Kia sets another sales record, as did Audi and several other makers.
Sales of new vehicles once again showed considerable strength during October after a slow summer that had many worrying the industry – along with the overall U.S. economy – might be heading into a double-dip recession.
With collective sales coming in at an annualized rate of about 13.3 million, October was the best month since August 2009, at the end of the Cash-for-Clunkers program, according to J.D. Power and Associates. But the question nagging industry leaders and analysts alike is whether October’s strong performance was merely an aberration or the beginning of a long-desired upward trend in a market still recovering from its worst downturn since the Great Depression.
Several manufacturers, including Audi, reported records for October, while Honda broke out of a long slump and, with Chrysler leading the way, Detroit’s automakers continued to report better sales.
However, Toyota suffered another setback last month as overall sales dropped 4.3% despite larger inventories and rising incentives as well as what Toyota executives described as a strong start for sales of the new Camry.
The flagship Toyota Division posted October total sales of 115,954 units, a decrease of 3.2% on a daily sales rate basis from October 2010 but up 4.7% from September 2011 – when the maker was still struggling to resume production and rebuild inventories in the wake of Japan’s March earthquake. On a raw volume basis, Toyota Division sales were down 6.7% from the year-ago month.
The Lexus Division reported total sales of 18,092 units, a decrease of 10.9% on a DSR basis from October 2010, and up 16.0% from September 2011. Volume-wise, Lexus Division sales were down 14.2% over last October. In response to the declines, Toyota plans to launch its annual Christmas sales drive this week rather than waiting until Thanksgiving. Lexus also is launching its annual Christmas sales drive now rather than waiting until December.
In an interview with TheDetroitBureau.com, Toyota’s top American executive, Jim Lentz, said he believes the maker is now in recovery mode. But despite October’s numbers, he is less certain about the U.S. automotive market.
“I still see an economy that’s stalled and I still don’t see an auto market that’s accelerating,” he cautioned. “I think consumers are still being very cautious about investing in new cars.”
Among other Japanese makers, Honda began to show a clear recovery from its own production and inventory problems – though the maker wrapped up October with more bad news, revealing that flooding in Thailand will lead to shortages of key microprocessors that will, in turn, force sharp production cuts for November.
Meanwhile, Nissan, the only Japanese Big Three maker to largely sidestep the impact of the March disaster, reported an 18% gain for October – and 22% for the Nissan brand, itself. For the year, the maker is up 17.2%, making it one of the fastest-growing brands in the U.S. market.
On the domestic side, Chrysler was a big winner posting a 27% increase compared with sales in October 2010 — and making this the best October since 2007 for the long-troubled maker even while it was trimming incentives.
The increase was driven by a 40% increase in retail sales. Chrysler Group has now beaten the average industry sales increase in nine of 10 months this year, Chrysler officials said.
“In what is turning out to be a strong new vehicle sales industry we continued to outperform,” said Reid Bigland, President and CEO – Dodge Brand and Head of U.S. Sales. “The month of October also marked our 19th-consecutive month of year-over-year sales gains,” Bigland added.
Several other automakers also posted strong sales for the past month.
Kia, Hyundai, Mercedes-Benz and Audi all reported sales records for October. In fact, Kia has passed 400,000 annual U.S.sSales for the first time in the company history – exceeding what had been its previous full-year record in 2010. So far, Kia’s sales are up 35% this year.
Ford Motor Company’s October U.S. sales increased 6% during October. Ford brand sales were driven by gains in utilities, pickup trucks and passenger cars.
“The Ford brand continues growing its market share, showing we have the vehicles and technologies people truly want and value,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service.
GM posted a 2% sales increase compared with October, 2010. Sales of the Chevrolet Volt topped 1,100 units for the first time since the introduction last autumn and GM’s retails sales increased 3% as overall industry sales remained steady last month.
GM’s sales totaled 186,895 vehicles in October, up 2% compared with October 2010. Retail deliveries accounted for 77% of GM sales. Deliveries to fleet customers were essentially flat.
“Chevrolet led the way for GM in October driven by the continued success of the Cruze and Equinox,” said Don Johnson, vice president, U.S. Sales Operations. “Chevrolet, Buick, Cadillac and GMC have all performed well this year, which has set the stage for our transition to a higher mix of 2012 model-year vehicles. models accounted for 80% of passenger car sales and about half of truck and crossover sales.
Volkswagen of America sales increased 39.6% in October and the company had its best October since 2001. VW sales are up 23.8% for the first 10 months of 2011, already surpassing the carmaker’s full-year 2010 numbers – largely due to demand for new products like the new, American-made Passat and the third-generation VW Beetle, which is being imported from Mexico.
Industry analysts and corporate insiders will all be watching closely to see whether October’s momentum will be maintained in the weeks ahead. While pent-up demand, particularly for Japanese products in short supply, has helped it is unclear the industry can escape the malaise crippling the rest of the economy.
Paul A. Eisenstein contributed to this report.