Posted on 03 Apr 2012
Chrysler and Ford each said Tuesday that their American sales rose last month to the highest level in at least four years, helping the auto industry build momentum even as gasoline prices topped $4 a gallon in many states.
Chrysler Group said it sold 34 percent more cars and trucks than in March 2011, marking the 24th consecutive month of year-over-year sales increases for Chrysler.
General Motors reported a 12 percent increase, with small cars accounting for much of the gain. G.M. said it sold a record 100,000 vehicles with a fuel-economy rating of at least 30 miles per gallon in highway driving.
“The economic recovery and a deep bench of fuel-efficient cars and crossovers have been driving our sales for more than a year, but the combined impact has never been stronger than it was in March,” Don Johnson, G.M.’s vice president of United States sales operations, said in a statement. “Since the last time fuel prices spiked, both the economy and G.M.’s product portfolio are undeniably stronger.
Ford Motor Company said its sales were up 5 percent.
In another monthly report, the South Korean automaker Hyundai said its American sales hit an all-time high in March with a 13 percent increase.
Over all, analysts said they expected automakers to sell more than 1.4 million vehicles in March, about 15 percent more than a year ago and the most since 2007. Unseasonably warm weather across much of the country helped draw shoppers to dealerships, as did declining unemployment, new models like smaller version of the Toyota Prius hybrid car, and wider availability of auto financing.
“After delaying purchases over the last couple of years, consumers are eager to jump into the new car market,” said Jessica Caldwell, senior analyst with the automotive research firm Edmunds.com. “Vehicle trade-in rates have achieved sustained highs in recent months, which suggests that consumers have decided that they’ve held on to their cars for too long. And with the average credit score for new car buyers at its lowest level since the first half of 2008, the market is clearly becoming a friendlier place for all buyers.”
The industry’s unexpectedly strong performance in the first quarter has prompted automakers to begin planning for production increases to keep up with demand, though they remain cautious about overreacting.
Many analysts say they are now confident sales for the full year will easily surpass 14 million vehicles, which had seemed like an overly optimistic target several months ago. In contrast, industry sales were 12.8 million last year and 11.6 million in 2010.
“Each month of strong sales brings with it increased optimism that the pace of growth represents a true recovery for the sector,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. “Barring any future shock related to geopolitical issues in the gulf region and further upward pressure on the price of oil, we believe sales will continue on a solid pace for the balance of the year.”
Analysts are watching gas prices closely to see if and when they do start to weigh on sales. According to the AAA motor club, the average price of regular gas is about $3.92 a gallon, 7 percent higher than a year ago.
Gas prices do seem to be having an effect on people’s intentions. A March survey by the firm TechnoMetrica identified a significant drop in the number of people who said they planned to buy a new vehicle in the next six months. Respondents to the telephone survey, conducted monthly since 2007, were significantly more pessimistic in March than in February, said Bob Austin, the firm’s vice president of automotive operations.
“It all seems to be hinging around high gasoline prices,” Mr. Austin said.
Separately, AutoNation, the nation’s largest dealership chain, said retail sales at its stores rose 15 percent in March compared with the same month a year ago. It said sales increased 26 percent for domestic brands, 10 percent for import brands and 10 percent for luxury vehicles.