in sales of trucks and fleet vehicles, have been observed.

“We still see no signs of recovery in demand and therefore think sales are likely to stay in the 11 million to 12 million range for the time being,” said J.P. Morgan analyst Kohei Takahashi, in response to mixed economic data. He also commented that consumer confidence is slow to return, but once those consumers financial positions get better, they should be more apt to spend.

Numbers are definitely down from the same time last year, though key segments have shown strength, which is where the analysts derive their confidence. One analyst from Kelly’s Blue Book points out that many car shoppers may have held off in August in anticipation of big Labor Day deals. He also mentioned that automakers are now better prepared not to out-produce demand, so that inventory-clearing fire sales are not apt to happen.

– By: Stephen Calogera

Source: Detroit News