August Car Sales Stronger Than Expected
DETROIT (CBSDetroit) — Car buyers came into dealerships in big numbers in August.
According to CBSDetroit, that boosted most brands' sales by more than double digits over last year.
"I think buyers are really looking at their personal situations, and assessing them," says LMC Automotive analyst Jeff Schuster. "I think we're seeing that pent up demand we've been hearing about."
That pent up demand appears to be coming at a good time.
"There's a lot of new product out there that's exciting, and a lot of big segments that are quite popular and have historically large volumes," said Edmunds.com senior analyst Jessica Caldwell. "I think cars out there are definitely old on the road. People are seeing these new cars out there, new technologies, new features."
It appears that the seasonally adjusted annual sales rate (SAAR) could hit 14.6 million, a rate not seen since before the recession.
All three domestic brands saw solid improvement over last August. Chrysler sales were up 14 percent, Ford 13 percent, GM 10 percent.
"The underlying consumer demand continues to be strong. This is happening while the incentives happen to be down from year to year, and transaction prices are up," says Truecar.com analyst Jesse Toprak. "That's essentially a dream scenario for automakers, in terms of their bottom lines."
With a 46 percent increase, Toyota appears to have recovered completely from last year's earthquake and tsunami.
"Toyota, I think, has bounced back a little bit stronger than expected by most in the industry," said Schuster.
Honda bounced back even faster, with a nearly 60 percent sales gain.
With a number of new products, Volkswagen posted the biggest increases of all.
"Volkswagen had another outstanding month with sales up 63 percent from the year before for its best August since 1973," said Edmunds.com analyst Michelle Krebs. "If the brand continues at this pace – which, of course, is never guaranteed – VW's goal for 800,000 sales per year by 2018 may not be as lofty as once thought."
Chrysler's sales report was boosted by solid sales of Ram pickups, Fiat small cars, and the strong debut of the Dodge Dart. Chrysler sold 3045 Darts in August.
"Our hard work over the past few years is starting to pay some dividends in our sales growth, quality awards and profitability," said Reid Bigland, who leads Chrysler's sales team. "Not to mention, an incredibly resilient U.S. new vehicle sales industry doesn't hurt either."
Ford's sales increase was also helped by a strong pickup truck performance, and a strong debut for the new Escape. Ford's small cars also did well.
"As fuel prices rose again during August, we saw growing numbers of people gravitate toward our fuel-efficient vehicles – cars, utilities and trucks," said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service.
Czubay said Ford's retail sales were up 19 percent.
GM's 12 percent sales increase came as all four of its brands posted gains. It was a record month for the small Chevrolet Cruze and Sonic. GM sales operations manager Curt McNeil says the Chevrolet Volt had its best month ever, with more than 2800 sales. He wouldn't say if that momentum could continue.
"There's a lot of factors that come into that, fuel prices, and where they're going to head, nobody can say."
McNeil sees sales remaining strong in the fourth quarter of the year, as GM and other carmakers introduce new products.
Jessica Caldwell of Edmunds.com is encouraged because sales were not boosted by artificial factors like incentives, or fleet sales.
"When things look strong from the retail perspective, I think that kinda give us hope that things are truly getting better."
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