Hybrid sales up, but Toyota takes a pounding on models like the Tundra pickup.
With gasoline prices creeping upward, small cars flew out of showrooms during March even as prices began to climb.
The overall rate of sales climbed 13% to produce a seasonally-adjusted annual sales rate, or SAAR, of 13.2 million units, which is slight above earlier the industry’s forecasts. A strong economy, rising employment and heavier advertising schedules also appear to have contributed to the increasing sales.
The month brought several surprises, including a sharp downturn at Toyota and a reversal of the normal pecking order among Detroit makers.
Ford outsold GM for only the second time since 1998, buoyed by demand for such new models as the 2011 Explorer. (Click Here for more on the GM-Ford fistfight.) Meanwhile,Chrysler enjoyed its best sales for any month in almost three years while GM still managed to post a double-digit increase. Audi and Nissan reported had record sales, while Honda’s sales increased by 19%.
But after seeming to get momentum moving in the right direction during January and February, however, Toyota took more lumps, overall volume dropping 5.7%, despite a 52% increase in sales of the Prius and stronger than expected sales of the fuel-efficient Corolla.
The sharper-than-expected slump calls into question Toyota’s plan to raise prices an average 2.2% on May 1st – (Click Here for more) — while many dealers are tacking on surcharges of their own hoping to take advantage of the production shortages anticipated due to the crisis in Japan.
Customers came to Toyota looking for fuel efficiency, said Toyota vice president Bob Carter, who said the earthquake on Japan had no impact on March sales totals.
The fallout from the deadly earthquake could have an impact on supplies of certain vehicles in the future but Toyota heads into April with ample inventory, Carter said.
Toyota, though, is continuing to lose ground to GM, Ford and Chrysler in the truck market. Tundra sales dropped 20%. More incentive money will be shifted to the Japanese maker’s pickup trucks, officials said. Overall prices of vehicles were climbing in March as manufacturers reduced incentives, following the earthquake in Japan.
Chrysler reported U.S. sales of 121,730 units, a 31% increase compared with sales in March 2010. Long dependent on sales of trucks and sport utility vehicles, Chrysler’s passenger car sales improved by 46% versus a year ago, Chrysler said.
Sales of the new 2011 Dodge Avenger increased 92% compared with a year ago, while sales of the new 2011 Chrysler 200 midsize sedan, which starred in the Chrysler brand’s popular Super Bowl ad, posted a 191% sales increase.
“Our pickups and sport-utilities have been strong performers in the market, and now we are seeing our cars gaining momentum in the marketplace as well,” said Fred Diaz, president and CEO-Ram Truck Brand and lead executive for U.S. Sales.
Ford’s March sales totaled 212,777, up 19% versus a year ago as the subcompact Fiesta set a U.S. record as monthly sales reached 9,787 in March.
“With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service.
“Customers are rewarding Ford for our investment in new products as well as more efficient engines and transmissions, which save them money at the pump whether they drive Fiestas or F-Series trucks,” Czubay said.
Ford is benefiting from its investment in new powertrains, which is helping the company gain sales outside the company’s traditional area of strength such as California, Czubay said.
Ford sales analyst George Pipas said sales of subcompact and compact B- and C-segment vehicles have climbed steadily since December when they accounted for 19% of the automaker’s U.S. sales. In January and February, they accounted for 21% of sales and in March they reached 25%. The small car share seems to have stabilized in the last three weeks of the month, but supplies are pinched, Pipas said.
Meanwhile, sales of utility vehicles have dropped 4 points, to 29% of the U.S. market, since December. And pickup truck sales dropped from 13% to 10%.
The overall appeal of Ford’s small cars and fuel-efficient vehicles helped Ford overtake rival GM during March.
“As we predicted, Ford outsold GM this month. Ford increased incentives spending despite the fact that most other automakers posted a decrease. However, having strong entries in subcompact, compact and small SUV really helps when gas prices soar,” said Edmunds.com Senior Analyst Jessica Caldwell.
GM reported its sales increased by 12% during March and for the first three months of 2011 total sales increased 26% to 592,545 units, compared to a year earlier.
“Our plan was to get out of the gates quickly in the first quarter and we succeeded,” said Don Johnson, vice president, U.S. Sales Operations. “Consumers responded favorably to the value of our broad lineup of fuel-efficient cars, trucks and crossovers,” he said.
In the first quarter, fleet sales represented 24% of the company’s total sales volume, compared to 30% in the first quarter of 2010.
“Vehicles like the Chevrolet Cruze and Equinox put us in great position to benefit from consumer’s increasing desire for fuel-efficient vehicles,” Johnson said.
Luxury carmakers such as Jaguar/Land Rover and Porsche also posted double-digit sales increases as did BMW and Mercedes-Benz. Volkswagen subsidiary Audi, which last year topped 100,000 sales in the U.S. market for the first time, said March sales reached another record.