Respite from the extreme cold weather and snowfall prevailing since December and incentives offered by automakers resulted in strong U.S. light vehicle sales in Mar 2014. Sales during the month increased 6% from the year-ago level to 1.54 million. Sales on a seasonally adjusted annualized rate (SAAR) basis increased to 16.4 million in Mar 2014 from the year-ago level of 15.3 million units.
Most large automakers like Ford Motor Co. (F - Analyst Report), General Motors Co. (GM - Analyst Report), Toyota Motor Corp. (TM - Analyst Report), Chrysler and Nissan Motor Co. Ltd. (NSANY) reported increase in sales in Mar 2014. Chrysler led in terms of year-over-year increase in sales, while General Motors had the highest sales volume.
Let's look at the U.S. sales figures reported by the individual automakers.
General Motors recorded 256,047 vehicle sales in March, up 4% year over year. Retail sales also increased 7% while fleet sales inched down 5%. The company is set to launch many vehicles in 2014, which are likely to improve sales in the coming months.
Ford reported a 3.4% increase in total sales from the year-ago period to 244,167 vehicles in Mar 2014. Retail sales increased 3% year over year to 166,030 units. This is the highest retail sales in March in the last 8 years.
Chrysler Group – controlled by Italy’s Fiat S.p.A (FIATY) – recorded a 13% year-over-year rise in sales, bringing the figure to 193,915 vehicles. Chrysler witnessed year-over-year increase in monthly sales for 48 consecutive months. Moreover, this is the best March sales for the group since 2007.
Toyota’s sales increased 8.9% year over year on daily selling rate (DSR) basis and 4.9% on volume basis to 215,348 units in Mar 2014. Sales in the Toyota division improved 2.5% based on volume and 6.5% on DSR basis to 186,755 units. Lexus sales rose 28% on DSR basis and 23.3% on volume basis to 28,593 units.
Honda Motor Co., Ltd. (HMC - Analyst Report) recorded a 1.8% year-over-year increase in sales on DSR basis to 133,318 vehicles in Mar 2014. However, sales on volume basis decreased 2%. Sales in the Honda Division increased 0.3% on DSR basis to 117,738 units but fell 3.4% on volume basis. Sales of the Acura Division increased 14.7% on DSR basis and 10.5% on volume basis to 15,580 vehicles.
Nissan Motor posted an 8.3% year-over-year increase in sales to 149,136 vehicles in March. Sales in the Nissan division also climbed 7.9% to 136,642 units. Even the sales of the Infiniti Division hiked 12.5% to 12,494 units in the month.
The combined effect of delayed purchases and the beginning of the spring selling season led to strong sales in March. The improvement is expected to continue in the months ahead, backed by a strong outlook for 2014.
In the long term, sales are expected to rise on the back of strong pent-up demand, easier car financing and low gas prices. Additionally, improving macroeconomic conditions, such as low interest rates, reduced unemployment rates, improving consumer confidence and recovery of the housing market are likely to boost sales. These catalysts are expected to drive the U.S. auto sales to pre-recession levels.
As the automobile sector is a key industry for growth, improving auto sales will help in reviving the overall U.S. economy. Ford expects the U.S. industry volume to range within 16–17 million units in 2014, compared with 15.6 million units sold in 2013. Meanwhile, General Motors expects industry sales in the range of 16–16.5 million in 2014, while Toyota expects it to be about 16 million.