Truck Demand Expected to Lift June Auto Sales

July 1, 2013 by · Comments Off on Truck Demand Expected to Lift June Auto Sales 

U.S. car dealers like Don Kerstetter have every reason to be happy these days as the industry is partying like it’s 2007 — facing demand not seen since before a recession that drove General Motors and Chrysler into bankruptcy.

According to a Reuters report, the owner of Classic Chevrolet Sugar Land outside Houston is on pace for another month of new-car sales above 200, driven by demand for the full-sized pickup trucks that Texans love.

“The month has been good,” he boasted. “It’s picked up over the last week or so in particular. Credit’s generally good in our area.”

Kerstetter is not alone as U.S. auto industry sales in June are expected to rise as much as 8 percent and reach their strongest monthly pace since before the recession that forced the two U.S. automakers to seek bankruptcy protection in 2009.

In May, U.S. auto sales rose more than expected as construction workers and oil drillers bought more pickups to meet growing demand for their services, a trend major automakers expect to continue through the rest of the year.

Most analysts expect a sales pace in June of between 15.5 million and 15.7 million, the high end of which would mark the strongest number since December 2007. The industry is scheduled to report June sales on Tuesday, supplying an early indicator of the U.S. economy’s health.

“We think housing is a driver, but also domestic energy production and also the general economic health of states like Texas, which is a big pickup truck state,” said Barclays analyst Brian Johnson, who expects an annual sales rate in June of 15.6 million vehicles.

Demand for big pickups is so strong that sales this year will top 2 million for the first time since 2007 if the current pace holds, according to Doug Scott, marketing manager for Ford Motor Co.’s top-selling F-150 truck.

To read the full article click here.

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Jittery Buyers, Political Limbo Slow Auto Sales

August 31, 2012 by · Comments Off on Jittery Buyers, Political Limbo Slow Auto Sales 

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. 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 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.”

To read the entire article click here.




[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Full-Size Truck, SUV Sales Dominate December

January 6, 2012 by · Comments Off on Full-Size Truck, SUV Sales Dominate December 

Americans’ appetite for trucks of all kinds rebounded strongly in December, boosting pickups, vans and SUVs to a combined 54.8% of new vehicle sales.

USA Today reported that the truck trend seems to defy logic: Trucks use a lot of fuel, and gasoline is stubbornly above $3 a gallon.

Trucks, mainly pickups, are “the workhorse of contractors and tradesmen,” and their business appears to be picking up, says Brian Irwin, head of the auto practice at consultant A.T. Kearney.

Even if it isn’t, he notes, recession-hammered businesses and tradesmen put off buying new vehicles so long that “eventually they say, ‘I need to replace that white pickup.’ ”

Two automakers illustrate the point.

Ford Motor, casting itself as a fuel-economy champ emphasizing small cars, nevertheless sold three trucks in December for every car. For all of 2011, the ratio was two trucks for every car. Overall, Ford truck sales were up and car sales were down despite new Fiesta and Focus fuel-sipping small cars.

Honda, likewise known for fuel-efficient small cars, reported that its Fit subcompact was the only car with improved sales in December and that its Insight hybrid hatchback almost disappeared from the December tallies, attracting just 690 buyers, a drop of 57.8%.

At the same time, sales of Honda’s Pilot SUV and Odyssey family van both were strong.

The strength of truck sales mainly was due to pickups and incentives that were more generous than usual. In fact, General Motors sold so many full-size Chevrolet Silverado and GMC Sierras that its pickup inventory — bloated as recently as November — fell below the 200,000 that GM wanted on hand at year’s end.

Chevy Silverado remained the No. 2 seller in the U.S. last year, behind the Ford F-150.

Other truck stars:

• Ford’s new-design Explorer SUV sales were up 37.4% in December and 123.6% for all of 2011.

• Infiniti’s full-size QX, a $60,000 luxury SUV, enjoyed its best sales month in seven years in December.

• Chrysler Group’s Jeep brand seems unstoppable. Sales were up 41% in December as updates and new models continue to attract buyers.


[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Full-Size Pickup, SUV Sales Jump in September

October 3, 2011 by · Comments Off on Full-Size Pickup, SUV Sales Jump in September 

Pickups and SUVs boosted U.S. auto sales in September as dealers offered promotions, gas prices fell and contractors replaced aging fleets of work trucks.

The Associated Press reported that truck sales at General Motors, Chrysler and Ford grew in the double digits, outpacing cars. The September increases built on a healthy performance in August, when new models, cheaper financing and pent-up demand lifted the industry after several disappointing months.

Analysts had expected more Japanese vehicles to fill showrooms after months of shortages related to March’s earthquake and tsunami. But Toyota Motor Corp. and Honda Motor Co., the two automakers hit hardest by the March earthquake, continued to struggle in September. Toyota sales were down 17.5%, while Honda’s fell 8%.

General Motors Co.’s sales rose 20% compared with last September, led by a 34% rise in sales of full-size pickups and SUVs. Chrysler Group LLC’s overall sales rose 27%, including a 45% jump in Ram pickup sales.

