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Posts Tagged ‘auto incentives’

US Car Market Showing No Signs of Cooling Down

SUVs, crossovers and luxury vehicles drive demand.

by on Jul.28, 2014

Strong demand for products like Altima mean Nissan will deliver a double-digit July sales gain.

It may be an unexpectedly cool summer in much of the country but you wouldn’t know by looking at July’s sales numbers – which have many industry observers expecting the rest of the year to remain hot.

Mark Fields, Ford Motor Co. chief executive officer, noted the general economy appears steady, which should lead to strong sales during the second half of the years. Chuck Stevens, General Motors chief financial officer, also said the second half of the year looks very promising.

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Preliminary data suggest that July new-car sales will be up about 12% over year-earlier numbers, putting the industry on track for its best July since 2006, well before the U.S. economy began to collapse. Overall sales should reach about 1.46 million for the month, according to new forecasts from TrueCar and Kelly Blue Book, and that translates into a seasonally adjusted annual rate, or SAAR, of 16.6 million to 16.7 million, roughly a million ahead of total sales in 2013.

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May Could Bring Best Retail Car Sales in a Decade

Spending on new vehicles could set a new record for the month.

by on May.27, 2014

Big Memorial Day sales are expected to deliver strong numbers for May.

With automakers offering lavish sales for the Memorial Day weekend, industry-watchers are optimistic May will end on an upbeat note. But even before the annual holiday event, sales of new vehicles have been rocking along this month, with analysts predicting May will see a significant upturn from year-ago sales.

New light vehicle sales in the U.S. are expected to hit 1.52 million units, up 5.5% from May 2013 and a 9.5% increase from April 2014, according to TrueCar, which is predicting that the Seasonally Adjusted Annual Rate, or SAAR, will reach 16.1 million when the books are closed on May, a 6% year-over-year increase.

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Spring car sales generally are some of the year’s strongest, but industry observers are particularly relived considering the unexpectedly sharp slide in demand during this past, cold Winter.

“The industry is back to the level we expected at the beginning of the year,” said Larry Dominique, President of data tracking service ALG, and Executive Vice President of TrueCar.  “Chrysler, GM and Nissan are all benefiting from increased demand. They are showing higher sales and are able to pull back on incentive spending,” he added.

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New Car Sales Picking Up April Momentum

Warm weather, new products, rising consumer confidence are factors.

by on Apr.28, 2014

A flood of new products, like this Mercedes-Benz CLA45 AMG, has helped warm up the U.S. market after a cold winter.

As much of the country shakes off the winter doldrums and heads for what has traditionally been the year’s busiest season, sales of new cars, trucks and crossovers appear to be picking up some significant momentum.

After a frigid start to the New Year, demand has been heating up in April, according to a number of preliminary reports which see the warmer weather as one key factor – though buyers also are being lured back to showrooms by a flood of new products. And improved consumer confidence is helping, as well.

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Sales appear to be heading for the 16 million mark on a Seasonally Adjusted Annual Rate, or SAAR, for April, according to new surveys. By comparison, the industry sold 15.5 million new vehicles for all of 2013. Meanwhile, J.D. Power & Associates estimates consumers will spend $33.5 billion purchasing new vehicles this month, a record for the month, topping the $30.5 billion motorists spent in April 2005.

“Auto sales are hitting their stride as the spring selling season begins, and the pace has returned to the level expected at this stage of the recovery,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.

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As Sales Slow, Automakers Could be Heading for Incentives War

Good news for consumers could be a disaster for industry’s bottom line.

by on Feb.12, 2014

GM's move to offer more than $7,000 in incentives on its 2014 Silverado has made investors nervous about a possible incentive war.

When General Motors announced it would offer more than $7,000 in discounts on some of its big Silverado pickups the news sent many shoppers rushing to showrooms – but it also sent shivers racing down the spines of automotive investors increasingly worried that slowing sales may trigger the sort of incentive wars that trashed industry profits during the years leading up to the recent recession.

All the ingredients are there for a classic price war, automotive analysts warn. January auto sales took a sharp dip that may have been impacted by more than just the cold weather gripping the nation. In turn, there are now a growing number of vehicles piling up on dealer lots across the country, a situation that may force manufacturers to sharply increase current rebates and other incentives.

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“Rising inventory levels combined with several more waves of bad weather will result in a short-term spike in incentives,” said Eric Lyman, vice president of Editorial and Consulting for ALG, formerly known as the Automotive Leasing Guide. “The danger is that this could be the beginning of an escalating arms race for market share.” (more…)

Automakers End 2013 With Best Sales in Six Years

Optimism is the word as 2014 gets underway.

by on Jan.03, 2014

It was another "best-selling" year for the F-150 as it again captured the title of best-selling vehicle in the U.S., helping Ford to a 2% sales increase in December.

With domestic and international brands reporting solid gains in December, new vehicle sales, like the stock market, finished 2013 on an upbeat note, creating optimism about the outlook for the year to come.

While a few manufacturers have yet to report in, the industry was on track to report its best sales numbers in six years, a welcome relief after the worst industry downturn since the Great Depression. A total of about 15.5 million vehicles were purchased by U.S. motorists in 2013, and forecasts for the coming year range from IHS Automotive’s conservative 16.1 million to as much as 16.5 million or more.

