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The success and future growth of Sirius XM (NASDAQ:SIRI) is based primarily on the satellite radio subscriptions it gets from new car sales. Sixty-seven percent of all new cars come with a trial subscription to Sirius XM according to the current CEO Mel Karmazin. New car sales for November are estimated to be up almost 13 percent from November 2011. The SAAR would be the highest since February 2008 at 15.2 million new cars according to TrueCar.com:

• For November 2012, new light vehicle sales in the U.S. (including fleet) are expected to be 1,120,088 units, up 12.7 percent from November 2011 and up 2.6 percent from October 2012 (on an unadjusted basis)
• The November 2012 forecast translates into a Seasonally Adjusted Annualized Rate ("SAAR") of 15.2 million new car sales, up from 13.5 million in November 2011 and up from 14.3 million in October 2012
• Retail sales are up 13.1 percent compared to November 2011 and up 6.3 percent from October 2012

This should make Q4 results for Sirius even more spectacular. At the end of October analysts were predicting that the EPS for Q4 would triple from one cent per share last year, to three cents a share this year. Now earnings may be even higher with these estimated new car numbers. Some of the increase was due to hurricane Sandy, which caused the need to replace cars damaged by the storm:

"November was a strong month for new car sales and the impact from hurricane Sandy helped to boost auto sales to its highest since February 2008," said Jesse Toprak, senior analyst at TrueCar.com. "Import automakers got the biggest lift due to some increased incentive spending building momentum heading into next year. We don't expect any major impact on auto sales from the ongoing fiscal cliff discussions."

I agree with Toprak, that car sales should not be impacted from the fiscal cliff uncertainty, which in turn means that Sirius should not be impacted. As you can see from the chart below, Sirius outperformed the entire market in 2011 when there was so much fiscal uncertainty. Granted this "fiscal cliff" is worse, but Sirius is still holding its ground compared to the rest of the market:

Chart forSIRIUS XM Radio Inc.

Recommendation Trends according to Yahoo Finance:

 Current MonthLast MonthTwo Months AgoThree Months Ago
Strong Buy5544
Buy6666
Hold4445
Underperform1110
Sell0000

And most of the analysts that are covering Sirius are still recommending it as a buy or strong buy in spite of the possible gloom and doom. There is a lot of chatter around the financial sites dismissing the fiscal cliff as "hype". I completely disagree. Even IF the two sides come to an agreement before the January 1 deadline, it is quite probable that the result will be much higher taxes, and deep spending cuts. This will affect everyone either directly or indirectly. However, as I said, Sirius should hold up better than the rest of the market. And considering that there is a high price target of $4 a share, the upside from the current $2.70 can not be ignored.

Source: Sirius XM: Estimated New Car Sales For November Brings SAAR To 15.2 Million

Additional disclosure: I may buy Sirius XM stock in the next 72 hours.