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FEBRUARY AUTO SALES LIFT 2012 OUTLOOK

The U.S. auto industry reported a 16% sales jump in
February. In fact, sales were at their fastest pace in four years.
Automakers sold 1,149,396 cars and light trucks last
month. Quoting Autodata Corp, WSJ.com reports the
annualized pace of sales climbed last
month to 15.1 million vehicles, a level the
industry hasn’t seen since February 2008.
Chrysler led the way as sales rose
40% in February to 133,521 vehicles.
Chrysler company truck sales rose 21%
from a year earlier, while car sales more
than doubled.
Despite rising gas prices, Ford trucks
sustained the biggest increase, up 20.6%
from February 2011. Fuel-efficient Ecoboost
engines made up 43% of F-150’s sold to
individual customers. And after several months of year-overyear declines, sales of the Ford Focus more than doubled.
Ford’s Lincoln division recorded a 16% increase.
Meanwhi le, General Motors sales were up 1%.
Chevrolet’s 5.8% gain powered the overall increase, led
by a 10.1% gain from the Cruze compact, a 38.6% increase
from the Suburban SUV and a 30.7% gain for the Express
full-size van. But GM also posted declines in the Buick
and Cadillac divisions.
Toyota and Honda each posted 12% increases as they
continued to rebound from the earthquake in Japan last
March. It was Honda’s first double-digit gain since April and
Toyota’s first since February 2011.
Hyundai Motor Company announced all-time record
February sales of 51,151 units, up 18% versus 2011.
Sonata, Elantra and Accent total sales increases were 11
percent, 12 percent and 29 percent, respectively. Fleet sales
remain at a low eight percent as the focus remains on retail
customers.
Kia also had the brand’s best ever February sales , up
37.3% over the same period in 2011. Kia continues to be
one of the fastest growing car companies in the U.S., and
the February sales total marks the brand’s 18th straight
monthly sales record.
BMW Group, Jaguar Land Rover, Mazda and VW
were among companies with gains of 30% or more.
Mitsubishi was the only other automaker to record a decline
(-31%) in sales.

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U.S. auto sales jumped 11 percent in January, led by huge gains at Chrysler Group and Volkswagen of America. Best January since 2008

U.S. auto sales jumped 11 percent in January, led by huge gains at Chrysler Group and Volkswagen of America.Automakers sold 913,284 light vehicles for the month, the best January since 2008. The seasonally adjusted annual selling rate was 14.2 million, which matches the cash-for-clunkers selling rate of August 2009.

Toyota Division General Manager Bob Carter said January had “a very healthy” sales pace.

“It’s significant to see 913,000 in January when much of the country typically is in a deep freeze,” he said. “We’re bullish with where the industry is going.”

Most major companies gain

Among the highlights:

— All major players posted sales gains except General Motors, which fell 6 percent from a strong January 2011 that had been buoyed by strong incentives.

— All four GM brands lost ground: Chevrolet was down 1 percent, GMC lost 10 percent, Buick 23 percent and Cadillac 29 percent.

— Chrysler Group volume jumped 44 percent to 101,149 units. The growth was led by Chrysler brand, up 81 percent.

— Hyundai-Kia Automotive gained 20 percent overall: Kia rose 28 percent and Hyundai 15 percent.

— Nissan North America sales increased 10 percent, just under the industry average overall. But after being passed by Hyundai-Kia for the No. 6 U.S. sales position, Nissan’s 79,313 light-vehicle sales gave it a 1,102-unit lead over its South Korean rival to start the year.

— American Honda gained 9 percent in January, its first year-over-year increase since April and a sign that its restocking efforts since the March earthquake and tsunami in Japan and flooding later in the year in Thailand are working.

— Toyota Motor Sales, which also had been slammed by the natural disasters last year, boosted sales 8 percent to 124,540 units. Toyota brand rose 9 percent, offsetting a 5 percent decline at Lexus.

