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Can Makers Maintain October’s Sales Momentum?

Best month since August 2009 – trend or an aberration?

by on Nov.01, 2011

Kia sets another sales record, as did Audi and several other makers.

Sales of new vehicles once again showed considerable strength during October after a slow summer that had many worrying the industry – along with the overall U.S. economy – might be heading into a double-dip recession.

With collective sales coming in at an annualized rate of about 13.3 million, October was the best month since August 2009, at the end of the Cash-for-Clunkers program, according to J.D. Power and Associates.  But the question nagging industry leaders and analysts alike is whether October’s strong performance was merely an aberration or the beginning of a long-desired upward trend in a market still recovering from its worst downturn since the Great Depression.

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Several manufacturers, including Audi, reported records for October, while Honda broke out of a long slump and, with Chrysler leading the way, Detroit’s automakers continued to report better sales.

However, Toyota suffered another setback last month as overall sales dropped 4.3% despite larger inventories and rising incentives as well as what Toyota executives described as a strong start for sales of the new Camry.


Auto Sales Boom in October

VW, Chrysler set a torrid pace in a hot month.

by on Nov.01, 2011

Volkswagen delivers a torrid sales story for October driven by demand for new models like the 2012 Passat.

While a number of automakers have yet to report October numbers it appears the industry is getting the sort of turnaround it has long been waiting for – preliminary data suggesting the U.S. market hit its strongest level last month since the end of 2009’s Cash-for-Clunkers program.

Domestic makers did well in September, despite a softening at General Motors, but Volkswagen set the market ablaze with a nearly 40% increase suggesting it has finally found the sweet spot with products like the new Passat and Beetle.

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Volkswagen of America’s 39.6% sales gain marked the best October the maker has had since 2001. VW sales are up 23.8% for the first 10 months of this this year – meaning the maker has already surpassed its 2010 full-year sales total.

The Chattanooga-built Passat launched with sales of 5,040 units, the most Passats VW has sold since December 2005 while VW also sold 1,516 of the new 2012 Beetles which is still ramping up production. The real performer, however, was Jetta which generated sales of 13,058 units, a 51.5% increase year-to-date.

“As the all-new Passat and Beetle start to enter the market place, demand for Volkswagen vehicles has already exceeded last year’s annual volume in the first 10 months of the year, ” said Jonathan Browning, President and CEO, Volkswagen Group of America, Inc. “With the right products in the heart of key segments, and now the most Insurance Institute for Highway Safety’s Top Safety Picks in the industry, our momentum continues as customers are increasingly recognizing and embracing the quality and value of our vehicles.”

Another double-digit gain was reported by Chrysler Group LLC, which has seen some of the strongest gains by a domestic automaker all year.  For October, it reported a 27% increase compared with year-earlier sales, making this the company best October since 2007.  That was all the more significant considering Chrysler has been trimming back on its traditionally hefty incentives.

The smallest of the Detroit makers is meanwhile putting more emphasis on the retail side of the business, where sales were up 40% in October. Chrysler Group has now beaten the average industry sales increase in nine of the first 10 months of this year.

“In what is turning out to be a strong new vehicle sales industry we continued to outperform,” said Reid Bigland, President and CEO – Dodge Brand and Head of U.S. Sales. “For October, our retail sales increased 40% year-over-year with sales of the Chrysler 300 more than doubling and Jeep

Compass sales increasing fivefold. The month of October also marked our 19th-consecutive month of year-over-year sales gains.”

Overall, GM posted a 2% sales increase, compared with October, 2010. Demand for the Chevrolet Volt topped 1,100 units for the first time since the plug-in hybrid’s introduction last autumn suggesting it has the potential to tap into pent-up demand for Volt. But sales of the plug-in are still running below the level needed to reach its full 2011 sales target of 10,000.

Like Chrysler, the nation’s biggest automaker has been placing more emphasis on the retail side of the market, where sales increased 3% last month. Retail deliveries accounted for 77% of GM sales in October, even as deliveries to fleet customers were essentially flat.

“Chevrolet led the way for GM in October driven by the continued success of the Cruze and Equinox,” said Don Johnson, vice president, U.S. Sales Operations. “Chevrolet, Buick, Cadillac and GMC have all performed well this year, which has set the stage for our transition to a higher mix of 2012 model-year vehicles. Combined with the launches of several new fuel-efficient cars, including the Chevrolet Sonic and Buick LaCrosse eAssist, we are very well positioned going forward.”

In October, GM’s year-over-year passenger car sales increased 4%, crossover sales decreased 1% and sales of trucks, which include full-size pickups, vans and SUVs, increased 2%. For the month, 2012 models accounted for 80% of passenger car sales and about half of truck and crossover sales.

October Auto Sales Could Be Best in Over 2 Years

Analysts anticipate best month since Cash-for-Clunkers.

by on Oct.31, 2011

The Chrysler 200 has been scoring big gains for the smallest of the Detroit makers.

If American consumers are reining in their spending that’s news to new car dealers who appear to have rang up one of the best months since the deep recession began three years ago.

Preliminary data suggests that the annualized sales rate for October could approach a relatively torrid 13.4 million to 13.6 million, an increase of as much as 15%, year-over-year – and a sign that momentum may be returning to the automotive market.

In recent weeks, industry analysts have been steadily paring back their forecasts for all of 2011 to less than 13 million.  With just two months left in the year, the apparent surge could bode well for 2012, however.

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“Consumers are no longer dragging their feet on new vehicle purchases as they feel the economy is moving in the right direction, ” said Jesse Toprak, Vice President of Industry Trends and Insights for “This will be the fifth straight month where SAAR (the Seasonally Adjusted Annual sales Rate) will rise and the highest we’ve seen in over two years.“

Since August 2009, in fact, and that month’s sales were heavily inflated by the government-funded Cash for Clunkers program.