Ford (NYSE:F) and GM (NYSE:GM) were big winners when reports of March auto sales were announced this week. The auto industry as a whole had its best month since May 2007, giving analysts substantial reason to believe the worst is over for car makers — and that a period of strong growth may be ahead.
Detroit’s top-two automakers has reason to thump their chests following the news. GM posted a 6 percent increase when compared to March 2012, selling more cars than in any March since 2008. As CEO Dan Akerson noted in a CNBC “Squawk Box” segment Thursday, much of GM’s success is tied to its small car sales. Furthermore, truck sales have outperformed expectations, owing to a rise in construction projects across the U.S.
This factor helped push Ford sales up 6 percent against last year March figures. The star on Ford’s team is the F-Series pickup truck, a line that’s pushing Ford to compete with GM and even beat the Detroit rival in the pickup category. In fact, Ford had a chance to perform even better in March but was held in check by poor Lincoln sales. Lincoln execs predict a better April.
Even Chrysler came up big in March, putting up a 5 percent increase year-over-year that included a whopping 24 percent increase in its popular Ram Truck line. Though many analysts were cautious about expecting more increases in sales, it appears the consumer confidence levels are overcoming the hesitations about the U.S. economy. A slight uptick in actual prices paid by consumers (following all discounts) reflects a willingness to pay higher prices to get the cars in their possession now.
The auto industry hopes the reemergence of consumers following the extended recession-era drought will continue pushing sales in the coming months. Worries about the effects of the increased payroll tax are countered by an apparent consumer desire to own efficient, better performing vehicles. Toyota (NYSE:TM), the world’s current leading automaker, reported a modest 1 percent increase over last March’s sales, while Volkswagen saw a 3.1 percent hike. For Volkswagen, the decision to build a Chattanooga, Tennessee plant is already starting to pay off in the U.S. market.
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