America had a good year in the driver’s seat, with nearly 12.8 million vehicles sold in 2011, finds TrueCar.com. As the Newshour reports, “the three major U.S. automakers captured 47 percent of the total market in 2011, up from 45 percent in 2010. The two automakers bailed out in 2009 showed a healthy jump in sales, Chrysler up 26 percent and GM up 13 percent. Ford’s sales were up 11 percent.”
This contrasts with international players, particularly those based in Asia. Companies there faced the double crisis of Japan’s earthquake and Thailand’s floods, which disrupted operations and supply chains. This week’s Detroit Auto show may signal a turning point, however, where “Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. will display more than a dozen all-new or refreshed models they plan to launch into the U.S. Market,” says the Detroit News.
As early as Q3 2011, the year’s increased revenues had auto execs in an acquisitive mood. KPMG’s automotive pulse survey found “60 percent expect their companies to be involved in a merger or acquisition over the next two years, with 55 percent anticipating their role as buyer in the transaction.” Still, headwinds in 2012 abound. “Automakers forecast slower U.S. sales growth in 2012, citing weak employment and economic uncertainty, even after closing December on a strong note,” finds the Chicago Tribune.
Unfortunately, auto-sector investors had a bumpy ride in 2011. The Dow Jones U.S. Automobiles Index tumbled 33.4%, while the global index fell 20.5%. The chart below shows that these losses followed a two-year period during which the sector staged a full recovery from its lows in early 2009. What’s ahead for 2012? Given recent volatility, even the most optimistic of investors may want to buckle in.