This story has been updated to include more recent results from Volkswagen and Honda.
Sales records toppled like dominoes in November, Subaru among a number of manufacturers to set all-down highs with a month yet to go before the books close on 2015. Overall, sales are expected to be up 3.9% compared to November 2014.
Barring an unexpectedly slow December, the industry should wrap up not only its best year since the devastating Great Recession but its best year ever, with most industry analysts predicting even better numbers to come in 2016 before the U.S. car market finally starts to level off.
General Motors, Fiat Chrysler Automobiles, Ford, Nissan, Infiniti and Subaru were among the automotive brands reporting sales increases for November. While some manufacturers won’t weigh in until the end of the day, the seasonally adjusted annual sales rate, or SAAR, appeared likely to reach 18 million, boosted in part by Black Friday sales.
Not surprisingly, Volkswagen reported a 24.7% drop in November sales. The diesels it can no longer sell to U.S. consumers comprised 20% of the brand’s sales. Officials noted the company was working to quickly resolve the problems with its diesel-powered vehicles.
One surprise was the fact that Honda sales were off 5% last month, including 4% for the Honda brand and Acura sales off 18%.
“Despite having two less selling days this November (compared to 2014), FCA US still recorded its best November sales since 2000 and our 68th consecutive month of year-over-year sales increases,” said Fiat Chrysler sales director Reid Bigland. “The favorable I.O.U. environment of low interest rates, oil prices, and unemployment, coupled with our strongest product line up ever, continues to be a significant driver.”
Not only did the industry score in terms of sales, but revenues reached an all-time record, as well, according to data tracked by TrueCar. The tracking service estimates new car sales generated $44 billion in revenues for the month, up 3.8% versus the same period last year. November marked the 23rd consecutive month of record-setting revenue for the auto industry. That came despite a slight increase in incentive spending last month.
“Automakers are in a very healthy position after the close of Black Friday promotions, with nine of the top 12 manufacturers experiencing notable revenue gains,” said Eric Lyman, TrueCar’s vice president of industry insights. “Revenue in December should also be strong as it’s historically a huge month for luxury brands, ranking as the top-selling month for premium vehicles for the past six years.”
FCA’s overall 3% increase can be largely credited to recent trends in the American market, cheap gas leading many American motorists to shift from high-mileage cars to bigger, if less fuel-efficient SUVs, crossover vehicles and pickups. Significantly, the Jeep brand’s 20% increase was the largest sales gain of any FCA US brand during the month.
“The phenomenal growth of crossovers in a record-setting market is the biggest sales story of 2015,” said Kurt McNeil, GM’s U.S. vice president of Sales Operations. Demand for CUV models like the Buick Encore and Chevrolet Trax and Equinox are “far outpacing” the overall industry growth rate, added McNeil.
GM’s Chevrolet, Buick, GMC and Cadillac brands sold 229,296 vehicles in the United States in November 2015, up 2% year over year – and GM officials stressed that they would have done even better if not for a corporate decision to pull back on low-profit daily rental fleet sales.
Among the Detroit makers, Ford posted the smallest increase, a 1% gain – a relatively poor showing that led Ford to pull the plug over its unsuccessful Friends and Family sales promotion over the weekend.
But Ford’s lower incentive spending in November did yield one payoff: its average transaction prices jumped $3,800 compared to year-ago levels – the largest gain among any major automaker.
(Justice Department, VW want diesel lawsuits heard in Detroit. For more, Click Here.)
“We saw strong customer demand for our cars and SUVs with the latest technology and sold a very rich mix in November,” said Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service.
Subaru had particular reason to celebrate last month, the Japanese maker reporting it smashed through its previous yearly sales record with a month still to go. That marks the company’s eighth year of sales growth and seventh successive sales record.
While it didn’t quite set a new annual record, “Our Nissan Division delivered a record-setting November, which finished up 4% for the month, ” said Dan Mohnke, the maker’s U.S. sales chief noted. “With the all-new Nissan Titan XD set to launch later this month we expect a really strong finish for the year.”
The Japanese maker’s luxury arm, Infiniti sales also reported a 3% sales gain for the month.
(Click Here for details about Ford’s $1.3 billion investment for its new aluminum-bodied Super Duty coming next year.)
Volkswagen of America was expected to be among the few makers to report a decline for the month, and it did, indeed, suffer a 24.72% drop in November, the maker noting in a statement that, “The November sales results reflect the impact of the recent stop-sale for all 2.0-liter 4-cylinder TDI vehicles as well as for the 3.0-liter V6.”
In September, VW acknowledged it had cheated on diesel emissions tests involving the smaller engine. Late last month it also confirmed using a so-called “defeat device” on its bigger diesel, as well. In recent years, diesels had accounted for about a quarter of the German maker’s sales in the U.S.
Even so, it wasn’t a complete disaster for VW. It’s recently redesigned Tiguan utility vehicle saw an 87.7% jump in sales, and the newly updated Golf was up 2.9%.
Significantly, even though pickups and utility vehicles dominate the market, Kelley Blue Book analyst Tim Fleming noted that, “The subcompact and mid-size car segments also experienced positive month-over-month and year-over-year growth, which is promising, fueled by players such as Honda Accord and Volkswagen Golf.”
(To see more about how Ford paid for the $8,500 employee signing bonuses in the new UAW pact, Click Here.)
With few signs of trouble ahead, the U.S. auto industry is expected to maintain its momentum in December. And that means it is all but certain to smash the previous annual sales record, the 17.4 million vehicles sold in 2000.
(Paul A. Eisenstein contributed to this report.)