Following closely behind the successful 2014 Los Angeles Auto Show, U.S. automakers have reported their best sales figures for new automobiles in years. This is due, in part, to the dramatic and continuing decline in gasoline prices nationwide (average prices are already below $3 per gallon, and could fall below $2 per gallon in some states if the trend continues), consumer confidence in the continuing recovery of the U.S. economy and special incentives in the days surrounding Black Friday.
Leading the auto sales boom, according to figures just released on their website, is Chrysler. Chrysler Group LLC reported that November 2014 U.S. sales increased 20 percent, making it the automaker’s best November for sales since 2001. Chrysler, Jeep, Dodge, Ram Truck and FIAT brands each posted sales gains as compared with the same month last year. Ram Truck posted a 31 percent increase for the largest sales gain of any Chrysler Group brand, and its best November sales since 2003. Sales of the all-new Chrysler 200 mid-size sedan were up 155 percent.
On its corporate website, rival automaker General Motors posted its best U.S. sales for November since 2007. It was the best November ever for the Chevrolet Spark, Cruze and Equinox; the best November for GMC since 2001; and the best November for Buick since 2003.
Rounding out the big three U.S. automakers was Ford, which is introducing several all-new models: the 2015 Mustang; the lighter, more fuel-efficient, aluminum-bodied F-150 truck; and the Transit. Ford’s website reported that Escape posted its best November sales ever, Explorer’s November sales were its best since 2004, and Mustang’s November sales were their best since 2006. Retail sales of the new Mustang were strongest in California, up 76 percent.
Lincoln delivered its best November sales results since 2007. Sales of the new Lincoln Navigator were up 88 percent.
For an auto dealer’s analysis of this encouraging sales news, AutoMatters+ interviewed Doug Davis, general manager/vice president of San Diego’s Kearny Pearson Ford — KIA:
"Manufacturers are coming out with the most technologically advanced, beautiful products that they’ve ever had.
"Fuel economy on the new Ford models is much improved. In the all-new F-150, they’ve reduced its overall weight by 700 pounds. That’s going to give a 3- to 5-miles-per-gallon fuel (economy) increase across all lines. That is going to be shipping in late December.
"Consumers have more money in their pockets because gas prices have come down. That couldn’t happen at a better time for the American consumer, this being the holidays.
"Another reason that car sales are doing so well is that the money has never been cheaper. The interest rates on auto loans are at all-time lows. The Federal Reserve has not raised interest rates.
"Used vehicle values are very strong for people who bring in cars to trade. Because of the lack of sales in prior years, dealers are in need of used cars. When they are late-model, nice used cars, we pay top dollar for them.
"Customers get a good interest rate, strong rebates from the manufacturers and excellent products.
"We went through some seriously tough times from 2005 through 2009, when the national sales rate went from 17 million down to 9 million units. In November of this year, the national sales rate was 17.2 million — an excellent month for the auto industry.
"One other factor that’s driving new-car and used-car sales is unemployment, which is much, much lower than it has been in recent years. People are making more money. They feel better about the economy when they see their 401(k)s rising, with the stock market going up as it has over the past three or four years. People feel it’s OK to buy because they’re in a much better, sound financial position. That really, really drives sales. You can have the best products in the world and have the lowest interest rates, but when people don’t feel good about their own financial situation, they’ll hunker down and save their money.
"For the first-time buyer, credit has been way more lenient in the past four or five months. Ford and KIA both have first-time buyer programs. If they’ve been on the credit bureau for over a year and don’t have any derogatory payments, then they’re really being lenient."
As always, please write to AutoMatters@gmail.com with your comments and suggestions.
Copyright © 2014 by Jan Wagner – AutoMatters+ #361