Light vehicle sales in December 2011 rose 9% to seasonally adjusted annual rate (SAAR) of 13.6 million units, driven by low interest rates (below 3%), easier credit standards, decreasing unemployment rate and pent-up demand when the average age of cars on U.S. roads is almost 11 years and used cars are worth more at trade-in.
These led to sales of 12.8 million vehicles in full year 2011, up 10% from 2010. It is also the highest sales since 2008 when the financial crisis showed up. However, it is still lagging behind sales of 16 million vehicles recorded before the recession.
Consumers were drawn to the showrooms even when the average price of vehicles is high as automakers offered attractive features in the vehicles such as navigation systems and backup cameras. The average price of vehicles went up 5% to $30,686 in December compared to the same month a year ago. Further, incentive spending dipped 3% to an average of $2,562 per vehicle during the month.
Sales by Automakers
The Detroit automakers were the big gainers during the month with Ford Motor (NYSE:F - News) and Chrysler posting double digit gain in sales. Meanwhile, the Japanese automakers, except Nissan Motors (NSANY'>NSANY), continued to lose the race on the back of disruptions caused by the twin disaster in Japan and severe flooding in Thailand last year.
General Motors (NYSE:GM - News) sales rose 5% to 234,351 vehicles, led by a 9% rise in Chevrolet brand sales to 161,158 units. Sales of the other three other brands declined during the month (Buick 12%, Cadillac 3% and GMC 0.5%).
For the full year, the automakers’ sales grew 14% to more than 2.5 million vehicles, capturing the highest market share of 19.7%. It expects full year 2012 light vehicle sales to be in the range of 13.5 million to 14 million units.
Ford’s sales escalated 15.6% to 201,737 vehicles, driven by strong sales of F-Series pickup trucks (up 24.4%) and Escape SUV (up 36.8%). For the full year, the company’s sales rose 11% to nearly 2.15 million units. For 2012, the automaker expects industry sales in the range of 13.5 million to 14.5 million vehicles.
Sales at Chrysler Group LLC – controlled by Italy’s Fiat SpA (FIATY'>FIATY) – surged 37% to 137,271 vehicles, driven by strong demand for Jeep Grand Cherokee and the Chrysler 200. For the full year, the automaker’s sales soared 26% to 1.37 million vehicles.
Toyota Motor’s (NYSE:TM - News) sales increased a tad to 178,131 units in the month from 177,488 units in December 2010. For the full year, the automaker’s sales ebbed 6.7% to 1.6 million vehicles. Sales of all its top selling models, Camry and Prius hybrid, rose 7.3% and 8.7%, respectively during the month but fell 5.9% and 3.2%, respectively during the year.
Honda Motor (HMC'>HMC) sales fell 18.8% to 105,230 vehicles during the month and 6.8% to 1.15 million vehicles during the year. Sales of its top selling sedan model, Accord, declined 17% to 235,625 units in 2011.
Nissan showed early recovery than its domestic peers. Its sales increased 8% to 100,927 vehicles during the month, driven by a 10.7% rise in Nissan brand vehicles. For the full year, its sales appreciated 15% to 1.04 million vehicles.
Daimler AG (DDAIF'>DDAIF) posted an impressive 49.5% rise in sales to 32,999 vehicles led by a strong 51% rise in Mercedes sales. Its annual sales were 272,139 vehicles.
Volkswagen AG (VLKAY'>VLKAY) sales soared 31% to 45,157 units, which is the company’s best December in the U.S. since 1972. Meanwhile, its sales went up 26% to 441,962 units in 2011 on strong demand for the Jetta and Passat sedans.
Hyundai Motor (HYMLF'>HYMLF) sales went up 13% to 50,765 vehicles during the month. For 2011, the company’s sales rose 20% to 645,691 vehicles on strong demand for the Sonata and Elantra sedans. Meanwhile, sales at Kia Motors increased 42.5% to 43,390 units in December and 36% to 485,492 units with strong demand for Optima, Soul and Sportage models.
The major automakers expect a slowdown in auto sales during 2012 due to weak employment growth and risks to the U.S. economy emanating from the Eurozone crisis. However, we believe the strong pent-up demand and low interest rates will continue to boost the industry sales in this year just as they did in the last two months of 2011.
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