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U.S. Auto Sales Hit $3B Mark in August

A newly released government report showed U.S. auto sales reached $3 billion in August, largely on the strength of government incentives such as the Cash for Clunkers program. Several automotive manufacturers experienced double-digit sales increases as trade-in incentives pushed overall industry sales to the first year-over-year increase in almost two years—all welcomed news to industry analysts.

The performance breakdown of U.S. auto sales in August is as follows: Ford Motor Co. reported a 17% jump in monthly sales. Highlights included encouraging sales of the F-series, a large pickup truck popular among building contractors, which rose for the first time since October 2006. Ford sold 13% more of the F-series and 57% more units of the smaller Ranger model.

Sales were also up at Hyundai, which posted a 47% increase. Additionally, Honda achieved a 10% uptick while rival Toyota Motor Corp sales were up 6%. On an annualized basis, industry-wide U.S. sales topped 14 million units, according to Autodata. By comparison, the industry reached its heyday about nine years ago, when sales reached a record 17 million units.

The flip side: At GM and Chrysler, companies that have been working to regroup after recently emerging from bankruptcy, sales declined 20% and 15%, respectively. Meanwhile, revenues at Nissan Motor Co. were off 3% year over year.

While analysts credit the bulk of the automotive retail activity to the Cash for Clunkers program—which reportedly resulted in the collection of more than 690,000 vehicles slated for scrappage—industry watchers also reported brisk sales of cars that did not qualify for the program.

August’s results also reflected a shift in market share. GM, for instance, saw its share of sales of its core brands—Chevrolet, Cadillac, Buick and GMC—drop to 16.3% cent of the U.S. market during the month. Meanwhile, Toyota’s share stabilized at 17.8%, analysts’ estimates show.

GM, though, is not discouraged. In fact, the company recently announced plans to boost North American production and has earmarked funds for an lithium-ion battery plant  to supply the heart of its Chevy Volt electric cars.

Focusing on the Positive

GM is not overly concerned about the year-over-year blip, and is instead focusing on the momentum it is building at GM dealers in the United States delivered 246,479 vehicles—far and away the company's highest total and retail sales performance of 2009, the company said. Indeed, the August total, when compared with a very strong sales performance in August 2008 and lower fleet sales this year, was down 20%. More specifically, retail sales were down 17% while fleet sales declined 29%. However, when comparing GM's strong August total sales with July, volume was up more than 57,000 vehicles, or 30% month-over-month.

"The Cash for Clunkers program was certainly a success, but our momentum continues to build on the strength of our new cars and crossovers such as the Chevrolet Malibu, Equinox and Camaro,” said Mark LaNeve, vice president, U.S. sales, GM. “Now we have the Buick Lacrosse, Cadillac SRX and GMC Terrain hitting the market."

While LaNeve believes the Cash for Clunkers program was a strong shot in the arm for the economy and that GM’s four core brands—Chevrolet, GMC, Buick and Cadillac—he said GM is well positioned with new products to take advantage of the ongoing recovery in the market. “Our new vehicles are contributing to our stable share performance for the past five months, running in the 20% range," he said.

When compared with July's retail performance, there were several product highlights in August for GM's core brands: Core brand sales of Chevrolet, Buick, GMC, and Cadillac models increased 29%, with retail sales increasing 21% month over month.

Chevrolet retail sales increased 28%, as Chevrolet Aveo, Cobalt, Impala, Malibu, and Camaro contributed to a Chevrolet car retail increase of 53%. According to GM, Aveo had its best sales month ever while Chevrolet truck sales increased 13%, led by increases by Silverado, Colorado, HHR, and the all new Equinox and Traverse.

GMC retail sales increased 3%, with the Canyon mid-pickup realizing a total sales increase of 51%. The Sierra pickup and Acadia crossover also reported retail increases compared with the prior month.

GM also alluded to the success of its eBay Program, which has been extended in the state of California. Thanks to the pilot program, n early 4,000 shoppers negotiated a new vehicle price with our California dealers in the first three weeks of its launch. "We're very pleased with the sales performance in our Western region, basically the western third of the country, where sales were up more than 41% compared with July,” LaNeve said. "We've put a lot of advertising into the California eBay project, and it appears customers are responding.

A total of 1,708 GM hybrid vehicles were delivered in the month. So far, in 2009, GM has delivered 11,544 hybrid vehicles.

Source: Economic Times, The New York Times, General Motors

 

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