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Jim Paul stood Tuesday on the showroom floor of his Valley Buick GMC in Apple Valley.

K. HARKNESS • Star Tribune,

Auto sales surge to best rate since pre-recession

  • Article by: JACLYN TROP
  • New York Times
  • December 4, 2013 - 9:52 AM

 

Sales over the Thanksgiving weekend may have been a disappointment for the nation’s retailers, but they were a boon for automakers, lifting their U.S. sales for November to the best rate since before the recession.

Automakers predicted a seasonally adjusted annual rate of 16.3 million vehicles sold, the highest since May 2007. For the year, the industry is expected to sell 15.6 million new vehicles. The November figures, coming after a two-month lull in September and October, were being closely watched by analysts as an indication of the recovery’s staying power.

“A lot of people are breathing a sigh of relief,” said Mark Wakefield, director in the automotive practice at the global consulting firm AlixPartners. “People are still feeling like we’re recovering, especially since we have support from interest rates.”

New-vehicle sales in November rose across the board for Detroit’s three automakers. General Motors, the largest U.S. carmaker, reported that sales surged 14 percent for its best November sales since 2007.

Ford’s overall sales increased 7 percent. The company said its November passenger car sales, helped by gains in its Fiesta subcompact and Fusion sedan, were its best since 2002.

Sales gains for Chrysler, which introduced its new Jeep Cherokee in October, were the best of the Detroit automakers, up 16 percent for Chrysler’s 44th consecutive month of year-over-year sales growth and its best November sales in six years. Sales for the automaker’s Jeep brand rose 30 percent, for the strongest November on record.

‘Traffic surged’

Toyota’s sales climbed 10 percent because of a boost over the Black Friday weekend, said Bill Fay, Toyota’s division group vice president and general manager. “Industry sales in November picked up after Thanksgiving, contributing to the best sales pace of the year,” Fay said in a statement. “Showroom traffic surged over the holiday weekend for Toyota, indicating good momentum we expect to continue.”

Transaction prices rose while incentives remained flat, indicating consumers’ willingness to spend. “This is not a purely incentive-fueled industry right now,” said Mark Reuss, GM’s North America president.

GM said it had across-the-board demand for cars, crossovers and pickups. The Chevrolet Cruze compact, Equinox crossover and Volt plug-in hybrid had their best November sales ever. Kurt McNeil, vice president of GM’s U.S. sales operations, said, “The economy is creating jobs and household wealth. Energy costs are dropping, and credit is available and affordable. All of this bodes well for future growth.”

November sales of the automaker’s Chevrolet brand rose 13 percent on the strength of the Malibu sedan, which surged 41 percent, and the Volt. Buick brand sales were also up 13 percent, putting the brand on track for its best year since 2005 and 19th month of consecutive year-over-year retail sales growth.

GM’s GMC sales grew 20 percent, and Cadillac’s were up 11 percent for the month.

November’s sales performance showed resilience, said Erich Merkle, Ford’s U.S. sales analyst. The automaker’s Fusion and Fiesta set November records, with the Fusion climbing 51 percent and the Fiesta 26 percent. The F-Series pickup truck topped 60,000 sales for the seventh straight month.

In Minnesota, auto dealers credited the uptick in sales to a flurry of factors. U.S. car companies began promoting holiday deals like never before, small business owners took advantage of a tax break for large equipment purchases, and improving economic conditions are motivating Minnesotans to finally let go of their beaters.

In Minnesota, ‘pent up demand’

Jim Paul, co-owner of the Valley Automotive Group, said his four dealerships saw car and truck sales leap 35 percent to roughly 200 vehicles last month. “In my Apple Valley store alone, sales were up 100 percent from last year,” Paul said. Some of the activity is due to businesses coming in to buy $45,000 and $50,000 trucks such as the GMC Yukon. “They are all eligible for that tax deduction, so companies are buying them.” The deadline to get the break is Dec. 31.

Michael Saxon, who owns Ford and Lincoln dealerships in Inver Grove Heights and New Brighton, said the market is “hot right now,” noting that car and truck buyers have been wooed by “aggressive” leases, rebates and other financing programs.

Scott Lambert, executive vice president of the 400-member Minnesota Auto Dealers Association, said its members saw total vehicle sales rise 21 percent through September of this year. Sales are still rising, but probably at a slower pace, Lambert said. “I think we are back to a new healthy normal.”

Lambert said sales are also being driven by “pent up demand” from the Great Recession when drivers put off big-ticket purchases such as cars and trucks. Separately, “the auto industry here rises up and down with the housing market. With the housing market improving, we are selling cars.”

Doug Sprinthall, vehicle operations director at the nine-dealership Walser Automotive Group, said truck sales were strong in November at his shop. “Typically, we see that rise during the last two weeks of December. Not November,” he said. “The trucks have come roaring back. They were just terrible a year or so ago.”

 

Staff writer Dee DePass contributed to this report.

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