Tag Archive | "new vehicle sales"

Ford, Honda Discounts Drive Longest Streak of Gains in 10 Years

Ford Motor Co., Honda Motor Co. and Nissan Motor Co. added rebates and discounts to attract buyers over the Memorial Day holiday weekend, driving what may be the longest streak of sales increases in almost 10 years, reported Bloomberg News.

Industrywide deliveries probably reached a seasonally adjusted annual rate of 11.2 million light vehicles in May, according to the average of eight analysts’ estimates compiled by Bloomberg. If sales did exceed the 9.9 million rate from a year earlier, it would mean eight straight months of increases for the first time since a stretch that ended in June 2000, according to Bloomberg Data.

Sales during the Memorial Day weekend in the past three years ran about 40 percent higher than the typical May weekend, and sales on the last day of the month were more than double the average day, according to researcher Edmunds.com.

“This weekend’s activity aligns with the start of the big summer selling season,” said Jim Sanfilippo, chief operating officer of Innocean Worldwide Americas LLC, Hyundai Motor Co.’s in-house advertising agency.

Higher discounts may have been needed to help offset the weak retail environment, said Jeff Schuster, executive director of J.D. Power & Associates in Troy, Michigan. Sales to rental- car companies and discounted fleet purchasers may have also boosted results, scheduled to be announced tomorrow, he said.

Ford added $500 rebates May 27 on the namesake brand’s Focus car, Edge sport-utility vehicle and F-150 pickup, said Robert Parker, a spokesman. The discounts also applied to the automaker’s Lincoln MKS and MKZ sedans and MKT and MKX sport- utilities.

Nissan added a $500 discount for most of its namesake brand vehicles from May 28 through yesterday. Honda’s luxury Acura brand is offering lease deals on all models with no down payment and no security deposit, said Chris Martin, a spokesman. The offer started May 28 and runs through July 6.

The annualized rate of sales in the month may match the 11.2 million pace in April, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Ford’s sales in the month may have gained 10 percent or more, and the industry rate could be in the low 11 million vehicle range, Mark Fields, the company’s president of the Americas, said May 24. The Memorial Day weekend would have an “outsized impact” on May’s total, Fields said.

Ford’s May sales probably rose 16 percent from a year earlier, according to analysts surveyed by Bloomberg. The company’s market share should continue to grow if it performs as expected, Fields said.

Honda’s U.S. sales may have increased 22 percent from last May, according to Edmunds.com, which predicted an 11 percent gain by Nissan and 28 percent growth for Hyundai.

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Boost Expected in May Auto Sales

May auto sales are expected to show a big improvement over last year’s dismal levels, but the recent gyrations on Wall Street appear to have tempered car buyers’ hopes that the U.S. economy was out of the woods, The Detroit News reported.

“There was a lot of extreme volatility in the financial markets in May, which caused consumers to hesitate,” said Jesse Toprak, analyst at the pricing firm TrueCar.com.

He predicts sales will total 1.05 million cars and light trucks, up 13.6 percent from May 2009 when the industry was deep in the doldrums, with uncertainty about the fate of Chrysler LLC and General Motors

But a recent recovery in demand appears to have lost some momentum, Toprak said. He expects the selling pace in May to have slowed to 11 million vehicles, on an annualized basis, from 11.2 million in April and 11.8 million in March.

Other May estimates are higher, but only slightly. Automotive research site Edmunds.com predicts the seasonally adjusted annualized rate (SAAR) of sales will be 11.4 million, while Bank of America — Merrill Lynch’s forecast is for a 11.3 million SAAR. Citigroup’s Citi Investment Research estimates this month’s selling rate at 11.2 million vehicles — level with April.

Still, the comparison with last May will show a dramatic recovery from the treacherous environment in the first half of 2009.

Edmunds estimates double-digit gains for all the major players except for Toyota Motor Corp., which it predicts will show a year-over-year sales increase of only 7.5 percent.

The final result will hinge on the turnout for the traditional Memorial Day sales. Forecasts are calling for fine weather in most regions of the country.

“This month hasn’t been particularly good for the car business so far, but we anticipate that the holiday weekend will more than make up for it,” said Jessica Caldwell, director of industry analysis at Edmunds.

Longer term, demand is expected to recover because the average age of American vehicles is approaching 10 years, which is historically very old. Several surveys suggest that pent-up demand is building, Citi said in a research note.

