U.S. recorded a 12% rise in light vehicle sales to a seasonally adjusted annual rate (SAAR) of 13.1 million units in March, driven by an improvement in the employment rate.
Rising employment rate infused confidence in the buyers, especially young ones, to rush into first-time car purchases. As many as 216,000 jobs were added during the month, bringing the unemployment rate to a 2-year low of 8.8%.
Soaring gas prices influenced buyers to buy small and fuel efficient vehicles during the month. Gas prices hit $3.58 per gallon last week, the highest price ever for the period in a year.
The earthquake and tsunami in Japan did not affect light vehicle sales during the month. However, global automakers experienced a production loss of 585,000 light vehicles in March including 550,000 in Japan, according to IHS Automotive.
U.S. Automakers’ Sales
Sales at General Motors Co. (GM) rose 17% to 206,621 units, driven by an impressive sale of its newly launched small care Chevrolet Cruze. The automaker sold 18,018 Cruze during the month, surpassing the sales of its predecessor, the Cobalt, by 80%. Other hot selling models were Camaro Express (46%) and Cadillac CTS (36%).
Meanwhile, GM saw a decline in sales of some crossovers and sports utility vehicles (SUVs). Sales of Chevrolet Traverse crossover fell 4.7% while sales of Chevrolet Suburban SUV declined 24% during the month.
Ford Motor Co. (F) topped GM during the month for the second time since 1998. The automaker posted a 19% gain in sales to 212,777 vehicles during the month. Its sales were driven by small cars including Fiesta subcompact, new Explorer crossover, Fusion sedan and Escape small SUV. Ford F-Series remained the best-selling vehicle in the U.S. Its sales increased 25% to 53,272 units during the month.
Sales at Chrysler (including the namesake, Jeep, Dodge and Ram brands) zoomed 31% to 121,730 vehicles. This was the highest sales seen in any month since May 2008. The automaker’s sales growth was led by impressive sales of midsize sedans such as the Chrysler 200 and the Dodge Avenger.
Japanese Automakers’ Sales
Sales at Toyota Motor Corp. (TM) ebbed 6% to 176,222 units due to reduction in incentives. According to TrueCar.com, Toyota’s incentives decreased 23% from March 2010 and 11% from February 2011. However, Scion TC and Prius hybrids saw strong sales during the month.
Sales at Honda Motor Co. (HMC) appreciated 23% to 133,650 vehicles on sales of fuel-efficient lineups. The subcompact Fit led with a 49% increase in sales while Civic compact sales grew more than 40%.
Sales at Nissan Motor Co. (NSANY) escalated 27% to 121,141 vehicles. Sales of the Sentra compact more than doubled to 17,851 units. Other models to have a stark performance were Rogue, Juke, Leaf all-electric, Infiniti G sedan and Infiniti QX56.
Other Automakers’ Sales
Sales at Daimler AG, including Mercedes-Benz (cars, light trucks and Sprinter) and smart vehicles, rose 11% to 22,971 vehicles. Sales of Mercedes-Benz increased 13% to 22,546 vehicles on higher volumes of C-Class and E-Class, while sales of smart USA fell 37% to 425 units. Notably, retail sales of smart USA surged nearly 50% from February 2011 on the back of higher demand for fuel-efficient vehicles.
Sales at Hyundai Motor Co. soared 32% to 61,873 vehicles, mainly driven by higher sales of newly redesigned Elantra. Meanwhile, sales at Kia Motors, Hyundai’s sister company, jumped 44% led by galloping sales of new Optima midsize sedans (90%).
Given the surging gas prices and rebound in consumer confidence we expect demand trends to reflect an inclination towards smaller and fuel-efficient vehicles. This apart, new model launches, which are mostly compact and fuel efficient, will further quench the buyers’ thrust. However, we remain concerned about the aftermath of earthquake in Japan on the global automotive industry.
IHS Automotive has forecasted that if automakers fail to find alternative sources of auto parts supply, the industry would lose production of 1.2 million–1.8 million vehicles by the third week of April and 3 million units within 8 weeks, with about half of them emanating from assembly plants outside Japan. In a worst-case scenario, the loss would climb up to 5 million vehicles.