Here’s Why November Was the Auto Industry’s Best Month in Two Years
Lower gas prices and wider availability of Japanese models made November the American auto industry’s best sales month in more than two years.
Chrysler’s U.S. sales were up 45 percent last month compared to November 2010. Sales of its passenger cars more than doubled, and the Chrysler brand reported a 92 percent increase. Jeep sales rose 50 percent in the brand’s best November since 2003.
Ford (NYSE:F) sales were up 13 percent last month as the automaker sold 26 percent more trucks and sport-utility vehicles but 9 percent fewer cars. Demand for the Ford Explorer more than tripled.
General Motors (NYSE:GM) sales rose 7 percent in November. Sales of GM’s compact and sub-compact cars, including the Chevrolet Cruze, were up 54 percent. GM sold 31 percent more full-size pickup trucks than in November 2010.
“We are seeing a broad spectrum of customers return to the market,” said Don Johnson, GM’s vice president of United States sales operations. “Truck sales showed a very solid increase, as we expected, but the momentum building behind our most fuel-efficient vehicles was even stronger.”
Strong sales weren’t limited to American companies. Nissan reported a 19 percent gain in November, led higher by demand for its Versa and Sentra small cars.
Edmunds.com, a Web site for automotive information, and other analysts have projected that the industry’s annualized selling rate climbed to about 13.4 million vehicles in November, the highest since the government’s cash-for-clunkers program in August 2009.
However, Edmunds predicts the “mini-bubble” created by pent-up demand will end in early 2012.
“People are now returning to the marketplace, and that’s what’s driving the sales increases over the last couple of months,” said Jeremy Anwyl, the chief executive of Edmunds. “But the idea that there’s a sustained turnaround under way and that this will continue is probably overstating things.”
But Ford executives expect the market to continue to grow steadily, and have increased fourth-quarter production by 2 percent to keep up with demand.
“The industry sales rate has exceeded 13 million in each of the last three months,” said Ken Czubay, Ford’s vice president for United States marketing, sales and service. “This suggests the current momentum is not an aberration. We believe replacement demand will continue to support stronger levels in 2012.”
November wasn’t nearly so good to Honda (NYSE:HMC), which reported sales down 6.4 percent from last year. Sales of its best-selling Civic rose 3.4 percent, but sales of the Accord fell about 15 percent. U.S. November sales fell to 83,925 vehicles from 89,617 a year ago.
Honda and Toyota (NYSE:TM) were the two companies that experienced the biggest disruptions related to the earthquake and tsunami that struck Japan in March. However, unlike Honda, Toyota has been able to claw its way back, with November sales up 6.7 percent compared to last year.
November’s results represent Toyota’s first year-over-year sales increase in the U.S. in seven months. Just as Toyota’s production was recovering from shortages due to the earthquake, massive flooding in Thailand, where it builds parts and some autos for export, crimped global output.
Toyota reported it sold 137,960 vehicles in the U.S. in November, up from 129,317 a year ago, and 2.9% above October’s total.