— Ford Motor Co. increased sales 7 percent in January, with Ford division up 8 percent and Lincoln down 8 percent.

Mazda, Subaru sales rise

— Among the smaller players, Volkswagen Group sales soared 40 percent to 36,681 units, led by a 48 percent increase for the VW brand and 20 percent higher sales at Audi.

— Mazda posted an even bigger gain, up 68 percent to 23,996 vehicles.

— Subaru volume rose 21 percent, its second month of growth after a seven-month stretch of declines as it struggled to restock U.S. dealer lots after the natural disasters of last year.

— Daimler AG gained 23 percent, with 23 percent growth at Mercedes-Benz and 39 percent at Smart.

— BMW group sales rose 6 percent overall, with a 21 percent increase at Mini pumping up a more modest 3 percent gain at BMW brand.

— Other European premium brands posted increases: 31 percent for Jaguar Land Rover, 6 percent for Porsche and 4 percent for Volvo.

— Only two small Japanese automakers posted sales declines in January. Mitsubishi’s volume fell 18 percent while Suzuki tumbled 41 percent to 1,505 units.

Odds and ends

— Tough sledding for luxury: A few luxury brands outperformed the industry’s 11 percent rise in January. Land Rover jumped 41 percent, Mercedes-Benz gained 23 percent and Audi 20 percent. But Jaguar, Porsche, Acura and BMW eked out modest unit increases below the industry average. And Lexus fell 5 percent, Lincoln and Infiniti each lost 8 percent, and Cadillac tumbled 29 percent.

— The industry’s shift to greater North American production continues. U.S. sales of vehicles made in the United States, Canada and Mexico were 77.9 percent of total industry volume, up from 76.7 percent last January.

— Oddity: Audi outsold Cadillac in January, 9,354 units to 8,924. Until Cadillac can get its new XTS and ATS sedans into showrooms, it is limited to essentially three models: the CTS sedan and SRX and Escalade SUVs.

— Best-seller surprises: Compared to the 10 best-selling nameplates for 2011, January’s top 10 list has three new names. The Honda Accord and Ford Fusion dropped out, but Honda added the Civic and CR-V. And the Chevrolet Cruze got bumped by its big brother, the Chevy Impala.

— Guess who’s No. 2? One other Top 10 shakeup: The new-generation Toyota Camry, introduced in September, outsold the Chevy Silverado pickup, ousting it from its perennial No. 2 sales position behind the Ford F-series.

— Trucks bucked: January also changed the list of 2011 best-selling trucks. Out: 2011’s No. 7 GMC Sierra and No. 10 Kia Sorento. In: the Jeep Grand Cherokee at No. 7 and Nissan Rogue at No. 9.

— Cars rule in January: Cars outsold light trucks last month, 474,449 to 438,835, a 51.9/49.1 split. A year ago trucks ruled, 413,962 to 405,924, a 50.5/49.5 split.

Watch those comparables

It’s time to readjust expectations based on the most common industry sales measurement: comparing sales to performance the year before.

— Hyundai-Kia and Chrysler are coming off 2011 performances up more than a quarter, so it will take huge months for them to move the needle much this year.

— Both Toyota group and American Honda sales fell 7 percent in 2011, so posting even modest increases will look good this year.

— Sales comparisons also will be easier for Ford and GM this year because the drag of those dead or sold brands has washed out of year-ago numbers. For GM, no more year-ago sales of Pontiac, Saturn, Hummer or Saab models. Ford has no Volvos and only a wisp of Mercury sales on the 2011 blotter.

U.S. auto industry recovering faster than anticipated; Automakers headed toward best annual performance in three years

The U.S. auto industry is seeing demand recover faster than anticipated, with carmakers headed toward their best annual performance in three years at sales of 12.8 million vehicles.

Consumers entered this year’s final month demanding models ranging from big pickups to luxury sedans to fuel-sipping hybrids after pushing November’s sales to the fastest monthly pace since the government’s “cash for clunkers” trade-in program in August 2009. General Motors Co. (GM) and Chrysler Group LLC, two years removed from bankruptcy, have been taking share from disaster-stricken Toyota Motor Corp. and Honda Motor Co.

