U.S. auto sales off to a strong start
Small is beautiful — again.
With gas prices rising and a host of new compact cars to choose from, Americans are increasingly buying smaller cars and hybrids, new sales figures show.
“Fuel prices are certainly top of mind with all consumers right now. We hear this in the showrooms every day,” said Bob Carter, Toyota Division group vice president and general manager.
Toyota Motor Corp. sold almost 11,000 Prius hybrids in the U.S. last month, more than a 25% increase from a year earlier.
Sales of Nissan Motor Co.’s subcompact Versa rose 47% in January from a year earlier. BMW’s Mini Cooper sales were up more than 22%.
Shoppers bought more than 12,000 of Chevrolet’s new Cruze compact sedans last month, almost 5,000 more than the Cobalt model it replaced.
Auto electronics consultant David Ouwerkerk, who lives in Torrance, bought a Cruze from a dealer in Northridge in late January. He said he was “looking for a car that got good gas mileage and was well done.”
Ouwerkerk, who considered but then rejected the larger Chevrolet Malibu, often travels 80 miles round trip to clients in Orange County.
Ford Motor Co. said sales of its Focus compact sedan jumped 41%, even though it is about to be replaced by a new generation of the car that reviewers are saying is a large improvement from the previous model.
“For the Focus we know that fuel economy is the No. 1 purchase reason, said Ken Czubay, Ford’s U.S. sales chief.
The market for small cars should strengthen throughout 2011, said Jeff Schuster, an analyst at J.D. Power & Associates. They always get a boost from rising gas prices, he said, and automakers are launching a new fleet of attractive models.
The Cruze entered the market late last year. Ford is about to launch its new Focus. Hyundai Motor Co. has a new generation Elantra ready to hit showrooms. And later this year, Honda Motor Co. will start selling a new version of its Civic. The car it replaces was the bestselling compact in America in 2010.
The sales are coming at the expense of larger sedans and sporty cars. Sales of the Ford Mustang and the Chevrolet Camaro were down for the month, as were the Buick LaCrosse, Nissan Maxima and the Ford Taurus. Truck and sport utility vehicle sales remain strong.
Nissan said winter storms in regions where mid-size sedan sales are typically strongest kept some buyers out of showrooms and helped skew the numbers toward small cars.
Carter of Toyota said the automaker is planning for national gas price averages of about $3.50 a gallon this year, with spikes and dips at various points.
“We could see $4 in some markets,” he said.
After ending 2010 at levels not seen in three years, retail gasoline prices leveled in recent weeks. But unrest in Egypt and elsewhere in the Middle East sent oil prices higher.
The national average for a gallon of regular gasoline fell by 0.9 of a cent over the last week to $3.101, according to this week’s Energy Department’s national survey of service stations. But that was still 44 cents higher than it was the same week a year earlier. In California, the average rose 0.7 of a cent to $3.364 a gallon, 38.9 cents higher than a year earlier.
A survey by auto price information company Kelley Blue Book found that 61% of the respondents say that they have changed their driving habits as a result of rising gas prices, and many indicate they are considering making trade-offs on their next vehicle choice to save money on fuel.
Forty-eight percent said they would consider a smaller engine size in their next vehicle to deal with rising gas prices, according to the survey. Also, 36% said they would pick a smaller vehicle, such as moving from a mid-size car to a compact car, and 31% said they would move to a more fuel-efficient auto category.
Kelley Blue Book said consumers start to think about changing auto buying habits once gasoline prices cross about $3 a gallon. When it hits $4, about 80% of consumers say gas prices will alter their purchase decisions. And by $5 a gallon, the sentiment is almost universal.
Demand for small cars is increasing in tandem with overall auto sales.
The industry sold almost 820,000 vehicles last month, up 17.3% from the same period a year earlier, according to Autodata Corp. That puts the industry on a seasonally adjusted pace of selling about 12.6 million vehicles this year. U.S. sales reached 11.6 million vehicles in 2010.
“More people are purchasing vehicles because they want to buy them rather than because they need to buy them,” said Jesse Toprak, an analyst at TrueCar.com. “That’s great news for the industry’s continued recovery.”
General Motors Co.’s January sales in the U.S. rose 22.7% to 178,896 vehicles, according to Autodata.
GM was the only major automaker not to pull back on marketing and promotions spending last month. That would help explain its robust sales, said Jessica Caldwell, an analyst at auto information company Edmunds.com.
“General Motors’ incentive spend in January certainly raises some eyebrows,” said Caldwell, who noted that the incentives continued even as the company sold 2011 model-year vehicles. “This suggests that their new model-year vehicles are more heavily discounted than one might expect,” she said.
Ford’s sales rose 13.2% to 126,981 vehicles. It also had a big retail month, with showroom sales up 27% compared with the same period a year earlier. The automaker’s sales grew despite the discontinuation of its Mercury brand at year’s end. Mercury sold almost 5,500 vehicles a year earlier.
Chrysler Group sales rose 22.7% to 70,118. The automaker was helped by selling 7,612 of its new generation Jeep Grand Cherokee in January, a 130% increase in sales from a year earlier for the Jeep it replaced.
Toyota’s U.S. sales rose 17.3% to 115,856 vehicles. Nissan North America said its sales rose 14.8% to 71,847. American Honda Motor Co. sales rose 13% to 76,269.
