Presidents Day promotions and a slight warm-up from January’s unusually harsh winter weather may have helped U.S. auto sales improve this month, but probably not by much.
Automotive News reported that high inventories and rising incentives are raising questions about whether the auto industry has lost some of its momentum as the critical spring selling season draws near.
“We expect elevated incentive spending to continue,” Larry Dominique, executive vice president of TrueCar, said in a statement. “March is going to be a ‘must-win’ month for dealers if they hope to have a successful 2014.”
TrueCar estimates that February new-vehicle sales will rise just 0.5% from a year ago, to a seasonally adjusted annualized rate of 15.4 million. That compares with a SAAR of 15.2 million last month, when snowstorms and subzero temperatures across large swaths of the country dampened showroom traffic, and 15.3 million in February 2013.
For the full story click here.
Auto sales are on pace to increase at least 12% this month from a year ago, according to four analyst forecasts released today (Oct. 25), as the industry regains momentum lost during a weak September and a 16-day government shutdown.
Automotive News reported that analysts from LMC Automotive, Kelley Blue Book and Barclays Capital each said the industry’s seasonally adjusted annualized selling rate would climb to an estimated 15.4 million, from 14.2 million in October 2012. Edmunds.com is forecasting a 13% increase and a SAAR of 15.5 million.
“It looks like the government shutdown ended just in the nick of time,” Jessica Caldwell, Edmunds’ senior analyst, said in a statement. “The week-by-week data suggests that consumers started to get jittery by the middle of the month. But with the government back to work, most lost sales should be made up in the latter half of the month, and the industry’s momentum will continue the pace it enjoyed before the disruption in Washington.”
Registration data from J.D. Power and Associates, which LMC uses to prepare its forecasts, show that retail sales strengthened after the government resumed operations Oct. 17. Sales were most affected in the Atlantic Coast region, falling 6.5% in the first two weeks of the month before rising 2.5% after the shutdown ended. LMC expects retail sales nationwide to be up 12% for all of October.
To read the entire article click here.
Auto website Edmunds.com predicts U.S. auto sales will hit 16.4 million vehicles in 2014. As reported by the Detroit News, that would be up about 6% over the 15.5 million expected in 2013 and would be the most since 2006, when Americans bought 16.5 million cars and trucks.
“The average age of all light vehicles on the road climbed to 11.4 years in 2013, and an aging fleet will continue to force buyers back to the market next year,” said Edmunds.com chief economist Lacey Plache. “With used car prices still elevated over past norms and used car supply still tight, the new car market will remain attractive to many of these buyers.”
Plache predicts the auto sales environment in 2014 will closely resemble 2013. Edmunds projects that new car sales will come in at around 15.5 million. That includes a continued flood of lease returns to the market: Edmunds estimates that 500,000 more leases will expire in 2013 than in 2012 and predicts it will grow by an additional 300,000 in 2014, accounting for about a third of all expected sales growth in 2014.
The selling rate for new cars and trucks in September was 15.3 million, down from 16.1 million in August.
Edmunds says if new car sales grow at the 6% rate it projects, it will be the slowest year-to-year growth since auto sales bottomed out in 2009.
“The economy has not yet improved enough for recovery to widely reach the groups hardest hit by the recession, including young people, lower-income households and small businesses,” said Plache. “Even though auto sales from these groups have improved from recession lows, their participation in the recovery still lags the rest of the market.”
Morgan Stanley auto analyst Adam Jonas said in a research note there are warning signs for the auto industry, especially in “industry pricing discipline… This industry is clearly better than it was in 2006, but may not be quite as good as you think it is.”
To read the entire article click here.
There’s only one possible conclusion if you believe a panel of economists at the CAR Management Briefing Seminars in Traverse City, Mich., last week: The future of the North American auto industry is so bright that we should all be donning shades.
It was happy talk, yes — but backed by a big wad of data.
Automotive News reported that new vehicle sales in the United States have risen for 26 straight months, but “we are not even back to trend,” said Mustafa Mohatarem, chief economist for General Motors. “Things are very, very positive.”