U.S. buyers are replacing their cars after delaying new- vehicle purchases as long as possible, and they are snapping up F-Series pickups and Prius hybrids as consumer confidence in the economy jumps. That means the automakers haven’t had to resort to fire-sale prices to goose demand.

“The industry has managed production levels to where demand was this year and didn’t get ahead of itself,” said Jeff Schuster, a Troy, Michigan-based analyst for LMC Automotive. “With inventory now being replenished, it’s not a situation where we’re seeing too much production or seeing heavy incentive use.”

Spending on marketing promotions averaged less than $2,700 a vehicle throughout the industry, down about $74 from a year ago, according to LMC and J.D. Power & Associates.

Consumer confidence surged in November by the most in more than eight years, and the portion of consumers planning to buy a new vehicle within six months climbed to the highest since April, data from The Conference Board showed Nov. 29.

The average age of cars and light trucks on the road today has risen to 10.6 years old, Jenny Lin, Ford’s senior U.S. economist, said on a Dec. 1 conference call.

“We are going to see more and more of this pent-up demand realized,” Lin told analysts and reporters.

She cited declining gasoline prices for providing “relief” to consumers, who responded with purchases of sport- utility vehicles and pickups. Sales of Dearborn, Michigan-based Ford’s SUVs climbed 29 percent and F-Series trucks increased 24 percent.

GM’s deliveries of Chevrolet Silverado and GMC Sierra pickups surged 34 percent and 22 percent, respectively, and Chrysler’s Jeep brand sales soared 50 percent. The average price for unleaded gasoline has dropped 71 cents, or 18 percent, to $3.28 a gallon on Dec. 3 from its peak this year on May 4, according to AAA, the nation’s largest motoring group.

Consumer demand was broad-based, as Toyota (7203) and Honda boosted deliveries of smaller vehicles, making up for production lost after March 11’s tsunami and earthquake inJapan and more recent floods in Thailand disrupted their supply chains.

Toyota, Asia’s largest automaker, reported a 49 percent increase in sales of Prius hybrid models, including its new wagon variant. Deliveries of its redesigned Camry sedan climbed 13 percent to 23,440, securing its position as the top-selling car line ahead of Nissan Motor Co.’s Altima and the Ford Fusion. Toyota slashed discounts on cars by 32 percent last month, according to researcher Autodata Corp.

Honda, the only automaker among the 10 largest that didn’t have a companywide U.S. sales increase for November, still managed to boost deliveries of Civic cars by 3.4 percent. That’s the first increase since April for the Tokyo-based automaker’s top-selling model.

Among luxury brands, Daimler AG (DAI)’s November deliveries jumped 47 percent, as the brand’s year-to-date sales closed to within 1,600 of Bayerische Motoren Werke AG (BMW)’s BMW line. The two German brands are vying to replace Toyota’s Lexus, the annual luxury champ for the last 11 years, which also lost production to the March disasters.

Industry sales accelerated to a 13.6 million seasonally adjusted annualized rate, according toWoodcliff Lake, New Jersey-based Autodata. The pace exceeded the 13.4 million average estimate of 14 analysts surveyed by Bloomberg.

“The recovery is showing a little bit more resiliency than what people feared,” Paul Ballew, chief economist for Nationwide Mutual Insurance Co., said in a Dec. 1 phone interview. “Vehicle sales are inching their way back up to 14-, and then eventually 15- and 16-million units.”

If December matches November’s 14 percent increase in industrywide deliveries, auto sales will finish the year at 12.8 million cars and light trucks. That would exceed the 12.7 million sales total that was the average estimate of 18 analysts surveyed by Bloomberg in August.

Jefferies Inc., IHS Automotive and TrueCar.com are now considering increases to their estimates for 2012 deliveries, according to analysts at the three firms.

