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Small Cars Drive Big Sales Gains in April

But Japanese makers begin feeling pinch of shortages.

by on May.03, 2011

Small cars, like the Hyundai Elantra, gained significant ground in April.

It was a big month for the auto industry, though the emphasis was on small cars.

General Motors, Ford Motor Co. along with Hyundai/Kia all posted substantial sales gains during April, Audi meanwhile reporting its best April ever, even as industry giant Toyota continued to stumble.

General Motors sales increased 27% in April, while Ford Motor Co. reported a 16% increase and Chrysler Group sales climbed 22%.  Hyundai reported a whopping 40% sales gain as it continued to woo buyers from other big Asian brands – pushing its market share to a solid 5.7% for the month, triple what it held less than five years ago.

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All three domestic carmakers credited new models for their strong sales last month, primarily small cars like the new Chevrolet Cruze, which gained 180% over the old Chevy Cobalt.  But there was still some strength left in large, luxury and muscle cars, like the Ford Mustang, which came on strong despite the run-up in fuel prices last month.

The improving car market is seen as a sign of an increasing healthy U.S. economy, though observers fret that if fuel prices get too high buyers might pull back in the months to come.  That might also happen, according to analysts, if makers pull back even more on incentives.  Overall, givebacks declined by about 4% in April, according to, with some makers – notably Honda and Toyota – reducing their incentives by 17% or more.


U.S. Car Sales Heading For Big Recovery

IHS forecasting volumes will return to the 17 million range by mid-decade.

by on Dec.02, 2010

With demand for vehicles like the 2011 Nissan Juke growing by double-digits in recent months, is the U.S. car market heading towards all-time record territory?

The U.S. automotive market could recover faster than many had foreseen, analysts from IHS forecast Wednesday, with volumes likely to surge past the 17 million mark by mid-decade.

A variety of factors, ranging from immigration to an upturn in the economy will likely push the recovery, noted senior analyst Michael Robinet.  But there are some factors that could restrain the market, as well, including the likely rise in vehicle prices.

Not everyone echoes the optimistic IHS forecast, however, and some industry leaders are planning for a significantly lower peak during the current economic cycle.

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November’s sales numbers are doing a lot to buoy industry optimism.  The month saw volumes surge to their highest level of the year, an annualized rate of 12.2 million vehicles – with only Toyota among all the major makers posting a decline.


2010 Retail Sales Off to a Slow Start

Power predicting sales down from already weak January ’09.

by on Jan.22, 2010

Demand is strong for some models, like the 2010 Ford Fusion -- but weak overall.

After being hammered for most of the year, the auto industry got some reasonable good news with the December 2009 sales numbers, an upturn sizable enough to make “cautiously optimistic” the operating mantra among the industry leaders who assembled at this month’s North American International Auto Show.

But some might soon reassess even that guardedly upbeat attitude, at least if January’s preliminary sales numbers are any indication of what’s to come.  Using real-time dealer transaction data, J.D. Power and Associates is forecasting the current month will see another decline in car sales.

Retail volumes are anticipated to reach just 500,900, according to Power, which would translate into a seasonally adjusted annual rate, or SAAR, of just 7.9 million units.  That’s not only a letdown from the unexpected December sales thaw, which brought a SAAR of 8.9 million, but also a huge decline from January of last year, when the SAAR stood at 8.8 million.


U.S. Sales and SAAR – January 2010
January 2010 1 December 2009 January 2009
New-vehicle retail 500,900 (-4% Jan. 2009) 817,426 562,619
Total vehicle sales 659,000 (+9% Jan. 2009) 1,027,837 655,302
Retail SAAR 7.9 million 8.9 million 8.8 million
Total SAAR 10.1 million 11.2 million 9.6 million
1 Figures for January 2010 are forecast based on the first 11 selling days of the month.

“January is typically a weak selling month, but this month is particularly impacted by December’s strong close and extra selling weekend,” said Jeff Schuster, Power’s executive director of global forecasting.

But the steady stream of data did reveal at least some glimmer of hope, said Schuster, noting, “the sales pace has been improving as January continues, which is an encouraging sign for the recovering industry.”


Have Automakers Cut Nearly Enough?

New study warns the US market will remain overcrowded, despite Detroit's radical cutbacks.

by on May.14, 2009

Despite deep cuts in both production capacity and the number of models offered by makers, such as Chrysler -- workers shown here building the Town & Country minivan -- a new study warns that the U.S. market remains dangerously over-crowded.

Despite deep cuts in both production capacity and the number of models offered by makers, such as Chrysler -- workers shown here building the Town & Country minivan -- a new study warns that the U.S. market remains dangerously over-crowded.

With the U.S. automaker off by nearly half since it hit its stride, earlier in the decade, manufacturers have been slashing their production and sharply reducing production.  The hardest makers, Detroit’s Big Three, have or will close more than a score of plants and trimmed their overall workforces by roughly half.  But even the most successful makers, like Toyota and Honda, are making unanticipated cutbacks.  Yet this may not be enough in the face of the weakening market.

The U.S. car market remains overcrowded, with too many manufacturers and too many nameplates, warns a new study by the consulting firm, A.T. Kearney.  Daniel Cheng, director of the firm’s automotive practice, said the situation could still get worse over the next few years as Chinese manufacturers begin to edge into the U.S. market.

“Six companies now aspire to be full line generalists,” like Ford Motor Co., Toyota Motor Co., and General Motors, Cheng noted, during a Thursday presentation to and other members of the automotive media.

Subscribe to“The U.S. market is incredibly crowded,” Cheng added, contending that none of the major manufacturers, even those in bankruptcy, appear prepared to step back from the competitive fight.  But, as a result, the full-line manufacturers, including Honda and Nissan, now offer too many nameplates in the U.S. market for them to earn a profit and be sustainable. (more…)