Here’s The Auto Industry’s Awesome March
Following strong domestic performance for the month of March, American car manufacturers are seeing shares rise across the board. Tesla Motors (NASDAQ:TSLA) posted its first-ever quarterly profit, sending its shares racing over 20 percent on Monday, and settling ahead 16 percent by closing. Ford (NYSE:F) had a great month of March, reporting its best monthly sales since May of 2007. General Motors (NYSE:GM) followed suit, with its best March in five years, and landed 6 percent up in its year-over-year measure.
The auto industry has been performing well this year so far, at least domestically. Sales overall are set to be the best in the last six years, since the pre-financial crisis economy. Low interest rates, re-styled vehicles, pent-up demand, and numerous well-reviewed products have helped U.S. manufacturers emerge from the shadow that was cast over the industry when many of the companies required a government injection to stay in business.
Tesla Motors, which manufactures luxury electric vehicles, surpassed its own guidance, and recorded a profit for the quarter, surprising many. In data released Sunday, the company had delivered 4,750 models of its Model S sedan, over the anticipated 4,500. Its stocks surged as a result of the good news, and maintained forward momentum through Tuesday, when CEO Elon Musk stated that there was another more exciting announcement to come.
The good news for the company comes as a relief for investors, who were becoming more anxious as Tesla plodded on through its capital-heavy start-up phase and was posting loss after loss. It seems that the worst of the investment period is over, and the Model S production line is operating at its nearly projected pace of 20,000 deliveries annually.
Ford also had a great March. Spearheaded by enthusiastic sales of the re-designed Fusion sedan, Ford had its best month in almost 6 years. The Fusion and Escape models sold in record numbers, and the F-Series pickup line continued full steam, selling 83,001 units. Overall, Ford was 5.7 percent ahead in the year-over-year for March.
“Customers are buying our all-new Fusion and Escape in record numbers, and we are working harder than ever to keep pace with demand for these fuel-efficient vehicles,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. “Full-size pickup demand continues gaining momentum, outperforming the industry for the third consecutive month.”
Car sales remained even in the year-over-year despite the Fusion’s success, and it was the strong performance from the crossovers like the Escape and the F-Series that brought the company ahead for 2013.
The success of Ford did not come from the detriment of General Motors, either. GM also posted a gain of 6 percent, moving 245,950 vehicles last month. “GM delivered its best March sales in five years thanks to a strengthening economy and new products, and we are expecting our third consecutive increase in market share versus last year ,” said Kurt McNeil, vice president of U.S. sales operations. “Sales of smaller cars have been robust for some time. Trucks have improved in lockstep with the housing market and the strength of the crossover market signals that America’s families are more confident about their financial health.”
The largest GM division, Chevrolet, remained more or less stagnant from March last year. Cadillac, however, posted gains of 50 percent, and Buick grew 37 percent over March of 2012. As seen with Ford, GM’s crossovers saw sales gains of 31 percent, and trucks and SUVs were up 2 percent. Cars actually decreased, by three percent, and large trucks grew by 6 percent.
Toyota’s (NYSE:TM) American division performed admirably as well, moving 205,342 vehicles in March, a 1 percent increase in the year-over-year. Adjusted for the daily selling rate, this is a 4.8 percent gain from 2012. ”The auto industry continued its string of impressive monthly results, and at Toyota we had our best month since Cash for Clunkers in August of 2009,” said Bob Carter, senior vice president of automotive operations, Toyota Motor Sales, U.S.A., Inc. “A strong first-quarter close and increased consumer confidence continue to position the auto industry as a leader in the economic recovery.”
Though the Toyota nameplate actually decreased 0.5 percent since last year, combined with strong performance from Lexus and Scion, the company managed to pin down the number one retail manufacturer for the month. Lexus was up 19.4 percent on a DSR basis, or 15.1 percent on raw volume.
Due to an earlier release of data, Tesla shares had an extra day in the market to react to the reports. By market’s close on Tuesday, Ford and General Motors had not yet shown significant signs of market activity, though the day’s performance hinted at a trend upwards.
Here’s how Ford, General Motors, Toyota and Tesla have traded over the past month: