August Car Sales Rate Best Since 2006
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DETROIT (WWJ) – August car and truck sales shattered expectations, with a six percent increase over a very strong August of 2013. Most analysts were expecting sales to be fairly even with last year.
“I think a lot of the strength came from the later part of the month, especially Labor Day Weekend,” said Edmunds.com Senior Analyst Jessica Caldwell.
“There was a lot of shopping activity, and there were a lot of deals to be had.”
The Seasonally Adjusted Annual Sales rate hit 17.5 million, a number not seen since January of 2006.
Chrysler lead the way with a 20 percent sales increase.
“It’s just a stunning performance by Chrysler,” said Michelle Krebs, an analyst with Autotrader.com. “It continues to surprise us just how much strength there is there.”
Chrysler saw a 49 percent sales increase at Jeep. While the new Jeep Cherokee had another good month, other Jeep products also posted strong sales.
“The Patriot had its best sales month as well and the Wrangler had its best sales for the month of August,” said Chrysler spokesman Ralph Kisiel. “So, really it’s across the line.”
Nissan, meanwhile, posted an 11 percent sales increase, lead by new products. Toyota and Hyundai sales rose 6 percent.
General Motors sales were down 1 percent. But, spokesman Jim Cain says that was compared with their best month of 2013. He said if you adjusted for the one fewer selling day, GM sales would have been up 2 percent.
“What’s behind that is a fantastic month for our new Chevrolet Tahoe, Suburban, GMC Yukon,” said Cain. “Those sales were up 38 percent.”
Trucks were likely helped by a stable environment at the gas pump.
“Stable gas prices go a long way toward making trucks and SUVs more attractive to shoppers,” said Caldwell, of Edmunds.com. “And if history is any indication, shoppers can expect gas prices to fall even more through the end of the year. This is very fortunate timing for General Motors, which just recently rolled out new lineups of large SUVs such as Tahoe, Suburban and Yukon. Expect big months for these vehicles in the final quarter of 2014.”
Another help, says Caldwell, is easier access to credit.
“Low finance offers have proven to be a critical factor for the auto industry’s success in recent months. And it’s not just the low rates that grab the attention of shoppers; longer terms are also driving down monthly payments. With easy credit like this, shoppers who might otherwise consider a two or three-year old used car can see the value in buying new.”
Ford throttled back on promotions on its F-series, cutting into sales, but still finished pretty even with its August 2013 performance.
“It’s a very good month, considering we have daily rentals that we’re pulling back on–we’ve been doing so all year–down 36 percent,” said Ford Analyst Erich Merkle.
Incentives have been running higher than previous years. But, AutoTrader.com’s Michelle Krebs doesn’t believe there’s reason for concern, yet.
“The automakers are still able to get really good prices for the vehicles,” she said. “So, incentives, even though they may be up, aren’t that much of an impact.”
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