Auto sales may total 13.5 million light vehicles next year, the average of 14 estimates compiled by Bloomberg. The industry delivered 11.6 million cars and light trucks last year, up from a 27-year low of 10.4 million in 2009.

The seasonally adjusted annualized rate for auto sales “appears to be building to a 2011 exit run-rate close to 14 million without a full Japanese supply recovery and bad economic news cycle,” Adam Jonas, a New York-based analyst for Morgan Stanley, wrote in a Dec. 1 research note. The momentum “bodes well for 2012,” he said.

Edmunds.com: Car Buyers Lean Towards Gas Sippers, Compact Demand Way Up, Incentives Way Down

Though gas prices continue to fall and are estimated to drop even more in the next few months through year-end, Edmunds.com data released Tuesday reflects that consumers are still more likely to purchase smaller gas sippers than take on an SUV or truck.

According to the company’s analysis, shoppers are still leaning towards compact or subcompact cars as a result of higher than average gas prices. High gasoline prices have caused a realignment of buyer priorities and almost unprecedented demand for small cars, just in time for the launch of a stable of tech- and content-rich new models,” explained Edmunds’ AutoObserver.com senior editor Bill Visnic.

Besides economic factors, Edmunds.com reports that increasing options in the small car segment are also driving consumer interest.

“More options in the small car segment are drawing in more consumers,” stated Edmunds.com analyst Jeremy Acevedo.

“The Chevy Cruze, Fiat 500, Ford Focus and Hyundai Elantra are among the small cars that are stimulating interest,” he added.

Though more options and new 2012 small-car models are becomings increasingly attractive to consumers, the bad news is “as demand goes up, inventory and incentives fall,” company officials noted.

According to Edmunds.com’s True Cost of Incentives data, the national average incentive for the compact car in August was $864, down 63 percent from $2,318 in August 2010.

Moreover, subcompact car incentives in August averaged $520 per vehicle sold, down 57 percent from $1,211 in August 2010.

However, if consumers are willing to delve into less popular segments, such as mid-range luxury cars, they may find better savings packages. Edmunds.com data reports that the national average True Cost of Incentives for this segment came in at $4,228 in August 2011.

Breaking the trend seen throughout August down further, for cities, Atlanta saw the highest rate of increase in compact car shopping as it rose 41 percent from 2010.  Subcompact car shopping also increased by 35 percent year-over-year in Georgia’s capital city. 

Boston followed close behind, with August compact car shopping rising by 28 percent versus 2010, and the rate of subcompact car shopping in rose a significant 59 percent year-over-year.

Edmunds.com listed the rate of increase in compact and subcompact car shopping across the country’s metropolitan areas, as follows:

 

Market Increase in compact car shopping vs. 2010 Increase in subcompact car shopping vs. 2010
Atlanta 41% 35%
Boston 28% 59%
Chicago 43% 43%
Dallas-Fort Worth 44% 70%

Houston

48% 44%
Los Angeles 37% 58%
New York 38% 60%
Philadelphia 34% 53%
San Francisco 25% 44%
Washington, DC 41% 47%

Compact Cars Become more Profitable

Also of note, as the compact and subcompact segments continue to gain popularity, they are also becoming more profitable for dealers and OEMs, AutoObserver.com’s Visnic reported.

For example, Hyundai Motor America’s  chief executive officer John Krafcik recently noted at a media event the new Elantra is selling for an average of $4,000 more than the previous-generation model.

Moreover, AutoObserver.com reported that Don Johnson, General Motors vice president of U.S. sales, pegged the rise in the new Chevrolet Cruze’s average transaction price at $4,000 more than the Cobalt that preceded it.

“Auto-company executives wishing for increased small-car supply in the U.S. happens about as frequently as an appearance of Hailey’s comet, but with prices reaching new highs and almost no incentives required, compact cars are the auto companies’ new BFFs,” Visnic explained. 

