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California is Driving US Car Sales Rebound

Golden State buyers continue to overwhelmingly favor Asian brands.

by on Jan.25, 2013

With the addition of several new models, such as this Prius C, the Prius "family" comprised the best-selling nameplate in California last year.

The boom in auto sales gave the national economy a huge lift in 2012 and was critical in helping swing the industrial Midwest into Barack Obama’s camp during the 2012 presidential campaign.

But it turns out California — where gasoline prices were among the nation’s highest for much of the past year — was leading the boom in car sales. It was also at the cutting edge of the shift from conventional gasoline power to cleaner, higher mileage battery-based vehicles.  Significantly, the Toyota Prius became the state’s best-selling vehicle.

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But, as has been the case for a number of decades, foreign-owned brands, especially the Asians, topped the California sales charts, Kia, the increasingly stylish Korean carmaker, was the fastest growing brand, posting a 53% sales gain among California’s traditionally trend-conscious buyers.

The California New Car Dealers Association reported that 2012 new-vehicle registrations in California increased 25.3% over 2011, outpacing the increase in national sales, which climbed 13.4% for all of last year.  According to the CNCDA, more than 1.6 million new cars and light trucks were purchased during 2012, the best number since 2007.

“With California’s economy on the rebound, consumers feel confident again about buying a new car, and there has never been a wider selection of models to choose from,” said Darryl Holter, CNCDA Chairman and operator of the eight-rooftop Downtown L.A. Auto Group.

Toyota’s Prius knocked down the Honda Civic after its two-year reign as the best-selling vehicle in California, according to CNCDA figures. The sales data are from the California New Car Dealers Assn. which tracked retail auto registrations. That does not include sales to rental car companies, government and other fleet customers.

Toyota sold 60,688 of the various members of the expanding Prius hybrid “family” last year, more than one quarter of all the models sharing the Prius badge sold by Toyota across the U.S. Overall. 7.4% of all cars sold at retail in California were hybrids – more than double the national average.

California buyers also purchased some 3,000 electric vehicles – again, a significantly higher percentage, based on population, than anywhere else in the country.

Financial incentives such as state rebates for plug-in hybrids and electric vehicles and other perks, such as car pool lane permits, helped increase the California battery-car numbers, noted Rebecca Lindland, an analyst with IHS.

The former sales champion, the Honda Civic, fell to second with sales totaling 57,124 units, while the Toyota Camry was third with sales of 50,250.  Honda also grabbed the fourth spot, the Accord ringing up sales of 49,420 units, followed by the Toyota Corolla with total sales of 38,037. The Honda CR-V, Ford F-Series pickup, Nissan Altima, Hyundai Sonata and Toyota Tacoma rounded out California’s list of the 10 best selling vehicles.

Ford’s F-Series pick-up truck, perennially the bestselling nationally, placed seventh in California with sales of 25,434 – and was the only domestic nameplate to land in California’s Top 10. The Chevrolet Silverado truck, the second bestseller nationally last year, didn’t come close with sales of just 17,804, below such disparate vehicles as the Hyundai Elantra.

While California gasoline prices are consistently among the highest in the nation, luxury or near luxury cars such as BMW-3 Series, Mercedes-Benz C-Class and E-Class actually outsold subcompacts such as the Nissan Versa, Honda Fit and Fiat 500.

Toyota was far and away the top selling brand in California with a 21.1% market share – exceeding General Motors’ national share by by more than four percentage points. Honda was second with 12.5% of the market. Ford held on to third place in California with 11.3% of the retail market and GM was close behind with 11.2% — compared to its 16.9% national market share.

Next were Nissan and Hyundai, tied for fifth place at 8.3%, and Chrysler followed at 6.5%. Volkswagen nabbed a 5.5% market share during 2012.

Besides Kia, the other fast growing brands in California were Subaru with a 44.7% gain in sales and Volkswagen, which posted a 38% increase. However, Toyota also posted a 39% increase – its Lexus luxury brand gaining 31%. Honda sales climbed 30.7%, and sales of Jeep brand vehicles climbed 26.6% to outpace the overall California market rebound.

California motorists also preferred cars to trucks by a decisive margin last year. Almost 63 percent of the new vehicles purchased in the state were passenger cars, compared to 51% nationally.

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2 Responses to “California is Driving US Car Sales Rebound”

  1. Jorge M. says:

    While U.S. auto sales did rebound nicely, it unfortunately did NOT do much to improve the U.S. economy at all. U.S. car makers have hired ~10,000 people some from the 50,000 workers that were terminated and that is good. Suppliers to the car companies have been slower to re-hire and are working their minimal number of employees harder than ever as are most companies who have not shuttered their doors. Unfortunately those 10,000 employees are a drop in the bucket compared to the millions of people who have lost their jobs in the past five years in the U.S.

    Many who have secure financial situations are almost oblivious to the economic situation in the U.S. but most businesses are not. Dell, HP, Nokia, AMD, Intel and hundreds more in the PC industry have fallen on tough times as have most other industries other than new cars and planes. It’s a very scary situation and contrary to the media dribble, the situation is not getting better based on the business people I talk to throughout the U.S. and Europe, weekly.

    • Paul A. Eisenstein says:

      Jorge, I am not in agreement with you. First, while suppliers are trying to maximize efficiencies v going on a wholesale hiring binge, I think you’re underestimating this. The OEs have themselves hired or rehired significantly more folks than you claim. GM is citing a number closer to 30,000 and even if you find ways to reduce the figure, you have to add in everyone else, down to the new VW plant in Tenn. And, as we agree, even if the usual multiplier effect isn’t the age-old fallback, 7 support/supplier jobs for every one on the line, there is little doubt the autos area has been a substantial job creator. Most experts I talk to, whether industry or economic analysts, tend to echo this position.

      Now, you are bordering on a much more worrisome subject. There is a marvelous piece on the Associated Press that was posted, I believe, on Thursday or Friday, that looks at the impact of automation on jobs. It opens with a tease of the potential impact that autonomous vehicles might have on one area of the economy, ie truck drivers, taxis, delivery drivers, limos, who have traditionally been immune to the impact of technology. Suddenly, even garbage trucks could be automated. (Next five years? Probably not, but 2025, 2040, 2050? Very possible.) We are at an era in which fewer and fewer corners of the workforce are immune from technology’s impact. It’s no longer just the typing pool and assembly line welders. By some estimates, if we cannot conceive of new work for humans unemployment could surge to 50% in the decades ahead and the division of wealth could reach staggering levels.

      BTW, for Kurt Vonnegut fans, check out his very first book, “Player Piano” for his take on this very phenomenon, written about 60 years ago when he worked for GE (or was it IBM) for a brief period.

      Paul A. Eisenstein
      Publisher, TheDetroitBureau.com