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April Showers Bring Sales Power
After one of the worst winters in recent memory America’s northern extremities are finally starting to thaw out. In addition to longer days, spring is also bringing warmer temperatures as the sun wakes up from hibernation. But were April car sales as nice? Did better weather get more people in the mood… to buy a car, that is?
All told automakers sold nearly 1.4 million new vehicles in April, an increase of about 8 percent compared to the same month last year. The change was modest but headed in the right direction, and that’s what matters.
For the first four months of 2014 deliveries have topped 5.1 million units. That’s approximately a 3 percent increase compared to the same time period last year. Again that’s small but really there’s nothing to complain about. Here’s a list of top-performing brands along with the companies that didn’t do as well.
The average fuel economy of new vehicles sold last month reached an all-time high of 25.4 mpg.
Win, Lose or Drive
The numbers are in, figures tabulated and Champaign corks popped. It’s a brand-new year and 2013 is forever in the rear-view mirror. New-vehicle sales for December have finally been reported.
Overall deliveries were pretty flat across the board. Roughly 2,600 vehicles separate last month’s performance from the same period in 2012. Cold, snowy weather kept would-be buyers away from dealerships. Still, steady as she goes beats a big drop any day.
As for they the whole of 2013 things were considerably better. Sales were up about 8 percent compared to the year prior with deliveries falling just shy of 15.6 million units. That is a major victory for the automotive industry as it continues to recover from the great recession.
As for December’s numbers, here are the top sales winners and losers for the 12th month of last year. Naturally this list excludes brands like Maybach and Suzuki that have bowed out of the market.
In a recent study released by J.D. Power Asia Pacific, overall customer satisfaction with new-vehicle sales has declined, while fuel efficiency is the most frequently cited factor in choosing a new vehicle.
Imported vehicles in the United States are selling at their highest price premium in more than a decade, as a result of a weak US dollar compared with other currencies like the Euro and Yen.
In fact, the average selling price for a new imported car reached a dizzying $31,536 in August, some $7,614 than the average domestic made vehicle during the same period, according to the US Bureau of Economic Analysis.
Automakers such as Honda and Toyota are reluctant to import smaller, cheaper offerings, which traditionally have lower profit margins, than larger, more expensive vehicles. The aftermath of the March 11 earthquake and Tsunami in Japan didn’t help matters, resulting in supply issues that further hampered both production and imports.
Other overseas brands, namely premium priced European offerings, gained a greater proportion of imported new car sales, particularly Volkswagen and Audi, according to findings from Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio.
“It’s very hard to import, especially from Asia, small cars right now because of where the dollar is,” Ballew said. “If you look at luxury-car sales the last few months, they’re up double-digits from a year ago while small cars are down more than 20 percent.”
As the Yen continues its march against the dollar, Japanese manufacturers are less likely to offer incentives to move metal off dealer lots; in fact average industry wide spending on incentives fell some 9.6 percent through September, down to $2,498 per vehicle.
In an effort to counter further profit margin erosion, Japanese automakers are also looking to shift more production of vehicles overseas; Nissan is already boosting investments in plants it operates in Thailand and Mexico, in addition to constructing a new facility in Brazil, scheduled to become operational in 2014.
Toyota meanwhile, is planning to spend some 26.3 billion yen, building a second plant in Indonesia as it aims to build a robust supplier network in that country, part of its goal to not only minimize future supply problems but boost vehicle demand in emerging markets.
Even German automakers such as BMW and Volkswagen are investing heavily overseas, the former expanding operations in South Carolina, while the former has opened a new plant in Tennessee, marking the first time that VW vehicles have been assembled in the US since 1988.
According to Ballew, “import manufacturers cannot afford to do what they’ve normally done in terms of bringing in products from Asian markets. You’re looking at some temporary anomalies, but you’re also looking at some structural changes. There is some renewed energy to bring manufacturing into the US.”
[Source: Automotive News]