Greater confidence and the need to replace damaged vehicles are cited
POSTED: 01:30 a.m. HST, Dec 04, 2012
DETROIT » Superstorm Sandy gave an extra boost to U.S. auto sales, making November the best month for carmakers in nearly five years.
Toyota, Volkswagen and Chrysler were among the companies posting impressive increases for November, which is normally a lackluster month because of colder weather and holiday distractions. Only General Motors was left struggling to explain yet another month of weak growth.
Industry sales rose 15 percent from a year earlier to 1.1 million, according to AutoData. That was their fastest pace since January 2008. U.S. sales would reach 15.5 million this year if they stayed at November's rate, far higher than the 14.3 million in the first 10 months of this year.
Americans are more confident in the economy, a key driver of auto sales. Home values are rising, hiring is up and auto financing remains readily available. And besides just feeling better, people need to replace aging cars or vehicles damaged by Sandy.
"Everything is kind of moving along almost in concert now," says Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area industry consulting firm.
Sandy added 20,000 to 30,000 sales industrywide last month, mostly from people who planned to buy cars during the October storm but had to delay their purchases, Ford estimates.
People who need to replace storm-damaged vehicles are expected to drive sales for several more months. GM estimates that 50,000 to 100,000 vehicles will eventually need to be replaced.
Even so, carmakers warned that uncertainty over the "fiscal cliff" could undo some of the gains.
The term refers to sharp government spending cuts and tax increases scheduled to start Jan. 1 unless an agreement to cut the budget deficit is reached between Congress and the White House. The cuts and tax increases, if enacted, could push the U.S. economy back into a recession and could derail the industry's recovery.
Alec Gutierrez, a senior market analyst with Kelley Blue Book, said a household making $100,000 per year would pay $160 more per month if the payroll tax goes up 2 percent. That's about the same amount as a lease payment on a compact car. For that reason, Gutierrez suspects some buyers are waiting to see if an agreement is reached before investing in a new vehicle.
But for now most Americans seem comfortable buying.
At Toyota, sales rose 17 percent in November, partly due to post-Sandy demand. Honda was up 39 percent thanks to strong sales of the new Accord sedan and clearance deals on the outgoing Civic, which was replaced by a new 2013 Civic at the end of the month. Volkswagen's sales rose 29 percent on the strength of the Passat sedan.
But at General Motors, sales rose just 3 percent.
GM's biggest brand, Chevrolet, reported flat sales over last year despite new products like the Spark minicar. Silverado pickup sales fell 10 percent.
GM's sales have been trailing the industry all year. They were up 4 percent through October, compared with the industrywide increase of 14 percent.
These are the top sellers for the month and the percent change in sales from November 2011: