Auto sales in December have seen a distinct improvement from November, but were slightly off pace with initial projections, which were as high as 1,273,000 in a mid-month forecast presented by auto tracking website Edmunds. Yesterday Edmunds lowered their forecast to 1,230,000, and today JD Power seems to confirm the information with a forecast of their own that pegs December sales at 1,230,100 units. The numbers, if they come to fruition, would drop the Seasonally Adjusted Annualized Rate (SAAR) to 13.4 million, down from 13.6 million in November. Overall sales for the year (2011) would come in at about 12,750,000, up from 11,600,000 last year.
For investors in Sirius XM there can be some confidence in that the actual sales for 2011 are within the range that Sirius XM CEO Mel Karmazin stated that he based his guidance on.
As we get ready to close out 2011, it is time to look into 2012 and see where the auto sector will stack up. At this point most analysts are looking for additional gains in 2012, but not to the extent that we saw from 2010 to 2011.
"With December sales tracking as expected, LMC Automotive is holding its 2011 forecast at 10.3 million units for retail light-vehicle sales and 12.7 million units for total light-vehicle sales. LMC Automotive's forecast for 2012 remains at 13.8 million units for total light-vehicle sales, but has been adjusted slightly upward to 11.3 million units (from 11.2 million units) for retail light-vehicle sales."
"For the third straight time, light-vehicle sales are posting strong selling rates at the close of the year," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Next year, the automotive industry will look to build upon the strong finish to 2011, but the real test in 2012 will be weathering a summer selling slowdown and posting a full year of a progressive recovery."
Essentially we will see an absolute gain of 1.1 million vehicles in 2011 from 2010, or a 9% gain. The jump of 1.1 million units projected from 2011 to 2012 will represent an 8.5% gain. The key in 2012 is that the sector can normalize with full recovery from the disaster in Japan and the flooding in Thailand. A normalized year should help take some of the choppiness out of Sirius XM's subscriber picture.
In 2010 the satellite radio produced 1.4 million net subscribers on auto sales of 11.6 million. The company is projected to announce about 1.6 million new net subscribers on 2011 sales of 12.7 million. With 2012 set to be at 13.8 million, one could surmise that 1.7 to 1.8 million new subscribers will join the fold in 2012.