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.
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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.
Chrysler had its best October in five years as sales for the month rose 10% despite the loss of three days of business on the East Coast from the storm.
The company said Thursday (Nov. 1) that it sold 126,000 cars and trucks for the month, led by the Ram pickup, which was up 20%, and the Dodge Caravan minivan, which saw sales rise 49%.
At Ford, sales were up only 0.4% to 168,000 cars and trucks. But the company said F-Series pickup trucks, the most popular vehicle in the nation, had their best October in eight years with sales up 8% to just over 56,000.
Sales at General Motors were up 4.7% for the month, and Toyota sales rose 15.8%.
The results showed that Americans continue to buy new cars and trucks at a strong pace. The company predicted an annual sales rate of 14.7 million for the overall industry in the United States in October, making it one of the year’s strongest months. Auto sales ran at an annual rate of 14.3 million through September.
Hurricane Sandy could cut sales by 1% to 3%, or about 20,000 vehicles, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting firm. Schuster said any lost sales would probably shift to November, increasing totals for that month.
Sales have been recovering from a 30-year low of 10.4 million in 2009, when credit froze, unemployment leapt and few people were buying cars. But the numbers are still far short of the recent peak of around 17 million in 2005. Analysts predict the country could reach 15 million in sales next year, which they consider about normal.
Toyota Motor Corp. and Volkswagen AG’s VW brand continued to post robust U.S. sales increases while deliveries at General Motors Inc. and Ford Motor Co. were flat in September, a month that is expected to generate more steady gains for the industry.
The Associated Press reported that Toyota said combined sales at Toyota, Lexus and Scion jumped 42%. It was the second consecutive month deliveries rose 40% or more as the automaker continues to rebound strongly from last year’s earthquake in Japan.
Volkswagen reported sales at the VW brand climbed 38% and boasted it expects to continue to outperform the industry during the fourth quarter.
Detroit’s two biggest automakers cited lower truck volume — a traditional stronghold — for sales that were down less than a percent at Ford and up just 1.5% at GM. The results will likely mean more market share losses for the companies.
Chrysler Group posted a 12% rise in U.S. sales last month, helped by a 27% increase in car deliveries and big gains at the Fiat and Dodge brands. Hyundai brand sales rose 15% to 60,025 last month, marking its biggest gain since February, according to a Twitter post by CEO John Krafcik.
Other automakers are scheduled to release September sales figures later today. The early results signal the industry continues to rebound despite mixed economic reports, high gasoline prices, sluggish job growth and the prospect of deep cuts in federal spending.
“The industry is on plan, Ford is on plan, and we’re looking forward to a really good fourth quarter,” said Ken Czubay, head of U.S. marketing, sales and service for Ford.
After tracking well for so many months, the hugely promising 2012 auto sales recovery has leveled off — and appears unlikely to regain momentum before year end.
What’s the lowdown on the slowdown?
Automotive News reported that pent-up demand and an aging used-vehicle fleet kept August new-vehicle sales afloat, executives and analysts say. But weak economic fundamentals have the market in a rut — stuck at a 14 million annual pace.
“We’re not seeing upward spikes,” said Kelley Blue Book analyst Alec Gutierrez.
In an outbreak of cautiousness, three forecasters have cut sales outlooks for the year.
Consumer confidence is the missing element.
“People want a reason to commit to a new car, but there’s still some economic skittishness,” said George Borst, CEO of Toyota Financial Services.
Executives don’t expect much traction until passing political roadblocks. The November election is first. Then massive tax hikes and federal spending cuts automatically kick in Jan. 1, unless a deadlocked Congress can agree on legislation to alter or prevent them.
Jim O’Sullivan, Mazda’s top U.S. executive, says Europe’s economic crisis and uncertainty about how Washington policymakers will navigate the fiscal cliff is weighing on consumers.
“Let’s just say I’m guardedly optimistic about the back half” of the year, he said.
Forecasters put the August sales pace in line with the past five months. TrueCar.com sees the seasonally adjusted annual rate at 13.9 million, the same as in May. At the high end of five forecasts, LMC Automotive says 14.5 million.
The year started strong. January was the first 14 million SAAR since cash for clunkers and February’s rate rose to 14.5 million.
Automotive News reported that sales this year are substantially better than 2011′s 12.8 million units and are on pace for a third straight year of improvement.
“It’s being driven by lingering pent-up demand,” said Gutierrez, who expects August’s sales pace to hit 14.4 million. “But … there’s still a lot of uncertainty.”
The election is a big reason for that, says Toyota Financial’s Borst.
“Come November, there is going to be clarity in the direction the country is going to go,” he said.
But TrueCar.com analyst Jesse Toprak said consumer and business uncertainty over Congress is an even bigger drag on sales than the presidential contest.
“Congressional performance affects everything,” he said “The ability to lend, consumer comfort, business investment and hiring. It has an overarching effect on the economy and car sales.”
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Consumers flocked to car dealerships last month as they scrambled to replace gas-guzzling vehicles with more efficient cars, encouraged by a strengthening economy, according to a report in the Los Angeles Times.
“The combination of credit availability, an improving economy, pent-up demand and even high fuel prices encouraging people to acquire newer, more fuel-efficient vehicles are all helping to drive industry sales,” said Reid Bigland, Chrysler’s U.S. sales chief.
Chrysler Group said its U.S. sales rose 34% in March to 163,381 vehicles compared with the same month a year ago. It was Chrysler’s best monthly sales in four years.
Analysts believe that by the time all the automakers report Tuesday (April 3), the industry will have logged sales of about 1.5-million cars in March, more than it has in any month since 2007.
That’s prompted auto analyst Jesse Toprak of TrueCar.com to raise his annual sales forecast to 14.5-million vehicles, which would make 2012 the best year since 2007, when Americans purchased 16.3-million autos.
An improving job market and the rally on Wall Street are providing buy signs for consumers, he said.
“Look at the stock market. There is a strong correlation between the Dow Jones industrial average and car sales. It is like a green light for car purchases,” Toprak said.
Easier credit is also helping people to purchase cars.
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