Tag Archive | "new vehicle sales"

KBB Sees Auto Sales Pacing at 13.8 Million SAAR


IRVINE — Kelley Blue Book (KBB) said yesterday that it expects new-vehicle sales to surpass 1.05 million units this month, which means the industry would be pacing at a 13.8 million seasonally adjusted annualized rate (SAAR) — a 6.4 percent improvement from the year-ago period.

Bolstering the vehicle information site’s outlook are increased inventory levels, improved access to credit, attractive finance offers available to consumers and one additional selling day due to the leap year, officials said. New-vehicle sales have remained above 13.6 million SAAR since November 2011, but KBB said that it believes the annualized sales pace will slow after April, as pent-up demand is satisfied from Toyota and Honda’s inventory shortfalls.

“From a pure volume perspective, in the months ahead sales will continue to exceed last year’s figures, but there may be more volatility this year from month to month than in 2011,” said Alec Gutierrez, senior market analyst of automotive insights for KBB. “Sales were remarkably flat from May through November 2011, due to the production woes faced by Toyota and Honda. Now that they are producing vehicles at full capacity, a return to traditional seasonal patterns is likely through 2012.”

Consumers shopping in February and March will find an improved selection of vehicles available as a result of increased production in January, according to KBB. Manufacturers ramped up production in anticipation of President’s Day sales promotions and the onset of the spring selling season beginning in March.

As of Feb. 1, there were nearly 2.5 million vehicles available for sale on dealer lots — equivalent to a 66 days’ supply of vehicles overall, an improvement from the 52 days’ supply of vehicles available as of Jan. 1. The most significant inventory gains came from General Motors, Ford and Chrysler, each with greater than 80 days’ supply of vehicles available for consumers.

Touting a 50 days’ supply are Toyota, Honda and Nissan, while Hyundai and Kia only have a 30 days’ supply of vehicles overall, according to KBB. In the next month, car shoppers are expected to be able to negotiate savings by focusing on domestic vehicles, given the abundant supply currently available for sale. According to Autodata, domestic manufacturers spent more than $1,000 per unit more on incentives in January compared to their Japanese and Korean counterparts, a trend KBB expects will continue in February.

In terms of year-over-year growth, KBB said that it projects subcompacts to lead all other segments, especially with fuel prices surpassing $3.50 per gallon nationally.

“Although traditionally viewed as a budget segment reserved for those consumers willing to accept fewer amenities, cheaper materials and less than an awe-inspiring driving experience, today’s subcompacts compare favorably to many compacts or mid-size sedans,” said Gutierrez. “The Nissan Versa, Chevrolet Sonic, Ford Fiesta, Hyundai Accent, Honda Fit and Toyota Yaris all are excellent examples of either all-new or redesigned products that many consumers would be happy to call their own.”

The mid-size category was a strong performer in January, and KBB said that it anticipates February will be another solid month for the Camry-led segment. The Toyota Camry topped sales gains in January on the strength of its 2012 redesign.

Rising fuel prices and a slow economic recovery both stand as potential road blocks to continued improvements in new-vehicle sales, KBB noted. Oil prices closed at a nine-month high of nearly $105 on Feb. 20, while fuel prices have continued to climb for the past 60 days. Gas prices are up nearly 40 cents per gallon year-over-year and have increased steadily since late December. Although fuel prices remain high, current projections by the Energy Information Administration (EIA) place average fuel prices in 2012 only slightly above the highs experienced in 2011.

If conflict in Iran is avoidable, KBB said that it is hopeful that fuel prices will remain below the $4 highs of last year. In the worst case scenario, high fuel prices could slow the pace of the economic recovery and vehicle sales along with it.

The pace of the U.S. economic recovery remains very slow, and according to a recent forecast published by the Congressional Budget Office (CBO), the United States can expect much of the same through at least 2013. According to CBO estimates, the official unemployment rate, currently at 8.3 percent, will increase to 9.2 percent by the fourth quarter of 2013. In terms of overall economic output, Gross Domestic Product (GDP) is expected to show an annual increase of 2.2 percent in 2012, while 2013 will bring an even smaller 1.1 percent gain in GDP overall. Given the expectations for weak economic growth during the next several years, KBB said that it expects the pace of the new-vehicle sales recovery to slow.