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Significantly, an assortment of manufacturers finished last year reporting all-time best numbers, a list that included imports such as Audi, Subaru, Hyundai and Kia. But at least a few automakers ended 2013 on a mixed note – Toyota, for one, reporting a 1.7% drop in December sales, though it was nonetheless up 7.4% for the year as a whole. (more…)

December Likely to Bring Record Spending on New Cars

Automakers offer tempting deals to draw in buyers.

by on Dec.23, 2013

A new Ford F-150 rolls off the maker's assembly line in Kansas City, Missouri. Strong pickup demand helped boost car sales in 2013.

With millions of dollars of television commercials airing this month and millions more in incentive money on the table, automakers are expected to end the year with a bang, sales expected to be up at least 4% from December 2012 – with the industry anticipating all-time record consumer spending.

While new-vehicle sales started off slowly in December, they are expected to finish strong at the end of the month, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.  That would be good news for industry planners worried about a recent bulge in dealer inventories that’s already led several manufacturers to trim back production.

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Consumers in the U.S. are expected to spend more than $34 billion on new vehicles in December, a historic high for the month. That reflects not just the end-of-year sales burst but also record transaction prices, according to the forecast. The optimism was reinforced by a new report from the U.S. Department of Commerce which indicated the U.S. economy was expanding more rapidly than first thought. The Commerce Department now estimates the U.S. economy grew by 4.1% during the third quarter.

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Auto Inventories Bulging – Will Makers Cut Production or Launch Price Wars?

Trouble for manufacturers could be good news for consumers.

by on Dec.11, 2013

Dealers are seeing a build-up of inventory despite strong U.S. car sales.

The nation may be in the grips of a continent-sized cold spell but automotive sales continue to run hot, as they have for much of the year.  Still, November’s unexpectedly strong numbers only barely conceal the fact that manufacturers may have gotten a bit too ambitious trying to take advantage of the best new car market since before the economy went into a nosedive six years ago.

While there are a handful of hot new models, like the 2014 Jeep Cherokee and the ’14 Chevrolet Corvette, that are flying off showrooms almost as fast as they’re delivered from the factories, dealers around the country are reporting bulging inventories of many other products, such as the Acura RLX and the Ford Fusion.

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And that’s worrying industry planners and analysts alike.  In years past, the build-up would have been a recipe for trouble, makers playing a game of chicken by ramping up incentives to maintain sales and market share – even at the cost of profits. It was precisely that sort of strategy that helped nearly sink the Detroit Three as the U.S. auto market collapsed in 2009 and 2010.

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Luxury Cars, Japanese Brands Gain Big During August’s Sales Surge

Transaction prices top all-time record.

by on Sep.04, 2013

The traditionally strong selling season has proved hotter than expected this summer.

Japanese carmakers succeeded in picking up market share during August’s automotive sales boom, while surging demand for luxury cars, trucks and crossovers helped push up the vehicle prices to record levels across the board.

A sharp upturn in recent months has hit consumers squarely in the pocketbook. According to a report by TrueCar.com, the Average Transaction Price – what consumers pay factoring in both incentives and options – surged 3.2% year-over-year to $31,252.

That hasn’t kept buyers out of showrooms, however, with the industry expected to have garnered sales that, on an annualized basis would have come in at or slightly above 16 million, according to industry analysts.  Most have been raising their forecasts sharply in recent months as showroom traffic continues to defy concerns about the unsteady economy.

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“The market is continuing to pick up steam, our sales momentum is on record pace and we have two major new products hitting the market in the next few weeks,” said Steve Cannon, president and CEO of MBUSA, which saw the Mercedes-Benz brand post a 21% increase for August to stay ahead of BMW.

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Stock Market Sell-Off? June Car Sales Stay Strong

Customers paying record transaction prices.

by on Jun.25, 2013

Ford is rapidly ramping up production of vehicles like the F-Series to keep up with rising demand.

As Mad Magazine mascot Alfred E. Neumann frequently asks: “What, me worry?” it seems like the recent stock market tumble, the worsening situation in Europe and ongoing economic concerns here in the U.S. are, at most, background noise – at least to American car buyers.

Sales of new cars and trucks continue to move along at a steady clip during June, according to new estimates from J.D. Power & Associates and LMC Automotive.  A monthly sales forecast based on direct dealer data indicates new-vehicle retail sales are showing no signs of letting up at the start of the summer selling season.

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New-vehicle retail sales in June are projected to come in at 1,118,800 vehicles, which represent a Seasonally Adjusted Annualized Rate of 13.2 million units, a healthy increase of 500,000 from the May SAAR. Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles.

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May Auto Sales on a Strong Pace

Pickup trucks show particularly strong demand.

by on May.23, 2013

The surge in truck demand should be especially good for GM as it launches the new Chevy Silverado.

Sales of new vehicles appear to be holding steady during May with strong demand for pickup trucks helping set the pace, analysts are reporting.

Just how much the market will be up for the month is a matter of debate, with forecasts ranging from 6% to 9%.  Significantly, consumers are driving much of the growing demand, though fleets are also increasing sales which could be a sign of a recovering economy.

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“We’re in a nice place in terms of retail sales,” said Mike VanNieuwkyuk of global vehicle research at J.D. Power & Associates. Car sales have recovered nicely from the recession and have maintained their recent momentum, VanNieuwkyk noted during a panel discussion at the Wards Auto Interiors

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