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Is Ford (NYSE: F ) about to start off 2012 with a bang?
The industry watchers at Edmunds and TrueCar.com have posted their predictions for January auto sales, and once again, it looks like the Blue Oval is set for another strong gain. Despite earlier hints that sales for the industry as a whole might be set for a downturn, analysts now expect January's results to continue the sales momentum we saw late last year.
What to expect
Ford's profits came in below expectations last quarter, thanks to economic challenges overseas, but the company's North American operation posted a strong result. That was no surprise, as Ford's U.S. sales have gone from strength to strength in recent months, thanks to the company's relentless pace of new-product introductions and competitive portfolio.
If analysts' estimates hold, January will be another month of gains for the Blue Oval. Edmunds now predicts a 9.5% year-over-year increase, while TrueCar expects an 8% gain. Both expect Ford's gain to lead the overall market's pace, which is expected to be in the neighborhood of a 6% gain versus January 2011.
While pickups and small cars have been big sellers for Ford in recent months, we'll have to wait until the company releases its final January sales numbers later this week to know exactly where the strengths are at the moment. But if predictions hold, Ford won't be the only company with strong sales to tout when the numbers are tallied.
Toyota's surge and another monster performance for Chrysler
Everybody expects Chrysler to be January's big leader, with both TrueCar and Edmunds calling for year-over-year growth of more than 30%. Chrysler just keeps defying conventional wisdom, as its radically overhauled product portfolio and suddenly sharp marketing continue to draw new buyers into its showrooms.
But it's Toyota that might make the biggest splash, nearly a year after the Japanese earthquake and tsunami that devastated key suppliers and brought many of its production lines to a halt. After months of year-over-year sales declines as its dealers simply couldn't get the vehicles they needed, Toyota looks set to post a solid gain -- over its pre-tsunami January 2011 totals.
Edmunds is calling for a 4.4% year-over-year jump from Toyota, while TrueCar predicts a strong 11.2% gain. That latter would be quite a surprise -- but it would also be a strong sign of health for the Japanese giant. Rival Honda (NYSE: HMC ) won't be so lucky, as it is expected to post another monthly drop as it continues to struggle with damage from flooding in Thailand.
Either way, Toyota's gains could turn out to be General Motors' loss.
A stumble for GM, or something more?
Edmunds and TrueCar both see a significant year-over-year sales decline for the General, in the 9% range. While GM has held its ground well in recent months and was able to make considerable hay while Toyota and Honda suffered from shortages last year, a decline was probably inevitable once Toyota's production lines got back up to full speed.
To understand why, think about GM's recent history -- and remember that it takes roughly 28 to 36 months to develop a new car or truck under ideal conditions. While Ford's product renaissance famously started at full speed after Alan Mulally's mortgage-the-company moment in 2006, GM's efforts slowed to a crawl as cash became short in 2007 and 2008.
Many programs, including cars like the forthcoming Cadillac ATS, have been in the works for several years but were essentially put on hold during the company's decline into bankruptcy. Some were delayed for years after their originally planned launch dates. The competitive landscape shifted during those delays, as companies like Ford and Hyundai (OTC: HYMTF.PK) upped their games in big ways, and that meant further delays as original product specs were updated or rethought.
Long story short, while GM's recent products are solidly competitive, it doesn't have the end-to-end product portfolio strength that top rivals like Ford and Hyundai -- and Chrysler, to some extent -- can boast.
GM's aiming high, as it should, but getting there will take time -- another few years, most likely. Meanwhile, holding its sales ground against fresher products from Ford and a resurgent Toyota will be a monthly challenge for the General.
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