Chrysler and Volkswagen Expected to Dominate Sales Gains in February

 

Sales Volume

Market Share

Manufacturer

Feb-12

Feb-11

YOY%

Feb-12

Feb-11

General Motors

195,000

207,028

-5.8%

18.5%

20.8%

Ford Motor Company

165,000

156,232

5.6%

15.6%

15.7%

Toyota Motor Corp.

147,000

141,846

3.6%

13.9%

14.3%

Chrysler Group

119,000

95,102

25.1%

11.3%

9.6%

American Honda

100,000

98,059

2.0%

9.5%

9.9%

Nissan North America

93,000

92,370

0.7%

8.8%

9.3%

Hyundai-Kia

88,000

76,339

15.3%

8.3%

7.7%

Volkswagen

40,000

29,315

36.4%

3.8%

3.0%

Total

1,056,000* 

993,535

6.3%

*Includes projections for manufacturers not shown

 

 

 


Subcompact Cars to Lead Sales Gains in February

 

Sales Volume

Market Share

Segment

Feb-12

Feb-11

YOY%

Feb-12

Mid-Size Cars

188,000

172,081

9.3%

17.8%

Compact Car

148,000

146,282

1.2%

14.0%

Compact Crossover

121,000

113,556

6.6%

11.5%

Full-Size Pickup Truck

118,000

109,677

7.6%

11.2%

Subcompact Car

63,000

48,714

29.3%

6.0%

Total

1,056,000* 

993,535

6.3%

*Includes projections for segments not shown

 

 

 

 

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Global Sales to Reach 77.7 Million Units in 2012, Polk Predicts


SOUTHFIELD — Polk announced it expects worldwide new-vehicle sales in 2012 to rise 6.7 percent over 2011 volumes to 77.7 million vehicles. The automotive market intelligence firm’s analysts believe the global economy will weather the current European sovereign debt crisis and consumers will return to showrooms this year.

The U.S. market will experience single-digit growth, primarily due to strong sales in 2011 and the effects of the weak economy that will continue to impact new-vehicle demand through most of 2012, according to Polk. Light-vehicle sales are expected to grow at a moderate pace — with a 7.3 percent increase in the region this year — to 13.7 million vehicles. Polk analysts do not expect the U.S. market to achieve pre-recession levels of greater than 16 million vehicles per year until 2015. They do, however, expect the luxury to be the fastest growing segment next year, predicting that it will grow by 14 percent, reported F&I and Showroom magazine.

“More affluent buyers are returning to the market for new vehicles after three years of spending reductions,” said Anthony Pratt, director of forecasting for the Americas at Polk. “The luxury segment also offers a wide variety of product options for consumers across all segments, ranging from small cars to SUVs.”

Leasing penetration will continue to be higher in the luxury segment in the U.S. and will continue to lift transactions in all segments. In 2011 leasing penetration reached pre-crisis levels (through October) of 41.5 percent for the luxury segment and 17.1 percent for the overall U.S. industry. This trend will likely continue through 2012, said analysts, as automakers will attempt to win back consumers with promotions touting attractive monthly payments.

China is expected to make the largest contribution to global sales growth for new vehicles with an anticipated 16 percent increase over 2011, according to Polk. The company’s analysts anticipate much of this growth to occur outside of Shanghai and Beijing.

European sales are expected to be flat or down slightly to just over 19 million units. “Austerity plans will prevent governments in Europe from boosting 2012 sales through scrappage programs and other incentives offered in previous years,” wrote Polk analysts.

Growth in Brazil, Russia, India and China will outpace many mature markets over the next few years. Polk expects Brazil to surpass Germany as 2011 sales results are finalized, and new-vehicle sales in India are expected to surpass those sold in Germany in 2014. Sales growth in Russia will likely be flat in 2012, but Polk anticipates sales in Russia to outpace Germany by the year 2015.

Polk predicts Toyota and Honda will realize the greatest amount of market share growth in 2012, as both begin to win back some lost share from their 2011 inventory shortages following natural disasters in Japan and Thailand. “They will likely struggle to regain all of their lost share, however, as they will experience strong competition from other automakers offering vehicles equipped with more fuel-efficient options and increased infotainment features,” analysts wrote.

