By Demian Russian
During Sirius XM Radio’s (NASDAQ:SIRI) Q4 conference call CEO Mel Karmazin stated, “The consensus for auto sales in 2012 is approximately $13.7 million…the fact that U.S. light vehicle sales should be up by 8% provides a solid foundation for subscriber growth this year.” Sirius XM management offered 2012 guidance for 1.3 million net new subscriber additions, which comes in below 2011′s 1.7 million and even 2010′s 1.4 million net new sub adds. While Karmazin even noted that he was “very optimistic about our ability to grow subscribers” and that he expects a “bigger contribution from the reactivation of radios in used cars” in 2012, he explained that the comapany’s subscriber guidance was “tempered by our sense of conservatism around the price increase we implemented January 1st, 2012.” Karmazin added, “We will update our guidance, if appropriate, as the year progresses.”
The year seems to be progressing well for auto sales according to TrueCar’s official February 2012 auto sales and incentives forecast, released today. TrueCar expects new car sales in February to be the highest in nearly four years. TrueCar is forecasting that new light vehicle sales in the U.S. (including fleet) during the month of February will total 1,088,321 units, up 19.2% month-over-month and 9.6% year-over-year. This translates into a SAAR (Seasonally Adjusted Annualized Rate) of 14.3 million, up from 13.3 million in February 2011 and up from 14.2 million in January 2012. TrueCar also upgraded its 2012 total sales forecast from 13.8 to 14.0 million.
The signs for 2012 point to a great period of recovery for automakers as the industry looks at continued growth through the year. We are upgrading our 2012 forecast to 14.0 million units based on improving consumer demand, better credit availability, and dozens of compelling new products due to arrive at the dealerships this year. The correlation between the stock market and new vehicle sales proved to be extremely strong once again with both the Dow Jones Industrial Average and new vehicle SAAR reaching their highest levels since May 2008 in February.
– Jesse Toprak, Vice President of Industry Trends and Insights for TrueCar.com
TrueCar expects retail sales to be up 13.4% month-over-month and 5.6% year-over-year. While fleet sales in January rose to a higher than average 24% of total industry sales, TrueCar is expecting fleet and rental sales in February to temper to 21.5% of total sales. Even with February sales expected to be so robust, TrueCar is forecasting that industry incentive spending will actually show a decrease. TrueCar is expecting the industry average for incentive spending per unit will be approximately $2,468, down 4.2% year-over-year and 0.6% month-over-month.
Consumer interest at TrueCar.com for fuel-efficient models is up 15 percent this month compared to last year, indicating a shift in shopping preferences as gas prices have increased. We expect to see 20 percent increases year-over-year for most hybrid models as well as gas-engine smaller vehicles such as the Ford Focus and Honda Civic.
– Kristen Andersson, Senior Analyst at TrueCar.com
TrueCar is estimating that used vehicle sales during the month of February will total 2,099,298, up 16.5% year-over-year and down 3.1% month-over-month. The ratio of new to used is estimated to be 1:2.
A January 25th Playground Radio interview with Jesse Toprak, Vice President of Industry Trends and Insights at TrueCar, is available for streaming via the following link:
*Graphs provided courtesy of TrueCar.
Disclosure: Long SIRI