“Precisely timing the inflection point of the cycle is challenging since vehicle purchasing can be deferred now more than ever — cars last longer, households (are) more saturated — creating an unusually high margin of error,” wrote Citi analyst Itay Michaeli. “The recovery largely becomes a question of when, not if.”

Automakers are responding to the near-term skittishness provoked by the dizzying drops on Wall Street by keeping incentives high.

Toprak estimates incentives this month will average $2,915 per vehicle, up 8.3 percent from April levels and 1.7 percent above year-earlier levels.

“Automakers realize that a lot of consumers are hesitant,” he said. “Demand is still very fragile, and incentives done correctly are still an effective way to get people into showrooms.”

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Memorial Day Weekend Sales Expected to Boost Industry to 11.4M SAAR

SANTA MONICA, Calif. — This month’s new-vehicle sales (including fleet sales) are expected to be 1,080,200 units, a 17.9 percent increase from May 2009 and a 10.8 percent increase from April 2010, according to Edmunds.com.

Edmunds.com analysts predict that May’s seasonally adjusted annualized rate (SAAR) will be 11.4 million, up from 11.2 in April 2010.

May 2010 had 26 selling days, the same as May 2009. The following chart sets forth comparisons for the principal manufacturers between the current month, last month and May 2009.

  Change from May 2009 Change from April 2010
Chrysler 27.7% 5.2%
Ford 22.4% 16.7%
GM 11.7% 15.8%
Honda 22.2% 3.4%
Hyundai 27.5% 8.5%
Nissan 11.3% 17.9%
Toyota 7.5% 4.6%
Industry Total 17.9% 10.8%

“This month hasn’t been particularly good for the car business so far, but we anticipate that the holiday weekend will more than make up for it,” stated Jessica Caldwell, director of industry analysis for Edmunds.com. “In the last three years, Memorial Day weekend car sales averaged about 40 percent higher than the for non-holiday May weekends, and sales on the last day of May were about 130 percent more than the average sales day.”

The combined monthly U.S. market share for Chrysler, Ford and General Motors (GM) domestic nameplates is estimated to be 46.5 percent in May 2010, up from 46.3 percent in May 2009 and up from 45.3 percent in April 2010.

“It should be a great month for the industry, even though Chrysler and Toyota are continuing to pay for past mistakes and Honda is having trouble finding its way,” commented Edmunds.com Senior Analyst Michelle Krebs, who details Honda’s recent troubles in an AutoObserver.com report entitled “What’s Wrong at Honda? Maybe Everything.”

Edmunds.com predicts Chrysler will sell 100,500 units in May 2010, up 27.7 percent compared to May 2009 and up 5.2 percent from April 2010. This would result in a new car market share of 9.3 percent for Chrysler in May 2010, up from 8.6 percent in May 2009 but down from 9.8 percent as in April 2010.

Edmunds.com predicts Ford will sell 189,000 units in May 2010, up 22.4 percent compared to May 2009 and up 16.7 percent from April 2010. This would result in a new car market share of 17.5 percent of new car sales in May 2010 for Ford, up from 16.9 percent in May 2009 and up from 16.6 percent in April 2010.

Edmunds.com predicts GM will sell 212,800 units in May 2010, up 11.7 percent compared to May 2009 and up 15.8 percent from April 2010. GM’s market share is expected to be 19.7 percent of new vehicle sales in May 2010, down from 20.8 percent in May 2009 but up from 18.9 percent in April 2010.

Edmunds.com predicts Honda will sell 117,600 units in May 2010, up 22.2 percent from May 2009 and up 3.4 percent from April 2010. Honda’s market share is expected to be 10.9 percent in May 2010, up from 10.5 percent in May 2009 but down from 11.7 percent in April 2010.

Edmunds.com predicts Hyundai will sell 80,300 units in May 2010, up 27.5 percent from May 2009 and up 8.5 percent from April 2010. Hyundai’s market share is expected to be 7.4 percent in May 2010, up from 6.9 percent in May 2009 but down from 7.6 percent in April 2010.

Edmunds.com predicts Nissan will sell 75,100 units in May 2010, up 11.3 percent from May 2009 and up 17.9 percent from April 2010. Nissan’s market share is expected to be 7.0 percent in May 2010, down from 7.4 percent in May 2009 but up from 6.5 percent in April 2010.

Edmunds.com predicts Toyota will sell 163,900 units in May 2010, up 7.5 percent from May 2009 and up 4.6 percent from April 2010. Toyota’s market share is expected to be 15.2 percent in May 2010, down from 16.6 percent in May 2009 and down from 16.1 percent in April 2010.