Volkswagen will continue to win U.S. market share in 2012, approaching the 3 percent range, as the Beetle launch will build on the successful Passat and Jetta models, according to Polk.

Although Hyundai and Kia sales volumes continue to increase year over year, Polk expects their market share growth to be flat in 2012, as the companies face increased competition in all segments. General Motors, Ford and Chrysler will continue to grow in 2012 as the industry continues to recover. Refreshed products and new product introductions will help them to compete in various segments.

Polk’s complete light vehicle sales forecast (including passenger cars, light trucks and light commercial vehicles) through 2016 is as follows:

 

2012

2013

2014

2015

2016

Global

77.7

83.4

88.1

92.2

96.3

Europe

19.0

20.3

21.5

22.7

23.7

United States

13.7

14.9

15.6

16.0

16.3

Brazil

3.6

3.8

3.9

4.1

4.3

China

17.9

19.4

20.6

22.0

23.6

Japan

4.5

4.8

4.9

4.8

4.8

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New-Vehicle Sales Pacing at Three-Year High in November


WESTLAKE VILLAGE — New-vehicle retail sales are experiencing further recovery and strength through the first half of November, according to a monthly sales forecast developed by J.D. Power and Associates Power Information Network (PIN) and LMC Automotive.

November new-vehicle retail sales are projected to come in at 791,900 units, representing a seasonally adjusted annualized rate (SAAR) of 11.3 million units — the highest monthly selling rate in three and a half years, according to the report.

“Retail light-vehicle sales in November are outperforming expectations on a month-to-date basis, providing good news as 2011 comes to a close and the focus starts to shift to 2012,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. “The improving performance of the past three months suggests that the current momentum, primarily driven by replacement demand and improvements in vehicle availability, is not an aberration.”

Total light-vehicle sales in November are expected to come in at 975,600 units, an 8 percent increase year over year, according to the report. Fleet sales are expected to decrease by 6 percent compared with November 2010, but will account for 19 percent of total sales, according to F&I and Showroom magazine.

After a solid October and expectations for a strong November, LMC Automotive is increasing its forecast for 2011 to 12.7 million units (from 12.6 million units) for total light-vehicle sales and to 10.3 million units (from 10.2 million units) for retail light-vehicle sales. Additionally, LMC Automotive is maintaining its forecast for 2012 at 13.8 million units for total light-vehicle sales and 11.2 million units for retail light-vehicle sales.

“The upward forecast revision to 2011 represents the first increase to the forecast all year and tempers the cloud of uncertainty that has been over the automotive market for several months,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “The current recovery pace appears sustainable into 2012. As long as there is not an external shock or economic setback, the selling rate could be stable above the 14 million-unit level during the second half of 2012.”

Light-vehicle production volume in North America has increased by 920,000 units, or 9 percent through the first 10 months of 2011 compared with the same period in 2010, according to LMC Automotive. The Detroit 3 OEMs are seeing nearly a 14 percent increase in year-to-date production through October, while European OEMs are up 38 percent.

Hyundai Group production is up 48 percent after increased production of existing models and additional localization of models in 2011, according to the report. Japanese manufacturers, as a group, posted an 8 percent decline year to date in October from the same period in 2010, which can be attributed the Japan earthquake disaster and flooding in Thailand.

The impact of the flooding is expected to continue through the fourth quarter, causing further downtime to their North American operations. Toyota is recovering faster than initially anticipated, with lost volume estimated to be 5,000 units in the fourth quarter. The impact to Honda is expected to be more severe due to the location of their Thai plants. Honda’s fourth-quarter loss in North America is estimated at 35,000 units.

Overall vehicle inventory improved to a 58-day supply at the beginning of November from 50 days at the beginning of October. Car inventory improved to a 53-day supply, up from 43 days in October, while truck levels are stable with a 62-day supply.

Several manufacturers continue to remain below the industry norm of a 60-day supply: Hyundai/Kia began November with 28 days’ supply, Honda was at 37 days’ supply and BMW was at 28 days’ supply, according to the report. Despite some setbacks, the 2011 North American production outlook remains on track for 12.9 million units, an increase of nearly 9 percent from 2010. While overall production volume in 2011 is the highest since 2007’s 15 million-unit level, it remains well below the mid-15 million level during the 2001-2006 time period.

