News Column

Detroit 3 Post Higher Sales as Industry's Rebound Continues

Dec. 3, 2012

Brent Snavely

2013 Chevy Spark (Photo courtesy of GM)

Chrysler, Ford and General Motors saw their November sales rise by 14%, 6.5% and 3.4% respectively.

Industrywide new vehicle sales are expected to increase 12% from November 2011 as rising consumer confidence and more generous holiday incentives bolstered sales.

Toyota reported a 17% jump in its November sales with sales of its mainstay Corolla compact car increasing 40.3% and sales of its Camry midsize sedan increasing 40.3%.

Chrysler exceeded its year earlier sales for the 32nd consecutive month. Four out of the automaker's five core brands reported a sales increase. In November, sales increased 123% for Fiat, 32% for Dodge, 23% for Ram and 1% for Chrysler while Jeep's sales declined 3%.

"Even with all the talk of a looming fiscal cliff, Chrysler Group is well positioned for a strong sales finish to the year," said Reid Bigland, Chrysler's head of U.S. sales and CEO of the Dodge brand said in a statement. "We are expecting a strong December as the industry continues to recover from the East Coast hurricane and consumers continue to respond to our popular year-end Big Finish event."

Ford's sales were driven by an 18% jump in sales of its F-Series pickup truck to 56,299. Ford also sold 4,848 of its C-Max hybrid compact crossover in its first full month on the market.

"We saw sharp increases in demand for Ford's fuel-efficient small cars, our best-ever month for electrified vehicles and growing demand for our fuel-efficient and capable F-Series pickups," Ken Czubay, Ford's vice president, U.S. marketing, sales and service said in a statement.

GM's 3.4% increase was driven by Buick's 22% rise and Cadillac's 30% surge. The latter reflected strong sales of the new ATS and XTS.

Sales of GM's fullsize pickup trucks, Chevrolet Silverado and GMC Sierra declined 10.1% and 2.0% respectively in November. Redesigned versions of both trucks are due next year.

GM now has a 129 days supply of pickups, a much higher inventory than the 80 to 90 days considered ideal for trucks.

In November, several competitors, including Ram and Nissan, boosted incentives on 2012 model year pickups while GM choose to hold back, GM executives said during a conference call today.

Batey said he was "shocked" when he saw that Ram was offering as much as $5,000 for its 2012 pickups to clear out inventory.

"This is a real test for us and it is a test on whether we are going to remain disciplined," said Alan Batey, GM's interim chief marketing officer and North American vice president of sales. "We definitely gave up some sales and we definitely gave up some (market) share."

Meanwhile, Nissan said its sales increased 12.9% in November and Volkswagen's sales rose 29.3%, largely on the strength of a 75% increase for its Passat mid-size sedan.

Hyundai said its sales increased 8% with sales of its compact Elantra up 28%.

In Washington D.C., the Obama administration and Republicans are locked in negotiations to avert an automatic series of deep spending cuts and large tax hikes that economists and others say could push the economy into a recession.

But at auto dealerships across the U.S., consumers were buying cars in November at what could be the fastest rate in nearly five years, according to TrueCar.com, which estimates that the seasonally adjusted annualized rate of sales increased to 15.2 million in November.

"November was a strong month for new car sales and the impact from hurricane Sandy helped to boost auto sales to its highest since February 2008," Jesse Toprak, senior analyst for TrueCar.com said in a report last week. "We don't expect any major impact on auto sales from the ongoing fiscal cliff discussions."

The industry is benefiting from an increase in consumer confidence and a slowly recovering housing industry. In November, the Conference Board's Consumer Confidence Index increased to 73.7 -- its highest level since February 2008. Over the past few months, consumers have grown increasingly optimistic about the unemployment rate and the job market, the Conference Board said.

Hurricane Sandy, which hit the Northeast at the end of October, affected a region of the country that accounts for about 20% of all new car sales, according to Edmunds.com.

As a result about 30,000 sales were either lost or deferred in October. In addition, 200,000 to 250,000 vehicles were damaged or destroyed by Sandy, of which Edmunds.com estimates 65,000 to 80,000 will be replaced with new cars or trucks.

Also, automakers boosted incentives in November by as much as 20%, according to TrueCar.com.

"The fact that November sales have bounced back from a sluggish October suggests that those who lost cars or who deferred purchases after Hurricane Sandy are already getting back on the road," Edmunds.com Senior Analyst Jessica Caldwell said in a report on Nov. 29. "Fortunately for these buyers, they entered a market in which holiday and year-end deals were in full swing and loan rates hovered near all-time lows."



Source: (c)2012 the Detroit Free Press Distributed by MCT Information Services


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