Despite the embarrassing news about its mileage ratings, sales of vehicles like the Hyundai Genesis Coupe continued to soar.
A glance over the November sales numbers reveals a month that might best be described as a “win-win” situation.
There were few, if any, losers unless you count the modest 3% year-over-year increase at General Motors which fell well behind the overall industry upturn – one of the best month’s the U.S. new car market has seen since the bottom fell out prior to the long-running recession.
On a year-over-year basis, Subaru appears to have been the big winner with a 60% sales gain. But there was a long list of makers setting all-time records, including Nissan and its Infiniti luxury brand, Porsche, BMW, Honda and Audi. The latter maker reported its 23rd consecutive monthly gain, November bringing Audi’s sales for the year-to-date to 124,469, about 4% ahead of the record it set for all of 2011. Chrysler, meanwhile, delivered its 32nd consecutive monthly gain — its Fiat brand jumping 123%.
“November represented a strong month for the industry,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service, pointing to a variety of factors that sent the month shooting skyward.
Ironically, the same devastating storm that hurt demand in October helped drive the market forward in November. Tens of thousands of buyers were forced to postpone purchases the previous month because of Superstorm Sandy, according to industry analysts. By various estimates, a minimum 20,000 came back to showrooms in November.
Dave Zuchowski, executive vice president of sales for Hyundai Motor America, said he “expect(s) continued momentum there for the balance of the year,” with the storm also forcing as many as 100,000 or more motorists to replaced vehicles that were heavily damaged or destroyed.
Meanwhile, Bill Fay, Toyota Division group vice president and general manager, cited other factors behind November’s solid numbers, including “pent up demand, record low finance rates and exciting new products (for) also driving demand.”
A variety of other factors appear to have been at work – even as analysts say they saw little sign that consumers backed off on spending due to concerns that the so-called “fiscal cliff” facing Washington lawmakers might push the U.S. economy back into recession.
Once the final numbers for the month are in, most observers now anticipate the Seasonally Adjusted Annual sales Rate, or SAAR, will work out to just over 15 million, making November the industry’s best month since March of 2008. That was just before the nation began its headlong plunge into recession. On an annualized basis, that would be a roughly 45% increase over 2009’s total sales, a four-decades-low 10.6 million – though well behind the nearly 17.5 million vehicles sold in 2005.
For the year as a whole, 2012 looks likely to come in around 14.3 million. But at the current rate of recovery, industry planners are increasingly upbeat for 2013.
“The forecast ahead looks even better,” Toyota’s U.S. CEO Jim Lentz pronounced during a keynote speech at the LA Auto Show. “Analysts expected we will 16 million again in just a few, short years.”
While the industry might have dodged economic concerns in November, some insiders warned that the fate of the automotive market is still dependent upon reaching a settlement in Washington on taxes and spending.
“Exactly how much growth we can expect next year will depend, in part, on how Congress and the president resolve the fiscal cliff issue,” warned GM’s U.S. sales director Kurt McNeil. “Markets and consumers hate uncertainty.”
GM’s weak performance last month has generated a number of questions about why the maker continues to lag behind the rest of the industry’s strong recovery – its sales up just 4% for the first 10 months of 2012 compared to an overall industry gain of 14%.
The maker’s newest products have so far failed to gain the anticipated lift. It also appears to be suffering from the fact that its domestic competitors are offering much newer full-size trucks. The Chevrolet Silverado and GMC Sierra won’t be updated until next year.
GM has been holding back on incentives on its truck models, though it did boost overall givebacks by 20%, year-over-year, to an average $3,720 per vehicles, according to data from TrueCar.com, second-highest in the industry.
One maker that was expected to show some softening in November managed to dodge the proverbial bullet. Hyundai began the month by acknowledging it had overstated the mileage of seven of its vehicles. High fuel economy has been a major selling point for the maker. But Hyundai’s proactive mea culpa – and the promise to offer debit cards to owners of the affected vehicles to offset higher operating costs – appear to have satisfied potential buyers.
With sales of 53,487 for the month, Hyundai also set a record for November – as did its Korean sibling Kia, which had to restate the fuel economy numbers of six of its models.
Joe Szczesny contributed to this report.