U.S. Auto Sales Rebounded 17% in November
All major automakers but Toyota reported strong U.S. sales increases in November as the auto industry’s slow-motion recovery continued to gain traction, Associated Press reported.
Ford, General Motors, Chrysler, Nissan, Hyundai and Honda all reported double-digit increases, and only Toyota, which has been hurt by a string of safety recalls, had a sales drop. Overall, according to Autodata Corp., U.S. sales last month rose 17% from November 2009, a month marked by consumer paralysis due to high unemployment.
The November performance helped an industry that is trying to recover from last year’s historic lows as credit froze up and two major automakers slid through bankruptcy court. Sales started the year with promise, peaked in May as consumer confidence rose, fell off during the summer and now have started to rebound.
Industry analysts say the solid November sales numbers, combined with a strong October, show that consumers who have kept their jobs through the economic downturn are now feeling confident enough to spend money and replace older vehicles.
Bob Carter, Toyota’s top U.S. sales executive, said Toyota can tell things are shifting because buyers are opting for more highly equipped sport utility vehicles, which indicates they aren’t just buying because they need family transportation.
“At the beginning of the year, the vast majority of buyers were those who needed a car, versus wanted a car,” he said.
Those who spent money last month also bought crossovers like the Chevrolet Equinox and Hyundai Santa Fe. Midsize cars like the Ford Fusion and Hyundai Sonata also sold well.
The increased sales likely are due to a combination of rising confidence and delayed buying as people replace vehicles they have kept for longer than normal during a severe auto industry downturn, said Bruce Clark, senior vice president of Moody’s Investors Service.
“There is a degree of pent-up demand that’s being met gradually by people who have kept jobs and can go out and afford to do such things,” Clark said. The sales are not as robust as historic highs from the early 2000s, but they are still a good sign for the industry, Clark said.
Yingzi Su, GM’s senior economist, said the stable and increasing auto sales mean that consumers with jobs are starting to spend again, the start of an upward trend for automakers and a good sign for the broader economic recovery going into next year.
Once businesses see increased consumer spending, she said, they will be more willing to hire workers, a factor that has held back the economic recovery for months.
Incentives such as sweet lease deals and rebates also helped push up sales last month. Automakers raised incentive spending about 6% over October to an average of $2,712 per vehicle, said the auto website TrueCar.com.
Of the major automakers, Hyundai Motor Co. had the biggest increase, up 45% from the same month last year. Nissan Motor Co. sales were up 27%, followed by Honda Motor Co. at 2%1 and Ford Motor Co. with 20%. Chrysler had a 17% increase, while General Motors reported sales up 11% from November of last year.
Toyota sales dipped 3%, with the company blaming the drop on a 60% cut in sales to fleet buyers such as rental car companies. Carter said Toyota didn’t want to match competitors’ low prices on fleet vehicles. Toyota said sales to individual customers were up slightly but they didn’t increase as much as the industry average.
Toyota has been fighting a string of embarrassing safety problems. The automaker has recalled more than 10 million vehicles worldwide mostly for problems with sticky gas pedals or floor mats that can trap the accelerator pedal.
GM reported increased showroom traffic toward the end of the month, an encouraging sign after its initial public stock offering on Nov. 18. The U.S. government, which spent $49.5 billion bailing GM out of its financial troubles last year, cut its stake in the company from 61% to about 33% by selling stock in the IPO. GM has maintained that government ownership has hurt its image with consumers and its sales. GM shares rose 2% to $34.78 in trading Wednesday.