Consumers are responding better than expected to a new season of improved cars and trucks as auto sales in September beat just about every prediction.
New car shoppers snapped up the new models at a rate of 14.9 million per year, beating an already-rosy projection of 14.5. million by Wall Street and other prognosticators who survey car dealers throughout the month.
The biggest winners in September were Toyota (up 41.5 percent) and Honda (up 31 percent), which continue to bounce back from depressed sales last year owing to the Japanese earthquake and tsunami that disabled some of the companies’ factories for months. Hyundai (up 15 percent) and Volkswagen (up 34 percent) continue to post gains from popular new models. General Motors (up 1.5 percent) and Ford (up 2.3 percent) are posting sales gains, but below the industry as a whole. And Chrysler continues to surprise analysts, posting a 12 percent gain from September last year.
Sales were up a frothy 29 percent in September, compared with August.
Why the surge?
There is still a hangover from 2008 and 2009 when industry sales fell to around 10 million. The average age vehicle in the U.S. is above 10 years today because people have put off their new-car purchases the last few years. Banks and finance companies are now offering easier credit than was the case a year ago, as well. Beneath that, economists point to a more confident consumer.
“We hear a lot about unemployment higher than we’d like it to be, but for those with jobs and good credit, it is a great time to buy a new car or truck,” says AOL Autos Editor-in-Chief David Kiley.
Some banks and credit unions are offering two-percent financing to people with good credit. That’s almost as good as subsidized loans from the automakers’ finance companies. “Not only is it cheap, it’s relatively available,” says Jeff Schuster, senior vice president of forecasting at LMC Automotive, an industry consulting firm.
“The money is so cheap now,” said Jesse Toprak, TrueCar.com analyst. “Higher resale values and cheap money has been enabling automakers to offer some of the most attractive leasing programs we’ve seen in years.” The interest rate on a 48-month new car loan was about 3.19 percent last month, down from 4.39 percent in September 2011 and 7.45 percent in May 2009, according to Bankrate.com.
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More good news for buyers: Used-car values have remained high due to tight supplies and strong demand, and that means dealers are paying more for trade-ins.
More good news for sellers: September was a strong month without auto companies resorting to jacking up the discounts. The average incentive for the month was $2,468, down almost 7 percent from September of last year, according to the TrueCar.com auto pricing site. Automakers are able to book more profit when they discount less.
What models are hot? GM said sales of its mini, small and compact cars nearly doubled last month. Ford’s small car sales-Fiesta, Focus and the new C-Max – rose about 73 percent, while fuel prices rose. But both automakers said pickup truck sales in September, when those sales typically strengthen, were softer than in years past. Both GM and Ford said trucks made up about 12-percent of sales last month, down from 13-percent in September 2011.
“There has been a fundamental shift of truck to car that we’ve been seeing for the past few years,” said Chevrolet’s sales chief, Don Johnson, adding that September’s results represented a continuation of that trend.
Some luxury brands were strong as well. Audi sales were up 26.5 percent, while Mercedes-Benz sales were up 7.5 percent – a record September for the company in the U.S.
AP and Reuters contributing
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So far this year, midsize sedans are thriving in showrooms.
Consumers are making them the best-selling cars of any segment in the auto industry, capturing 27.4 percent of the overall market, according to a study released this week by Experian Automotive.
The rising tide of the segment has helped crown a new automotive king in the United States– at least halfway through 2012. The Toyota Camry is the country’s top-selling car, selling approximately 209,000 units, according to vehicle registration data. The Camry replaces the Ford F150 pickup in the top spot. The F150 has sold 202,000 units.
The shift between the two underscores some of the forces shaping the national economy.
Midsize sedans have appealed to customers seeking a combination of space and fuel efficiency amid gas-price volatility. Construction of new homes, always a key driver of pickup truck sales, remains slack.
Another key factor in the Camry’s ascension is the sheer number of models within the midsize segment that have undergone redesigns or are undergoing redesigns in recent months: the Nissan Altima, Ford Fusion, Chevy Malibu Volkswagen Passat and Camry have all seen extensive changes, and the revamped Honda Accord is set to hit dealerships in a matter of weeks.
“Higher gas prices and new model redesigns could be pushing consumers to look at small to mid-range cars instead of the larger vehicle segments,” said Jeffrey Anderson, director of consulting and analytics for Experian.
Here’s a look at some of the other mid-year sales winners:
Sales Through June 2012: 202,000
MSRP: $23,500 – $52,305
Invoice: $22,100 – $47,124
Fuel Economy: 17 mpg City, 23 mpg Highway
The news isn’t all bad for the Ford 150. It still is showing healthy sales, and it remains solidly in the No. 2 overall sales position. And if you want to look at the competition as some sort of automotive version of the electoral college, the F150 won a head-to-head matchup with the Camry in 19 states, and Texas made up 17 percent of its overall sales.
