Small-car sales in state are picking up speed
Small just keeps getting bigger in the California auto market.
Buyers reacted to high gasoline prices by continuing to shift their allegiance during the third quarter to foreign-brand models with a reputation for fuel efficiency.
The move further underscored the state’s love affair with import brands, which have accounted for almost 60% of sales of new cars and trucks in California this year, according to a study released Thursday by the California Motor Car Dealers Assn.
Small cars such as Toyota Motor Corp.’s Yaris subcompact sedan and hatchback and Honda Motor Co.’s Civic compact sedan and coupe have been the fastest-growing segment in the retail auto market through September.
Sales of compacts rose by 1.5% and subcompact sales were up about 1% from a year earlier, the dealer group reported in its quarterly California Auto Outlook.
Truck sales were down in almost every category except compact pickups, luxury sport utility vehicles and compact SUVs.
The foreign brands’ large and growing lead over domestic cars and trucks here is particularly telling, said economist Jeff Foltz of Auto Outlook, because California’s new-vehicle market is expected to shrink this year and next before sales begin climbing to a record in a recovering economy in 2009.
That means that the domestic brands of automakers General Motors Corp., Ford Motor Co. and DaimlerChrysler will shrink even further in California as foreign makes continue a decades-long growth trend and the Detroit Big Three continue reducing production as they restructure their troubled North American operations.
“We’re just seeing more of the well-documented decline of the domestics,” said Foltz, whose Malvern, Pa., consulting company prepares the dealer association’s forecast.
Led by Japanese juggernauts Toyota and Honda, foreign brands’ market share in California grew 4.7% in the first nine months, the report showed.
The report projects a 2.9% decline in new-vehicle sales in California this year, to 2.09 million cars and trucks, and a further decline to about 2 million next year.
“It’s the impact of a soft housing market, this year’s interest rate increases and some consumer uncertainty,” said Peter Welch, president of the dealer group.
One result of the declining sales and the shift to smaller, generally less expensive vehicles will be a decline in the motor vehicle sales tax revenue so important to California’s ever-stressed budget.
Pickups and SUVs accounted for 45.2% of new-vehicle sales in the state through September, compared with 52.4% nationally.
Those big trucks “represent more potential profit to dealers” than smaller vehicles, Welch said. “So dealer profits are likely to be down this year.”
Domestic brands did hang on to the lead in California sales in five of 16 market segments. Ford’s F-150 remained the bestselling large pickup in the state with 36.5% of that market, and the automaker’s Mustang was the top-selling sporty compact. GM led two categories with the Chevrolet Tahoe full-size sport utility vehicle and the Chevy Express full-size van. Chrysler’s 300 was the bestselling large car.
Toyota’s Camry mid-size passenger car was the overall top seller in the state, with 52,898 sold through September, ahead of Ford’s F-Series at 51,414.
Toyota models, including its Scion and Lexus brands, were bestsellers in five categories; Honda models, including Acura, took three top places.
Among other foreign makes, Nissan, Mercedes-Benz and BMW each led one category.
Of the Asian automakers, only Nissan Motor Co., and South Korea’s Hyundai Motor Co. and Kia Motors Corp. registered market-share declines.
The dealer association numbers are compiled from data supplied by AutoCount, a unit of credit information firm Experian Information Solutions Inc.