AUGUST U.S. AUTO SALES: GM, Ford, Chrysler post double-digit U.S. sales gains

DETROIT — The Detroit 3 posted double-digit U.S. sales gains in August in the face of forecasts that industry demand would cool.

General Motors had an 18 percent gain and Ford Motor Co. was up 11 percent — their biggest jumps since April. Chrysler Group, with a 28 percent rise, now has had increases of 20 percent or more in six of the year’s first eight months.

Volkswagen brand was up 10 percent and Nissan North America rose 19 percent, despite a drop at Infiniti.

American Honda and Toyota Motor Sales, which have dragged down the industry since May because of vehicle shortages stemming from the March earthquake in Japan, have yet to report. Subaru, which has also been crimped by tight supplies, posted a 6 percent decline, its fourth straight monthly drop.

Analysts said August, like the past few months, would fall short of the sales pace set at the start of the year. They cited a decline in consumer confidence and dimming prospects for strong economic growth. And Hurricane Irene paralyzed most of the Eastern seaboard last weekend, leaving flooding and power outages in its wake.

‘Pent-up demand’

“There is still a lot of pent-up demand,” said Don Johnson, GM’s vice president of U.S. sales operations, in a conference call today. “Consumers are being cautious, but they are not out of the market. We think that will continue the rest of the year.”

GMC led GM brands with a 41 percent jump over August 2010. Chevrolet rose 16 percent and Buick was up 12 percent. Cadillac was up 4 percent after three consecutive monthly declines.

GM said the Chevrolet Cruze topped 20,000 sales for the fifth straight month. The new entry was helped by lingering shortages of small cars at Toyota and Honda.

Chrysler continued to benefit from the performance of its Jeep brand, which was up 58 percent in August and is up 50 percent for the year. Chrysler ran a no-payments-for-90-days promotion for some buyers of 2011 and 2012 Chrysler, Jeep, Dodge and Ram models during the month.

Ford-brand sales rose 16 percent. Lincoln, up 25 percent, rose for the third straight month following six straight months of decline.

Prior to today’s reports, August sales were projected to run at a 12.1 million seasonally adjusted annual rate, according to the average estimate of 14 analysts surveyed by Bloomberg. The pace averaged above 13 million through April of this year and dropped below 12 million in May and June before rising to 12.2 million in July.

“With the economic woes, summer vacations and Hurricane Irene taking center stage, August may be a lost month for vehicle sales,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, in a statement yesterday.

J.D. Power’s SAAR forecast for July was 11.9 million units, saying demand dropped sharply in the second half of the month as consumers waited for bargains and bad weather took over.

Toyota looks to regain momentum with new redesigned 2012 Camry

 Toyota showed off its all-new Camry on Tuesday, aiming to recover lost sales momentum with price cuts and a high-powered ad campaign for its flagship sedan that remains America’s best-selling car.

Sales of the Camry are down 8 percent this year but it is still No. 1 in the United States despite market-share gains by mid-size rivals the Nissan Altima, Ford Fusion, Chevrolet Malibu and Hyundai Sonata.

Losing sales this year has been the Honda Accord, which has fallen to No. 4 among mid-size cars from its No. 2 position in 2010.

The launch of the new Camry comes at a time when Toyota is struggling to shake free of the damage from costly safety recalls and the more recent problems caused by production shortages after the March earthquake. The Japanese automaker has seized on the redesigned Camry as a symbol for its own return as a force in the U.S. market.

Toyota unveiled the 2012 Camry with unusual fanfare at events staged in Detroit, Los Angeles and New York that featured a live video link from a plant in Kentucky where President Akio Toyoda drove the first production vehicle off the assembly line.

Camry’s U.S. sales peaked in 2007, as Toyota extended a lead over GM in global auto sales. That was also the first year of the current generation of Camry.Some 15 million Camrys have been sold worldwide since it debuted in the U.S. market in 1983. It has been the top-selling car in the U.S. market for nine years running and 13 of the last 14 years according to Toyota.