The Camry took 13 states head to head, with California claiming 13 percent of its sales.
The Ford F150 always remains a top contender in large part because of its consistency and continual upgrades.”Last year, we upgraded our powertrains and this year, we’re adding some new technology to the F-150,” said Doug Scott, head of marketing for Ford trucks. “It keeps our pickups really fresh.”
It’s important to note that Experian’s analysis is based off vehicle registration data. Ford does not release specific sales figures of individual F-Series models on a month-by-month basis.
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Sales Through June 2012: 162,582
MSRP: $15,755 – $26,305
Invoice: $14,661 – $24,943
Fuel Economy: 28 mpg City, 36 mpg Highway
You might view the Civic as a midsize sedan that ranks second in the segment in sales or as a smaller car that ranks as the top-selling smaller car. It doesn’t really matter. On the overall score sheet, the Civic ranks third in overall sales through the first half of this year.
Its sales have increased substantially this year, according to Autodata Corp., partly because Honda has recovered from last year’s Japanese catastrophe, and partly because the Civic’s EPA-estimated 36 mpg are attracting fuel-conscious buyers.
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Sales Through June 2012: 46,236
MSRP: $34,900 – $47,600
Invoice: $32,290 – $43,970
Fuel Economy: 23 mpg City, 33 mpg Highway
Six generations into its lifespan, the BMW 3 Series is still the one to beat. Recently redesigned with a larger frame, the 3 Series is a consistent, elegant offering in the luxury segment.
It bested the Mercedes-Benz C Class, its top competitor in the segment, by about 10,000 vehicles through the first six months of the year. But the competition is always fierce, and Mercedes has been narrowing the gap.
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Sales Through June 2012: 49,697
MSRP: $23,280 – $54,095
Invoice: $22,349 – $51,931
Fuel Economy: 17 mpg City, 28 mpg Highway
Speaking of neck-and-neck competitions, the German giants have nothing on the ongoing battle between two American classic sports cars. The Chevy Camaro is the current sales leader in the segment, but not by much.
There were 49,697 Camaros sold through June 2012 and 48,624 Ford Mustangs. But, some momentum is on the Mustang’s side: It has increased sales by 20.4 percent year to date, while the Camaro is off by half a percentage point.
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Sales Through June 2012: 146,642
MSRP: $22,495 – $28,495
Invoice: $21,133 – $26,749
Fuel Economy: 23 mpg City, 31 mpg Highway
If the midsize sedan competition is the most cutthroat of 2012, the fighting to reign in the crossover segment cannot be far behind. It’s the second-largest segment overall, claiming 19.4 percent of the market, according to Experian.
The Honda CR-V, a long-time staple, is the current leader, selling 146,642 vehicles through June. Despite enduring three recalls since its debut, the redesigned Ford Escape hasn’t seen a sales dip. It ranked close behind with 127,167 units sold at the mid point of 2012. In third place, the popular Chevy Equinox with 110,890.
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Sales Through June 2012: 77,894
MSRP: $28,870 – $40,720
Invoice: $27,210 – $37,972
Fuel Economy: 17 mpg City, 24 mpg Highway
Conventional wisdom holds that consumers are fleeing the SUV market and buying smaller, more fuel-efficient cars. That’s no doubt true in some fashion. But the burgeoning health of the auto industry is lifting all segments – including the once-verbotten SUV. Sales of SUVs are up 11.7 percent overall this year.
And the granddaddy of the SUV realm, the Ford Explorer, remains at the top of its game. Ford has sold 77,894 of the cars through June, which got a boost from a redesigned lineup that includes a more powerful sport trim. The Jeep Grand Cherokee, another stalwart, remained in the competition with 75,117 vehicles sold.
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2012 Sales YTD: 68,694
MSRP: $20,995 – $29,995
Invoice: $20,810 – $28,670
Fuel Economy: 17 mpg City, 25 mpg Highway
For a long time, many industry pundits thought Chrysler would kill off the Grand Caravan and keep its cousin, the more expensive Town& Country. But earlier this month, they learned the reverse is true. Chrysler plans to eliminate the T&C and put its minivan stake entirely in the Grand Caravan.
With the Grand Caravan leading the sales fight with 68,694 vehicles sold, the two models combine to own 29.0 percent of the minivan market share. But individually, the Honda Odyssey (61,756) and Toyota Sienna (58,985) are very much alive to claim the title of best-selling minivan.
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