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Light vehicle sales in March 2012 escalated 10% to seasonally adjusted annual rate (SAAR) of 14.4 million units from 13.1 million units in the year-ago month, reflecting a fast recover in the industry. As many as 1.4 million cars and trucks were sold during the month, up 13% from March 2011. According to Edmunds.com, this marks the best monthly sales in the U.S. since August 2007.
Higher gas prices (20% rise from end-2011 to about $4 per gallon) led to the demand of fuel-efficient small cars (such as Ford Focus, Nissan Versa and Fiat 500) and compacts (such as Chevrolet Cruze and Honda Fit), which triggered the overall growth in sales. This apart strong pent-up demand (average age of a vehicle on U.S. roads is 10.8 years), mild weather and higher incentives fueled growth during the month. According to Autodata Corp., automakers’ spending on incentives rose 2.6% to $2,547 per vehicle in March.
Large vehicles (especially fuel-efficient sports utility vehicles and trucks) did not do badly as well (such as Volkswagen Passat, Ram pickup and Ford F-series pickup). This can be attributable to attractive promotions on trucks, improvement in the job market and higher consumer confidence. The Thomson Reuters/University of Michigan study of consumer sentiment showed that consumer confidence reached its highest level in March in a year.
TrueCar.com noticed that auto sales grew despite a rise in average vehicle prices, which increased about $2,000 to $30,748 in March on a year-over-year basis. Jesse Toprak, Vice President of the car-buying website, revealed that car buyers are not only buying small cars but also installing luxury components in the vehicles such as leather seats and navigation systems.
Sales by Automakers
General Motors Company’s ( GM - Analyst Report ) sales rose 12% to 231,052 vehicles, driven by strong sales of Chevrolet Silverado pickup truck. Sales of passenger cars grew 22%, compact-crossover surged 47%, mid-size sales soared 38% and full-size pickup truck increased 14%. Sales of Chevrolet Volt electric car saw it best month ever with sales nearly quadrupled to 2,289 units.
Ford sales increased 5% to 223,418 vehicles, driven by strong sales of Ford Focus (64.7%), Ford Edge (13.5%) and the F-Series pickup (9%). Sales of the company’s passenger cars grew 5.6%, utilities rose 3.3% and trucks went up 5.6%.
Chrysler Group LLC – controlled by Italy’s Fiat SpA ( FIATY ) – reported its best month in four years. The automaker’s sales surged 34% to 163,381 vehicles driven by improved sales of Fiat small cars and Chrysler 200 and 300 sedans. Fiat sales skyrocketed to 3,712 units from a meager 500 units in March 2011, when the car was introduced in the U.S. Meanwhile, sales of Chrysler’s 200 and 300 sedans each doubled from the prior-year month.
Toyota Motor Corp.’s ( TM - Analyst Report ) sales escalated 15.4% to 203,282 vehicles driven by impressive sales of Camry and the Prius hybrid that offset lower sales of Lexus luxury lineup. Sales of Camry surged 35.3% to 42,567 units while sales of Prius leapt 54.3% to 28,711 units.
Honda’s sales ebbed 5% to 126,999 vehicles due to lower demand for its Acura and hybrid lineups. Sales of the company’s cars and trucks dipped 4.3% to 115,833 units, while that of Acura division fell 11.5% to 11,166 units.
Nissan Motors Co. ( NSANY ) sales rose 12.5% to 136,317 vehicles, making a record for any month in the company’s history. The growth was led by impressive sales of Versa sedan (40.7%), Leaf electric car (94.3%), Altima midsize sedan (27.1%), Frontier (32.1%) and Quest (80.0%) trucks. Nissan Division sales increased 14.8% to 126,132 units while sales of Infiniti vehicles dipped 9.8% to 10,185 units.
Daimler AG’s ( DDAIF ) Mercedes-Benz sales scaled up 7.7% to 23,134 units led by strong sales of C-, E-, and M-Class lineups. Other popular vehicles during the month include CLS four-door coupe (up 242.9%) and SLK roadster (up 179.3%).
Volkswagen AG ( VLKAY ) sales shot up 35% to 36,588 units, making it the company’s best March since 1973. The higher sales were led by commendable sales of Passat sedan and the new Beetle.
Hyundai Motor Co. ( HYMLF ) sales went up 13% to 69,728 units, which is also a monthly sales record for the company. The company’s Accent subcompact was the highly sought after model during the month (up 45%).
Strong pent-up demand and improving macroeconomic conditions in the U.S. will continue to revive the industry from recessionary lows. According to Jesse Toprak, total sales in the industry could go up to 14.5 million in 2012, up 13% from 12.8 million in 2011.
Good news is that a revival of the automotive industry will lead to a recovery in other industries as well since the former generates demand for so many products manufactured by those industries, which are used as automotive components.
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