Overall, U.S. Toyota sales fell 7 percent through July for the No. 3 spot behind GM and Ford. Most of its competitors gained, led by Hyundai with a sales increase of 23 percent.

The Camry’s reputation for worry-free reliability made it a favorite of a generation of American consumers now entering or already in their retirement years. The average age of the U.S. Camry buyer is 60, which the automaker hopes to lower with the 2012 model, the sedan’s seventh generation.

The mainline gasoline-powered sedans will begin showing up at U.S. dealers in early October, ahead of an October 17 launch of an advertising campaign that will climax during the early 2012 Super Bowl broadcast, said Carter.

Hybrid versions of the Camry will be at U.S. dealerships by December.

Among competitors, the new Chevrolet Malibu goes on sale in early 2012 followed later in 2012 by new versions of Honda’s Accord and Nissan’s Altima.

Earlier this month, General Motors said it expected Toyota and major Japanese automakers to be “back with a vengeance” in the U.S. auto market as they are able to recover from the March earthquake. A sign of that may be the pricing of the 2012 Camry lineup. Of the six versions of the Camry, five will have lower prices than their 2011 counterparts, which Toyota executives say is partly because of the intense competition in the mid-size sedan market.

While Camry prices are lower, fuel economy ratings are higher, led by the Camry Hybrid LE, the lower-priced of two hybrid offerings. It will get a combined city and highway average of 41 miles per gallon. The four-cylinder gasoline models will get a combined 28 mpg.

Motor Industry Still Feeling Effects from Japan Tsunami

Toyota Motor Corp. and Honda Motor Co. are speeding returns to normal production after the March 11 earthquake and tsunami idled factories and created shortages of parts. The slowdown in May sales came about because limited supply of fuel-efficient cars like Toyota’s Prius lifted prices and curbed purchases.

“Consumers were being told so dramatically after Japan that there’s going to be a shortage of cars, but this is going to be a temporary situation and so many of them will just wait,” said Alan Baum, principal of industry consultant Baum & Associates, who predicts 13 million auto sales in the U.S. for 2011. “To the extent May is a reasonably poor month, I’m not going to get carried away and say that’s going to transcend through the rest of the year.”

U.S. sales of cars and light trucks may rise to 13 million this year, the average of 16 analysts’ estimates compiled by Bloomberg. That would be the most since 13.2 million in 2008.

Average U.S. gasoline prices dropped for 14 straight days since May 11 to $3.80 a gallon for regular unleaded, according to AAA. Prices earlier in May were at the highest level since 2008, reducing demand as the country’s vacation season started.

The earthquake in Japan may result in 3 million to 3.5 million units of global production that will be lost or deferred into next year, according to researcher IHS Automotive. Worldwide light-vehicle production may rise to 73.7 million units this year from 71.9 million in 2010, according to IHS.

Toyota, which built 45 percent of its cars in Japan last year, may lead declines among major automakers with a 27 percent drop in May deliveries, the average of three estimates. Honda Motor Co., the second-largest Japanese automaker by U.S. sales, may say sales fell 25 percent, the average of three estimates. Nissan Motor Co. deliveries may decrease 7.3 percent, the average of three estimates.

“Predominantly this is a supply issue,” George Magliano, a New York-based senior economist for IHS Automotive, said in a telephone interview. “The auto market was developing considerable momentum coming into this month before issues related to Japan.”

Automakers benefiting from their Japan-based rivals’ supply constraints may be led by Hyundai Motor Co. and Kia Motors Corp. Their combined U.S. sales may pass Toyota for the first time, according to Santa Monica, California-based TrueCar.com. Deliveries for Hyundai and Kia may surge 43 percent in May to 115,434, behind only General Motors Co. and Ford Motor Co., according to the auto pricing website.

Toyota, the world’s largest automaker, has said it expects production in North America to return to about 70 percent of normal levels beginning in June, from about 30 percent in May. Honda forecast last week that North American production will return to 100 percent in August for all models except Civic small cars, and said May 17 that global production will return to normal before the end of the year.