For starters, North America will have a spike in sales in 2015 thanks to a “scrappage balloon” — old vehicles biting the dust and sending those clunker owners streaming into showrooms.
Automakers are on track to exceed the North American production record of 17.2 million units in 2016. But with exports to growing markets elsewhere in the world ready to take off, production records are expected through at least 2020.
Also, manufacturers are primed to introduce or significantly rework a record number of vehicles in the next three years as they race to meet tightening fuel economy standards in 2016.
To read the entire article click here.
On top of that there is the return of leasing to consider, and the prospects that younger demographic groups — the ones who, according to various surveys, don’t like cars — will change their minds when they get a job, pay down their student debt and can afford to buy one.
March is turning out to be the best month for auto sales in at least six years. The Associated Press reported that major automakers including Ford, Chrysler, Toyota, General Motors and Nissan all reported increases, with some reporting their best monthly totals since the start of the Great Recession in December 2007.
Buyers were lured to showrooms by flashy new vehicles and low interest rates. Moreover, they continue to replace older cars and trucks — the average age of a vehicle on U.S. roads is more than 11 years.
“A strong first-quarter close and increased consumer confidence continue to position the auto industry as a leader in the economic recovery,” Bob Carter, Toyota’s senior vice president of automotive operations, said in a statement.
Sales at Ford and General Motors each rose about 6%, while Chrysler sales rose 5% compared with last March. Toyota and Nissan each reported 1% sales increases, but Nissan said March was still the best month in company history. Chrysler sold nearly 172,000 cars and trucks, its best month since December 2007, while Ford reported its best month since May 2007 with sales of about 236,000.
Toyota sold more than 205,000 cars and trucks in March, its highest total since August 2009, when the government paid people to trade in their clunkers for new vehicles. But Toyota’s pace of growth is slowing because sales are being compared with huge monthly increases last year. Both Toyota and Honda had big years in 2012 as they recovered from a 2011 earthquake in Japan that hobbled their factories and caused shortages of cars and trucks.
Industry analysts estimate that total March sales reached nearly 1.5 million cars and trucks, a number not seen since May 2007. Total U.S. sales are expected to be up 3% to 5% over March 2012.
The strong numbers are another sign that Americans are buying cars in increasing numbers as their financial situation improves.
Alec Gutierrez, a senior market analyst with Kelley Blue Book, said the improving job market is boosting sales. The number of Americans seeking unemployment benefits fell to a five-year low during March. Low interest rates are also making new-car purchases more appealing, Gutierrez said. The average rate for a 60-month new-car loan is now 4.12%, down from 4.52% at this time last year, according to Bankrate.com.
Gutierrez also said tax refunds may have spurred purchases. The average federal tax refund this year is nearly $3,000, or enough to cover the down payment on a three-year lease of a Toyota Camry hybrid or a BMW 3-Series sedan.
Americans want new cars and trucks, and they’re not going to let higher gas prices or political dysfunction in Washington stand in their way.
The Associated Press reported that General Motors, Toyota, Ford and most other automakers posted at least modest sales gains for February. Industry analysts estimate last month’s sales rose about 7% from a year earlier as pent-up demand and cheap financing kept the U.S. auto sales recovery powering along.
GM sales rose 7%, while Ford’s increased 9 percent. Chrysler and Volkswagen also reported increases, but both slowed from the torrid pace of the past two years. Chrysler sales were up 4% over a year earlier, while VW sales were up 3 percent. Toyota sales were up just over 4%, while Hyundai posted a 2% gain.
Of the major automakers, Nissan and Honda were down. Nissan sales were off almost 7% from a record February of 2012, while Honda blamed its 2% drop on the winter snowstorm in the Northeast.
But while sales for 2013 are expected to top last year’s figures, monthly increases are likely to be smaller than the double-digit gains the industry has regularly posted as sales recovered from historic lows following the recession.
