Automakers prefer the US market for profit

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From Bloomberg:

Three years after sales tumbled to the lowest in more than a quarter-century, the U.S. auto market may be emerging as the safest bet for predictable and profitable growth as China, India and Brazil slow.

“The U.S. is now the high-growth market in the world as much as India or China,” said Xavier Mosquet, senior partner for Boston Consulting Group in Detroit and an adviser in 2009 to the government rescues of General Motors Co. (GM) and Chrysler Group LLC. “The worst thing five years ago was to be a U.S. automaker or supplier. Now it’s the best thing to be.”

U.S. car and light truck sales probably rose at a faster pace than China’s vehicle sales last year for the first time since at least 1998, fueled by a recovery in consumer confidence. That’s a reversal from 2009, when plunging sales helped push Detroit-based GM and Auburn Hills, Michigan-based Chrysler into bankruptcy along with dozens of their suppliers. Automakers closed plants in the U.S. and cut production as China passed it to become the world’s largest car and truck bazaar.

Now the U.S. is growing while sales are moderating in Brazil, India and China and will probably drop in debt-stricken Europe, Mosquet said in an interview Jan. 9 at the North American International Auto Show in Detroit.

“As I look around the world, my greatest confidence is about the U.S.,” said Mustafa Mohatarem, chief economist for GM, which retook global auto sales leadership from Toyota Motor Corp. (7203) last year. In giving his outlook for 2012 at the Society of Automotive Analysts’ Jan. 8 conference in Detroit, he said “the most surprising thing to many will be that the U.S. will once again be in the leading position.”

U.S. Growth

U.S. light-vehicle deliveries climbed 10 percent, or almost 1.19 million, to 12.8 million in 2011, according to researcher Autodata Corp. That’s the second consecutive annual increase of at least 10 percent after the industry’s 27-year low of 10.4 million sales in 2009. Deliveries may rise about 5.6 percent this year to 13.5 million, the average estimate of 10 analysts surveyed by Bloomberg.

Deliveries in China may have risen 3 percent to 5 percent last year, the smallest increase in at least 12 years, according to the China Association of Automobile Manufacturers, which is scheduled to release annual results this week. Based on 2010 sales of 18 million vehicles, the total may have grown by less than 1 million. Before 2011, growth in China outpaced the U.S. every year according to CAAM figures stretching back to 1998.