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What’s driving vehicle sales in California?

The Honda Civic was the bestselling vehicle in California during the first quarter.
(Myung J. Chun / Los Angeles Times)

The car industry’s winning streak in California continues.

For the first three months of this year, registrations for new cars sold exceeded 500,000, a 3.8% improvement over the first quarter of 2015, marking the 22nd consecutive year-over-year increase in quarterly registrations.

The state is on track to top 2 million new vehicle registrations for the second straight year.

“We’re a car state,” said Brian Maas, president of the California New Car Dealers Assn., which released the new figures last week. “Passenger cars are king.”

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The car-buying rally is due a number of factors, including plenty of pent-up demand on the part of drivers to replace what they are currently driving.

Maas said the average vehicle on California’s roads is 11 years old — a much higher age than cars and trucks in most other states.

In addition, low interest rates, aggressive lease programs from dealers, low gasoline prices and a generally better economic picture offer additional incentives.

“Combine all that and it’s really a good time to buy a vehicle,” Maas said.

Light trucks led the way, with a 12.5% increase over last year. The Ford F Series pickup took nearly one-third of the market share for full-size trucks, with 10,986 registrations through March.

In Los Angeles and Orange counties, first-quarter sales rose 5% for the year-earlier period, representing a 0.8% decline in car sales but a 15% increase in truck sales.

Southern California purchases were up 4.4%, while sales in Northern California rose only 1.9%

The used vehicle market saw solid growth, up 11.7% across the state.

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It was a much different story seven years ago, when dealers got socked in the immediate aftermath of the Great Recession.

In 2009, barely more than 1 million cars were purchased, only half of what the current market is selling.

But for all the good news, the 22-quarter winning streak may end soon as demand for new cars tapers off.

This quarter’s 3.8% rise pales in comparison with quarterly increases that often topped 10% as the economy recovered. For example, the third quarter of 2012 saw a 34.2% surge over the previous year.

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“We can’t continue to keep up that pace of improvement forever, so it makes sense it’s going to ease,” Maas said.

While the nation’s top-selling vehicle is the Ford F-150 pickup, the bestselling vehicle in California is a subcompact, the Honda Civic, which racked up 20,790 registrations in the most recent quarter.

The Civic was also the bestselling used car in the state.

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Among some of the other big winners in the report: Buick, which saw a 90.7% increase over the first quarter of 2015, and Volvo, which was up 75.9%.

Fiat experienced a 34.3% sales drop and Mitsubishi fell 34.1% in the first quarter.

The CNCDA report also showed signs how the low global price for oil — which leads to low prices at the pump — keeps hurting sales for hybrids, plug-in hybrids and electric vehicles.

After reaching almost 7% of market share in 2013, hybrid registrations in California have steadily slid to just below 5% in the most recent quarterly report.

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National numbers have been even more pronounced.

There was some good news for Tesla though. Its Model S was the top seller in the “luxury and sports” segment in California for the first quarter of 2016, with 2,552 registrations, edging out the Mercedes E-Class.

rob.nikolewski@sduniontribune.com


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