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Study Says U.S. Car Sales to Return to Pre-recession Level

DETROIT — U.S. auto sales should reach 11.7 million new vehicles this year and may return to historic levels of near 17 million over the next two years, fueling more profitability for the more cost-efficient car companies and auto-parts makers, according to a new study reported in The Wall Street Journal.

The projection, released by A.T. Kearney Inc., suggests sales could reach 16.8 million in 2012 followed by 17.8 million in 2013 and 18.6 million in 2014 under an “optimistic” forecast.

In April, automakers sold vehicles at an annualized pace of 11.2 million.

A.T. Kearney’s “base-line” forecast calls for 16.1 million sales in 2012, followed by 16.5 million in 2013 and 17.5 million in 2014. It’s “pessimistic” projection suggests 12.9 million sales in 2012 followed two consecutive years of 14.6 million.

A.T. Kearney’s bullish outlook stands in stark contrast to most forecasts, which don’t expect U.S. car sales to cross the 16-million level until 2013.

George Magliano, director of automotive research for HIS Global Insight, said last month it will be “quite some time” before the market returns to more normal levels. The Center for Automotive Research, in Dearborn, Mich., expects auto sales to hit 14.9 million in 2012.

Another car-data firm, Edmunds.com, forecasts 11.5 million sales this year and 14.7 million in 2012.

Daniel Cheng, an A.T. Kearney partner, said the firm’s outlook is based on pent-up demand coming from consumers who have owned their vehicles an average of 10 years.

“Cars last longer but not that long and they have to be replaced,” Cheng said. “We don’t see any transportation alternatives in the near future so people will have to buy new cars.”

Statistics also point to a strong correlation between an increase in loan approvals and auto sales, A.T. Kearney said. In the mid-1980s the loan-approval rate topped out at about 90% and U.S. car sales climbed. The current loan-approval rate, about 75 percent, is positioned to climb as car makers and eventually banks return to providing loans to people with weaker credit ratings, the firm said.

Automakers and parts suppliers used most of 2008 and 2009 to trim costs by shutting plants, laying off workers and shrinking their break-even points. Many companies, especially suppliers, can now post profits even if annual sales in the U.S. are below 11 million vehicles.

Economic uncertainty, however, remains. A collapse of the euro, new terror threats or a trade war all could slow the car-sales recovery, Cheng said.

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U.S. Car Sales Up in April

Boosted by a rebounding economy, U.S. auto sales jumped 20 percent in April as several car makers, including hard-hit Chrysler Group LLC, posted sizable gains, The Wall Street Journal reported.

Automakers sold 982,131 vehicles last month, according to Autodata Corp., up from the depressed level of 819,540 in April a year ago, when the U.S. was sliding deeper into recession and General Motors Co. and Chrysler were heading toward bankruptcy filings.

Chrysler, Ford Motor Co. and Toyota Motor Corp. all reported increases of about 25 percent. GM’s growth was limited to 7.2 percent because it its phasing out four brands under its restructuring, but the four brands it is keeping—Chevrolet, Cadillac, Buick and GMC—saw sales rise 20 percent.

Ford economist Emily Kolinski Morris said the recent growth in U.S. gross domestic product—it rose 3.2 percent in the first quarter—is supporting a recovery in car sales. Ford is forecasting that 2010 sales industrywide will rise to 11.5 million to 12.5 million vehicles, up considerably from last year’s 10.4 million.

Autodata said the annualized sales pace in April was about 11.21 million vehicles, slower than the rate of 11.78 million in March, but a clear step up from the year-ago figure of 9.23 million.

The month-over-month drop in the sales pace reflects the weakening impact of buyer incentives over time, said Jessica Caldwell, an analyst at Edmunds.com, an automotive website. In March, Toyota boosted incentives to halt a sales slide caused by its recalls and quality crisis. Other car makers did the same and a surge of buyers came into the market.

But in April, “there weren’t as many deal-seekers,” Caldwell said. “A lot of the people who were looking for deals have already bought.” April also is income-tax time, which tends to keep some shoppers away, she added.

In April, Ford’s light-vehicle sales rose 24.9 percent to 167,283. The total includes sales of 4,546 vehicles by Volvo, which Ford is in the process of selling.

Ford was boosted by a 42 percent increase in sales of its F-150 pickup trucks, to a total of 40,946 in April. That’s a good sign for the economy—pickup sales are closely tied to the housing industry since the trucks are favorites of contractors and builders.

