September was supposed to a lukewarm month for auto sales with expectations that the languishing economy would keep consumers on the sidelines. During the final week of the month, however, it appears new car buyers pushed those concerns aside and headed to dealer showrooms.
The result was a dramatic surge in sales at domestic manufacturers Ford Motor (F) and Chrysler Group, which reported significant year-over-year gains of 46% and 61%, respectively -- well ahead of analyst expectations. General Motors, meanwhile, recorded a 10.5% rise, in line with forecasts.
"People seem to be saying, 'It's not as quite as scary anymore,'" says Arthur Wheaton, automotive analyst at Cornell University's ILR School. With September sales now in the books, manufacturers are on track to sell about 11.7 million vehicles for the 2010 calendar year. Though well below the 16 million to 17 million in annual sales seen in the mid-2000s, the 11.7 million rate "is still pretty strong for what it has been," Wheaton said.
Demand at Detroit's Big Three domestic automakers was driven in part by a pick up in sales of pickup trucks. GM noted that sales of its Chevrolet Silverado and GMC Sierra pickup lines rose 65.9% and 52.9%, respectively, while Ford said its F-Series gained 40%. At Chrysler's newly formed Ram truck division, sales of pickups rose 26%, the company said.
"A lot of those are for businesses," Wheaton says, suggesting that business owners are willing to rejoin making capital investments.
In addition to trucks, consumers last month were keen on purchasing crossovers, a growing segment comprised of vehicles that offer the utility of an SUV with more car-like handling and fuel economy. For example, among its compact crossover group, GM said sales rose 101% compared to a year ago, while Ford reported a 186% rise in sales of its Ford Edge crossover.
For the month, GM overall sold 173,155 vehicles, compared to 156,673 in September 2009. Within its four core brands -- Buick, Cadillac, GMC and Chevrolet -- GM said sales rose 22% year over year.
GM said sales were helped by a quick model-year transition to 2011 models, noting that the change was a "dramatic departure" from last year's changeover. Of GM's retail sales in September, 53% were 2011 model year vehicles-- nearly double last year's 27%.
Ford and Chrysler
Ford, meanwhile, credited a "balanced portfolio" of vehicles, noting that sales of each of its models rose compared to a year ago, with the exception of its venerable Ford Explorer midsized SUV, a replacement for which is set to debut later this year. For the month, the Dearborn, Mich., automaker sold 160,873 Ford, Mercury and Lincoln models.
Ford's market share also increased in September, marking the 23rd time in nearly as many months that its share of the retail market increased. The company is on track to gain market share for the second year in a row -- a result not achieved since 1993, it said.
"The key to our success in the U.S. market is the relentless cadence of new vehicle, powertrain and technology introductions," said U.S. sales chief Ken Czubay,
Chrysler said it sold a total 100,077 vehicles, up from 62,197 a year ago. The struggling Auburn Hills, Mich., company said September marked the sixth consecutive month of year-over-year sales increases, and the second month this year that sales exceeded 100,000 units.
"We will continue to build sales momentum this fall as a slate of new product begins arriving in our dealerships," said U.S. sales chief Fred Diaz in a statement. "Consumers soon will be able to see more of our all-new and significantly-refreshed vehicles in our dealerships."
Among models consumers can soon expect to see in dealer showrooms are the new 2011 Chrysler 200, which replaces the frumpy Chrysler Sebring, and a new Dodge Durango SUV. Also due this quarter are revamped versions of the Jeep Patriot and Wrangler, as well as the fresh iterations of the company's iconic minivans -- the Chrysler Town & Country and Dodge Grand Caravan.
Other soon-to-be available models include the 2011 Dodge Charger and Avenger, Chrysler said. In total, Chrysler this year is introducing 16 all-new or refreshed vehicles, representing 75% of its lineup.
Asian and European Producers
Beleaguered Toyota Motor (TM) said its September sales rose 16.8% to 147,162 units, marking the seventh straight month it sold fewer cars in the U.S. than Ford, which Toyota routinely outsold during the last three years. Sales of namesake Toyota brand vehicles rose 20.5%, but those at its luxury Lexus division slipped 5.5%, Toyota said.
The numbers suggest that Toyota, for the meantime, is relegated to the No. 3 sales spot in the U.S. Not only has Ford managed to surpass Toyota, analyst Wheaton says, it's nipping at GM's heels, noting that Ford sold only about 13,000 fewer vehicles than GM did in September. That cuts more than in half the 40,000 vehicle lead GM held over Ford in September 2009, he says.
Toyota sales have been hurt by a series of safety recalls, the bulk of which are related to unintended acceleration. Though the company has recalled some 8 million vehicles to fix the problem, continued press coverage of the fallout from the recall continue to hammer Toyota's carefully crafted image for safety and quality.
Though many car companies have benefited from Toyota's woes, none have more so than Honda Motor (HMC), which said sales rose 26% compared to a year ago. Among begin sellers was its large Accord sedan -- a direct competitor to Toyota's popular Camry. Accord sales rose 16% to 24,127 for the month, while those of the Civic compact rose about as much to 18,637 units, Honda said.
"Both Honda and Acura Divisions have car and light-truck products with significant momentum in the marketplace," said John Mendel, executive vice president of sales for American Honda. Acura sales rose nearly 48% in September, giving the luxury-vehicle division its eighth successive month of sales gains. Honda sales nonetheless failed to live up to analyst forecasts of a gain of 37%, according to Edmunds.com.
As anticipated, Hyundai Motor set a sales record for the month, selling 46,556 vehicles, a gain of 48%. Hyundai sales were driven in part by a dramatic increase in demand for the restyled Sonata midsized sedan, which went on sales earlier this year. Sales of the Sonata, some of which are subject to a recent recall to address steering problems, rose 161%, the South Korean automaker said. Another big gainer was the small Tucson SUV, which recorded a 725% sales rise.
The story was similar at Hyundai sister make, Kia Motors, which also recorded an all-time sales record for September. Kia's 39% sales jump was by strong demand for the 2011 Sorento. Some 10,000 copies of the midsized crossover vehicle were sold, accounting for a third of Kia's 30,071 in sales during September.
Nissan Motors (NSANY) said sales rose 34% to 74.205 units versus 55,393 in the year-ago period. Nissan brand vehicle sales rose 35% for the month, while sales of Infiniti vehicles rose 25.6% over a year before. For the year, Nissan said its sales have risen 16%
Among other Asian makes, Subaru said it posted its best-ever sales in September, driven higher by strong demand for its Outback and Forester SUV models. Overall, Subaru said, sales rose 47% to 21,432 units, compared to 14,593 vehicles in September a year ago. Mazda Motor, meanwhile, reported sales advanced 30.5% to 18,580 units.
German automaker Volkswagen said U.S. sales rose 15% to nearly 20,000 units for the month compared to a year ago. Mercedes-Benz outsold Volkswagen in the U.S. by about 1,000 vehicles, selling nearly 20,700 cars and trucks, 22% ahead of last year and recording its best sales month this year.
BMW Group, which sells both BMW and Mini models in the U.S., reported sales rose 20.5% in September to 23,112 vehicles. Year-to-date, BMW sales have risen 7.2%.
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