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NADA: New-Vehicle Sales Remain Strong, Older Units Drive Used Market


McCLEAN, Va. — A strong November has kept U.S. new-vehicle sales on pace to finish at 12 million units for 2010, and the National Automobile Dealers Association (NADA) says that figure could grow by another million units next year. On the used side, vehicles from model year 2005 and older are making gains in a still-competitive wholesale market, F&I and Showroom reported.

NADA’s latest report cites a range of indicators that paint a rosy picture for new-vehicle sales in 2011. On the manufacturing side, the report singled out Audi and Kia as well as the Chevrolet Equinox, Hyundai Sonata and Honda Odyssey as makes and models that have enjoyed a surge in popularity — so much so, in fact, that each manufacturer is ramping up production to meet the demand.

As a result, factory incentives will undoubtedly see a surge in December and January. Bandon, Ore.-based CNW Research recently reported that incentive spending was on the rise in October; however, not yet up to par with historical trends and about 15 percent lower on a year-over-year basis. The same could be said for The Conference Board’s U.S. Consumer Confidence Index, which made news earlier this month with a November spike driven by heavy holiday-season discounts across the retail segment.

All this is in spite of a nationwide unemployment rate that continues to hover around the 10 percent mark. Any positive change in that number would almost certainly result in a payoff for auto dealers, especially considering CNW’s Pent-Up Demand indicator shows that 46 percent of new-car buyers are “new-to-market” — a steep increase from the mere 17 percent of shoppers who initiated their purchase in the first quarter of 2010.

The strong demand for and short supply of quality used vehicles — broadly defined as units less than five years old, many still under factory warranty — is no longer news for new-car dealers. In recent years, most have been slower to send trade-ins to auction or, in the case of many disenfranchised former General Motors and Chrysler dealers, converted their properties into used-car lots.

Now, used units older than five years are beginning to see their values rise. The NADA reports that prices on model year 2004 and lower vehicles are outpacing increases on newer used units. The older units are up 14 percent on a year-over-year basis, compared to 5 percent for model year 2005 to 2009. Those figures are driven by the SUV and pickup segments, which enjoyed price hikes of 24 and 19 percent, respectively.

The NADA report cites the increasing availability of vehicle history reports such as those provided by Carfax and AutoCheck as one reason consumers may feel more comfortable investing in an older car. The bulk of the credit, however, must go to the economic downturn, which forced many used-car buyers out of the price range of newer used units.

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Car Sales Post Strong Gains, With Toyota as the Exception


DETROIT — New-vehicle sales in the United States rose nearly 17 percent in November, setting the stage for the industry to end the year on a high note and enter 2011 with considerable momentum.

But one carmaker, Toyota, has been left out of the strong gains, The New York Times reported. Toyota, still struggling to overcome the damage done to its image by numerous recalls, reported a 3.3 percent decrease in sales last month. Among the 10 largest manufacturers, all but Toyota reported increases of at least 12 percent.

All three Detroit companies posted sizable gains last month. Ford’s sales were up 20 percent, General Motors 12.2 percent, and Chrysler 16.7 percent.

Toyota is on pace to end the year with its lowest market share since 2005 and to sell the fewest passenger cars since 2003. Its share in November fell to 14.8 percent, from 17.9 percent a year earlier.

“They just don’t seem to be able to catch a break,” Jesse Toprak, vice president of industry trends and insight at TrueCar.com, which tracks vehicle sales, said. “Toyota has a tough road ahead. They have not been able to take advantage of the recovery this year.”

Mr. Toprak said he thinks Toyota’s slow reaction and inability to reassure many consumers after widespread complaints about its vehicles accelerating suddenly, “has hurt them permanently.”

Toyota officials attributed last month’s decline to a decision to sell fewer vehicles to businesses and governments that pay discounted rates — known as fleet sales — and a shift in demand toward trucks and away from smaller cars, Toyota’s forte.

Robert S. Carter, a Toyota group vice president, noted that the Toyota brand, which he heads, remained the industry’s most popular brand among individual buyers, even though its sales for the year were down. The Toyota Camry sedan is the top-selling car in the United States for the ninth consecutive year, despite a 24 percent decline in November.

“Over all, we believe our retail volume is right on track. We’re pleased with the month,” Mr. Carter said on a conference call with reporters. “We just chose not to participate in some of the fleet business that’s out there.”