Toyota’s sales grew at almost the same pace as Ford’s, rising 24.4 percent to 157,439 vehicles from a year earlier. Toyota said it is extending its U.S. incentive program for a third month as it uses zero-percent financing and free maintenance to spark demand. Toyota’s luxury Lexus brand also is offering cheap lease and financing for the first time.

GM sold 183,614 light vehicles, up 7.2 percent, with its four core brands generating almost all of the total. The brands it is phasing out or selling—Pontiac, Saturn, Hummer and Saab—accounted for 906 sales, a huge drop from their year-ago total of 20,010.

Chrysler, meanwhile, finally started keeping pace with the rest of the industry. Its April sales rose 24.8 percent to 95,703 vehicles. In previous month its sales declined or grew at lower rates than other auto makers.

The company declined to say what percentage of sales went to fleet customers such as rental companies. In some past months 40 percent to 50 percent of its sales went to fleets. Fleet sales usually have lower profit margins than sales to individual customers. Most rental cars also eventually come back onto the market as used vehicles, which can undermine prices of new models.

Chrysler’s minivan sales jumped and sales of the Chrysler Sebring and Dodge Avenger, sedans favored by rental fleets, rose three-fold and four-fold, respectively.

Among other makers, Hyundai Motor Co. said its U.S. sales rose 30 percent to 44,023 vehicles, Nissan Motor Co.’s were up 35.1 percent to 63,769, and Honda Motor Co. saw a rise of 12.5 percent, to 113,697.

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Toyota Renews U.S. Offers; Nissan Boosts Sales 35%

Toyota Motor Corp. extended discounts that brought back-to-back U.S. sales increases, and Nissan Motor Co. led the largest Asia-based carmakers’ gains for the second month in a row as auto demand continued recovering in April, Bloomberg reported.

Deliveries for Nissan rose 35 percent from a year earlier, while Toyota yesterday reported a 24 percent advance after continuing no-interest loans and discount leases on most of its namesake brand’s models in April. Honda Motor Co. posted a 13 percent increase and Hyundai Motor Co. sales were up 30 percent.

“Toyota’s incentives pretty much set the pace,” said James Bell, executive market analyst for Kelley Blue Book in Irvine, Calif. “Everybody being up a little bit is tied to the Toyota program — it’s raising the tide for the industry.”

Toyota recalls of more than 8 million autos globally for flaws linked to unintended acceleration and congressional hearings that tainted its image led the world’s largest automaker in March to introduce discounts across its lineup. For now, that strategy will remain in place.

The Tokyo Stock Exchange is closed for a holiday. Hyundai rose 3,500 won, or 2.6 percent, to 138,000 won in Korea Stock Exchange trading. Affiliate Kia Motors Corp., which boosted sales 17 percent, gained 1,150 won, or 4.1 percent, to 28,950 won in Seoul.

U.S. industrywide auto sales rose 20 percent in April to 982,131 cars and light trucks, according to Autodata Corp., a research firm based in Woodcliff Lake, New Jersey. U.S. sales have risen for six consecutive months.

The Asia-based brands boosted their combined U.S. market share to 46.5 percent, a 1 percentage point gain from a year earlier, Autodata said.

General Motors Co., Ford Motor Co. and Chrysler Group LLC, the U.S.-based automakers, held 45 percent, a one-point drop. Sales rose 6.4 percent for GM and 25 percent each for Ford and Chrysler.

Toyota sold 157,439 Toyota, Lexus and Scion vehicles last month, rising from 126,540 a year earlier. The Toyota City, Japan-based company said the increases were led by Corolla small cars, Prius hybrids, Avalon sedans, Highlander and RAV4 sport- utility vehicles, and Sienna minivans.

The automaker, which last month recalled Lexus GX 460 SUVs to adjust stability controls, is expanding production of most models in North America because of rising demand, Carter said.

Nissan reported sales of 63,769 Nissan and Infiniti vehicles, an increase from 47,190. The Yokohama, Japan-based company had the biggest volume increase among Japanese and South Korean automakers in the U.S. this year through April.

Small cars such as the Versa and Sentra posted percentage gains of more than 38 percent, while sales of light trucks including Frontier and Titan pickups and Murano, Rogue, Pathfinder and Armada SUVs were “surprisingly strong,” said Al Castignetti, Nissan’s vice president of U.S. sales.

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