Still, GM’s sales were the best since February of 2008, led by the Chevrolet Silverado pickup with an increase of 29%. Kurt McNeil, the company’s U.S. sales chief, said the recovery in new home construction is helping to boost the economy and pickup sales. When home construction thrives, businesses tend to invest more to replace vehicles. The average age of a U.S. pickup truck is just over 11 years.
Ford also reported strong sales of its F-Series pickups, up 15%. The company also posted record February totals for the Escape SUV and Fusion sedan.
U.S. auto sales in February remain strong despite rising fuel prices and the threat of fresh government spending cuts, two independent forecasters say.
Automotive News reported that LMC Automotive, the forecasting partner of J.D. Power and Associates, today projected a seasonally adjusted annualized sales rate of 15.2 million for February, based on the first 14 days of the month.
Citing an improving U.S. economy, LMC also raised its estimate for the full year by 200,000 units to 15.3 million light vehicles.
U.S. sales grew 13% last year to 14.5 million units, as the industry continued its comeback from the recession low of 10.4 million recorded in 2009.
“Current fundamentals driving strong vehicles sales … are expected to get a boost by additional positive factors this year,” said Jeff Schuster, the company’s top auto forecaster, citing an anticipated housing recovery, more new-model launches and a higher number of vehicles coming off lease.
Automakers plan to release February sales results on March 1.
To read the entire article click here.
Most of the big car companies are reporting double-digit gains for January as last year’s momentum in U.S. auto sales continues into 2013.
The Associated Press reported that sales at Toyota rose 27% and jumped 22% at Ford, including a 22% gain in the company’s F-Series pickup truck. GM and Chrysler each reported 16% gains compared with a year earlier. It was Chrysler’s best January in five years.
GM’s Chevrolet Silverado and GMC Sierra each saw increases of over 30% while sales of the Ram pickup, Chrysler’s top-selling vehicle, rose 14% from a year earlier. Those gains give a strong indication that businesses are replacing aging pickup trucks that they kept through the Great Recession.
But Volkswagen, which reported a 31% increase in 2012, saw sales slow a bit, growing only 7%.
Other automakers report sales later Friday. The figures so far indicate that Americans bought new vehicles at a strong pace last month, as the industry remains a bright spot in a tepid U.S. economic recovery.
“The sales pace we saw in the fourth quarter of last year rolled into January, exceeding our expectations for the industry,” Bill Fay, Toyota Division group vice president, said in a statement.
Chrysler estimates that total U.S. industry sales hit an annual rate of 15.5 million in January. If that holds for the rest of the year, automakers will sell 1 million more vehicles than in 2012, when sales rose 13%.
Analysts are expecting sales for all of 2013 to reach 15 million to 15.5 million. Although still far from the recent peak of about 17 million in 2005, the industry could sell a whopping 5 million more cars and trucks than it did in 2009, the worst year in at least three decades.
At Ford, the growth was led by the Fusion midsize car, which saw a 65% increase, and Explorer SUV sales rose 46%.
U.S. auto sales for 2012 to be announced later this week are a shoo-in to be the best since 2007, and more than 1.5 million units higher than 2011.
According to Forbes, the good news is that the downsized domestic car companies – the Chrysler Group, Ford Motor Co. and General Motors – are far more profitable at total U.S. industry sales of 14.5 million than they were before the recession, at an average sales rate of more than 16 million.
The bad news is that it could be another couple of years before U.S. auto sales top 16 million again, analysts said.
The car companies are expected to announce U.S. auto sales on Jan. 3 for the month of December 2012 and for the full year.
Forecasts for full-year 2012 auto sales average out at around 14.5 million cars and trucks, up 13% from around 12.8 million in 2011. That’s according to Peter Nesvold, New York-based analyst for Jefferies & Co. Inc.
That makes 2012 the best year since 2007. In only 11 months of 2012, U.S. auto sales already topped all of 2011.
Despite the improvement, auto sales still have a lot of catching up to do. U.S. auto sales bottomed out in 2009, the year that GM and Chrysler declared bankruptcy.