At Ford, sales rose just 9% overall, but sales of SUVs rose 35% and pickup sales climbed 15%.

The price of regular gasoline in September dropped nearly 30 cents per gallon from the peak this year of $3.90 in May.

Promotions were especially helpful to vehicle sales in September, according to Jeff Schuster, executive director of global forecasting for J.D. Power and Associates. GM, for example, was offering zero-percent financing and $1,000 cash on the 2011 Chevrolet Silverado 1500 pickup. Sales of the Silverado, one of America’s best-selling vehicles, rose 36%.

Small businesses also needed to buy new trucks.

“There remains an older fleet of commercial-use trucks with small and medium contractors, so some of those could be coming back into the market to take advantage of the current conditions,” Schuster said.


[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

U.S. Auto/Truck Sales Jumped 11% in 2010

January 5, 2011 by · Comments Off on U.S. Auto/Truck Sales Jumped 11% in 2010 

Auto sales rose in the United States last year for the first time since the recession. They’re still far from what they were just a few years ago — but that’s just fine with the downsized auto industry, which can post profits even if they sell millions fewer cars and trucks, The Associated Press has reported.

For the year, car and truck sales came in at 11.6 million, up 11% from last year, automakers reported Tuesday (Jan. 4). For December alone, sales were 1.14 million, also up 11% from a year earlier.

While the figures have some in the industry talking about a return to the glory days, it’s a fragile idea. Rising gas prices or more economic trouble could still shake the confidence of American car-buyers.

But for now, executives are optimistic about this year. General Motors, Ford and Toyota all predict sale will come in at 12.5 million to 13 million for 2011. It will take years, analysts expect, to get back to the peak sales of the middle of last decade — more like 17 million.

“The economic downturn has lasted quite a while,” says Jessica Caldwell, director of pricing and analysis for consumer website “It’s going to be slow and gradual rather than a fast bounceback.”

Toyota was the only company that sold fewer cars and trucks than in 2009. The company was stung by sudden-acceleration recalls in early 2010 and never fully recovered despite luring buyers with generous incentives. Production problems at its San Antonio plant cut its supply of Tundra and Tacoma pickup trucks, and troubles importing the Prius hybrid also hurt sales.

“We’re coming off what was arguably the most challenging time in our 53-year history,” says Don Esmond, senior vice president of Toyota’s U.S. operations. He says he is optimistic that sales will rebound in 2011.

U.S. automakers are relieved to have the past two years behind them. When the financial crisis hit in the fall of 2008, car sales plummeted. GM and Chrysler were on the brink of death, saved by a $60 billion government bailout and speedy bankruptcies that helped both companies close plants and eliminate debt. Ford didn’t declare bankruptcy or take a bailout, but it closed plants, laid off employees and worked to lower its overall cost structure.

As a result, those companies can now make money, even if sales hover below pre-recession levels.

Over the past two years, many Americans, even those who had enough money to buy a car during the recession, had been wary to commit to monthly car payments, so they put off making such a large purchase. Many opted to repair or make do with what they had.

Those buyers are easing back into the market, replacing aging vehicles. The average vehicle on U.S. roads is now 10.2 years old — the most since 1997 and a full year older than in 2007, before the recession, according to the National Automobile Dealers Association (NADA).

“With 240 million vehicles out there on the road, a lot of them are going to be ripe for replacement,” said Ellen Hughes-Cromwick, Ford’s chief economist.

Auto sales peaked in 2005 at 17.4 million and bottomed out at 10.6 million in 2009. The peak was fueled, in part, by big incentives — like the employee-discounts-for-everyone schemes that were popular in the summer of 2005. But those deals may be a thing of the past.

Don Johnson, vice president of U.S. sales for GM, said GM expects sales eventually will creep back up to 15 million or 16 million, but not much higher. Car companies have downsized and they’re producing fewer vehicles, so they don’t have to resort to costly incentives in order to clear out inventory. Also, buyers have been spooked by falling home prices and high unemployment — fears that could have a lasting effect on buying patterns.

Gas prices should go up in 2011, which could change the kinds of cars buyers want. After moving away from large trucks and SUVs when gas prices spiked in the summer of 2008, Americans turned back to bigger wheels in 2010, and SUV and truck sales rose again. Car sales made up 49.8%of sales in 2010, while truck sales made up 50.2%. And trucks and SUV sales keep growing: In December, they made up 54.3% of total sales. That was despite gas prices that topped $3 a gallon.

“Buying behavior doesn’t change dramatically unless gas prices change dramatically,” says Rebecca Lindland, director of automotive research with IHS Automotive. “If they gradually increase, people adjust.”

That’s because Americans love their SUVs, says Jesse Toprak, vice president of industry trends and insight for the automotive website The trend will continue unless gasoline rises above $3.50 per gallon, Toprak predicts.

The figures include only sales made in the United States, and don’t count sales made by U.S. automakers in other parts of the world. Globally, auto sales should hit around 65 million this year.

The U.S. car market is considered the most profitable market in the world, because buyers tend to pay higher prices for vehicles and opt for add-ins that bring up the cost.

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]