But he conceded that the recalls, totaling more than 10 million vehicles globally this year, have taken a toll, hurting the company’s ability to attract new customers. On Tuesday, Toyota began a “limited service campaign” — short of a full-blown recall — to repair a coolant pump on 650,000 Prius hybrid cars.

“I won’t say that the opinion of our brand is where it was 18 months ago,” Mr. Carter said. “But we’re really pleased with the progress that we’re making. Our retention of our current owner body has not wavered one bit.”

Toyota has been offering some of its best-ever deals this year in the hopes of drawing in shoppers. Meanwhile, the Detroit automakers have been largely successful in ending their dependence on big discounts, a tactic that helped cause many of their financial troubles.

“Without new product to compete with and stripped of its bulletproof quality reputation, Toyota is forced to sell on the deal,” Jessica Caldwell, a senior analyst with Edmunds.com, which provides car-buying advice to consumers, said. “This lack of profitability is a growing concern for dealers.”

Ford is on track to outsell Toyota for the first time since 2006 with its sales in 2010 up 16.6 percent. The Ford brand sold 31.3 percent more passenger cars in November than a year ago, compared to an 18 percent decline for the Toyota brand.

Ford said it planned to build 11 percent more vehicles in the first quarter of 2011 — 635,000 — than it did a year earlier. Ford’s 20 percent overall increase accounts for sales last year by the Volvo brand, which Ford no longer owns, while sales of its remaining brands were up 24.3 percent.

Excluding the brands G.M. closed, Pontiac, Saturn and Hummer, and the one it sold, Saab, sales of the brands it still operates were up 21 percent.

“Consumers are still cautious,” said Jim Bunnell, a G.M. executive who oversees the company’s dealer network and sales, “but we’re starting to see people show an inclination to come back into dealerships and go back into malls. As we go into 2011, we’re going to continue to see a nice improvement.”

Among imports, sales were up 48.2 percent for Kia, 45.2 percent for Hyundai, 26.8 percent for Nissan and 21.1 percent at Honda.

The Detroit automakers, all of which have operating profits for three straight quarters, are being helped financially by higher truck sales in recent months. Sales of light trucks, which generally sell at higher prices and generate more profits than cars, were up 24 percent at Ford and Chrysler and 21 percent at G.M.

November was the second straight month in which the industry’s seasonally adjusted annualized selling rate was more than 12 million. The rate was below 10 million in parts of 2009 but still far below the 17 million rate in the early 2000s.

Analysts expect the industry to sell about 11.5 million vehicles in 2010 and project that 2011 sales could reach 13 million.

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Hyundai Expects to Add to Record U.S. Sales in 2011


YPSILANTI, Mich. – Hyundai Motor Co. expects to set a company record for annual U.S. sales next week and to increase from there in 2011 amid gradual industry growth, its top U.S. executive said.

Hyundai Motor America President and CEO John Krafcik said he expects U.S. auto industry sales to rise to 12.3 million vehicles in 2011, from about 11.3 million this year, almost purely from sales to retail customers, Reuters reported.

“As we look at how heavy the industry went to the fleet market to keep sales up this year, it is pretty amazing,” Krafcik told reporters at a Hyundai facility near Ypsilanti, Mich. “We are not going to have that next year.”

Krafcik said the increase in 2011 would amount to a 10 percent rise in retail sales for the industry. That mark will be hard to reach, with retail sales closely tied to housing starts and home equity in the United States, which remain uncertain amid high unemployment, he said.

“That is asking a lot,” Krafcik said.

Hyundai, which has been introducing new versions of its vehicles, including a Sonata sedan, expects to top 500,000 in U.S. sales by mid-December and end 2010 with a 4.8 percent market share.

Krafcik said the 2011 sales goal would be “more than that.” He also said it would be hard to increase U.S. market share much in 2011 due to company production capacity limits.

Hyundai has been hitting maximum production capacity in the United States, with sales up 21 percent through the first 10 months of 2010, and will have similar limits next year, Krafcik said.

The automaker added about 100,000 vehicles of U.S. capacity this year, reaching about 400,000 vehicles by shifting production of Santa Fe SUVs to a Kia plant.

“I think it is fair to say we will probably be production constrained next year as well,” Krafcik said.

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