Sales in 2009 were only 10.4 million. That was the lowest point for U.S. auto sales per capita since World War II.
How low was 2009? Sales were down close to 3 million units from 2008, which was down close to 3 million units from 2007.
What that means is, even after three years of double-digit improvement, 2012 auto sales will still be nearly 1.8 million below 2007, when sales were 16.2 million.
As fewer people bought new cars, the age of the average car on the road has increased to a record high of more than 11 years old, according to the R.L. Polk Co.
It’s going to take years of sales improvements to slow down the rate of increase in that number.
Several automakers on Monday (Dec. 3) reported strong U.S. new-car sales for November as the industry rebounded from a storm-ravaged October while also benefiting from pent-up demand.
Reuters reported that Ford Motor Co. posted better-than-expected sales and Chrysler Group LLC, Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. also saw strong increases that industry executives said should continue through the end of the year.
“We are expecting a strong December as the industry continues to recover from the East Coast hurricane,” Chrysler U.S. sales chief Reid Bigland said in a statement.
However, sales for General Motors Co. came in short of expectations. The No. 1 U.S. automaker said it benefited less than its rivals from the November recovery after superstorm Sandy hit the Northeast.
Auto sales are an early indicator each month of U.S. consumer demand.
Several analysts expect the industry’s overall U.S. sales of new cars and trucks to rise 11% to 13% in November, with the annual selling rate for the month finishing in the range of 14.7 million to 15.3 million vehicles. Ford expects sales in November to rise about 10 percent, while GM sees an annual sales rate of 15.3 million.
Superstorm Sandy hurt the last few days of sales in October, which finished below expectations. In addition, the average age of cars on the road has risen to just above 11 years old, and industry officials say that will continue to drive demand.
Kurt McNeil, GM’s vice president of U.S. sales operations, said the auto industry is clearly heading this year toward the high end of the company’s forecasted range of 14 million to 14.5 million. Many analysts expect the industry to finish 2012 with 14.4 million sales, which would be the strongest year since 2007′s 16.1 million.
“Exactly how much growth we can expect next year will depend in part on how Congress and the president resolve the fiscal cliff issue,” McNeil said in a statement. “Consumers hate uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth.”
Jonathan Browning, CEO of Volkswagen Group of America, said he sees a continuation of a steady recovery for the economy as well as auto sales in December and into early 2013, but expressed concern about the negative impact on consumer confidence if the “fiscal cliff” occurs. VW brand sales rose more than 29%.
Ford’s November sales rose 6.5% to 177,673 vehicles, better than even some of the most optimistic forecasts for the No. 2 U.S. automaker. In a more positive sign for consumer demand, Ford’s retail sales rose 12%.
The company had its strongest small-car sales for the month in 12 years. Demand for Ford’s popular F-150 full-size pickup truck increased 17%, while GM’s rival Chevrolet Silverado pickup saw sales drop 10%.
Ford said it planned to build 750,000 vehicles in North America in the first quarter, which would be an 11% increase from 2012.
GM’s sales rose 3% to 186,505 cars and trucks, below what several analysts had expected. The company said the average price paid per vehicle rose $750 from last year.
Industry research firm TrueCar.com estimated that the industry’s average vehicle selling price in November rose 1.1%, or $335, from last year and a similar amount from October to $30,832.
Chrysler, majority owned by Fiat, said sales rose 14% to 122,565 cars and trucks, its strongest result since 2007 before a recession pushed the U.S. automaker and GM into bankruptcy.
Toyota’s sales rose more than 17% to 161,695 vehicles, while Nissan’s sales rose a stronger-than-expected 13% to 96,197 cars and trucks.
Hyundai said sales increased 8% to 53,487 vehicles, the company’s all-time high for the month. It was the first sales results since the South Korean automaker and its Kia affiliate announced they had overstated the fuel economy ratings by at least a mile per gallon on more than 1 million recently sold vehicles.