Auto sales surged in August as consumers reacted to higher gas prices by snapping up fuel-efficient cars and small sport utility vehicles.
Total auto sales for the month were just under 1.3 million, 19.9% higher than a year earlier. That would put the annual pace at 14.5 million vehicles, the best of any month since the federal “cash for clunkers” economic stimulus program in August 2009 and a rate 2 million vehicles ahead of August 2011’s.
“The auto industry continued to outperform the general economy,” said Bill Fay, Toyota group vice president and general manager.
Easier credit and the need for people to replace aging vehicles they held onto during the Great Recession and subsequent anemic recovery contributed to the trend.
Fuel-efficient vehicles were especially good sellers as gas prices neared or crossed $4 a gallon in much of the nation.
Sales of Toyota’s Prius hybrid more than doubled to more than 21,000 vehicles. The gain was helped in part by greater availability of the vehicles as an inventory shortage created by last year’s earthquake in Japan abated. The brisk sales made the Prius the ninth bestselling passenger car in America. Sales of Toyota’s Camry hybrid also soared.
General Motors Co. said its Chevrolet passenger car sales jumped 25%, with gas sippers such as the Spark, Sonic, Cruze and Volt plug-in hybrid all posting their best-ever monthly sales.
The Cruze, Sonic and Spark “were all unknown nameplates just a few years ago, but together they now almost equal the volume of Silverado,” Chevrolet’s bestselling truck and “the core” of the brand’s identity, said Jessica Caldwell, an analyst with auto information company Edmunds.com.
The consumer shift to smaller cars and SUVs is coming at the expense of large sport utility vehicles.
Sales of Chevrolet’s Suburban and Tahoe both fell by a third or more. Sales of Ford Motor Co.'s Expedition and Nissan North America’s Armada both dropped 14%.
Consumers are comparing the cost of repairing and operating older vehicles with what they would have to pay for a new vehicle, and higher fuel prices have become a tipping point, said Ken Czubay, Ford’s U.S. sales chief.
The average age of vehicles on the road now is approaching 11 years, and the fuel savings compared to a new car can be significant, he said.
For example, a driver of a 2013 Ford Escape SUV with a small turbocharged, four-cylinder engine would save about $700 a year in gas compared with a 2002 version of the Escape, according to Environmental Protection Agency fuel economy data. That grows to $1,250 a year for people downsizing from a 2002 Ford Explorer, a bigger SUV.
Likewise, Nissan’s hot-selling 2013 Altima sedan will cost a driver about $600 less a year to fuel than the 2002 Altima. The comparisons assume the vehicles are driven 13,500 miles annually at an average gas price of $4 a gallon.
GM, the nation’s largest auto seller, posted sales of 240,520, a 10% gain. Ford Motor Co. sales rose 13% to 196,749 vehicles.
Chrysler Group sales climbed 14% to 148,472 vehicles. It was the automaker’s best August sales since 2007. Chrysler’s gain was driven in part by sales of its new Dodge Dart compact sedan. Ram truck sales also were strong.
The Japanese brands continued to show resiliency from the earthquake last year that interrupted production and created inventory shortages.
Honda’s U.S. sales soared almost 60% to 131,321 vehicles.
“We’re on track to post our best yearly sales results in four years,” said John Mendel, American Honda’s executive vice president of sales.
Toyota sales rose 46% to 188,520 vehicles.
“Customer loyalty for the Asian brands turned out to be stronger than we gave credit to,” said Jesse Toprak, an analyst with auto price information company TrueCar.com. “Toyota and Honda recovered their market share losses much faster than we anticipated.”
Nissan North America sales rose 8% to 98,515 vehicles.
Hyundai Motor America, the South Korean automaker, said its U.S. sales increased 4% to 66,099 vehicles. Kia Motors America, Hyundai’s sister brand, said sales rose almost 22% to 50,028 vehicles.
Volkswagen of America said sales of its VW brand rose 63% to 41,011 vehicles, its best August since 1973.
“What you are seeing is a steady, solid recovery in the auto industry without a big spike up or down,” said Frank Trivieri, Volkswagen’s vice president of sales.