November 2012 US Vehicle Sales: It Was A Very Good Month

Here's why November car sales were the best for General Motors Co. (NYSE: GM) and Chrysler Group LLC since before the 2008-09 recession, Toyota Motor Sales, U.S.A., Inc., (NYSE:TM) and Honda Motor Co. Ltd. (TYO: 7267) saw double-digit sales growth and the industry had its best overall monthly performance since February 2008: More models and hi-tech standard features, stronger consumer sentiment and easier access to credit.

In other words, the unleasing of pent-up demand after Hurricane Sandy is barely a reason for November's strong car sales. The flooding story, which has been widely cited as a factor in November sales, turned out to be barely a drop in the proverbial bucket of auto sales, estimated by most analysts to be about 1.1 million units, where sales of just 30,000 vehicles turned out to be weather-related.

Take all the hi-tech features that are starting to come standard, attracting customers who have held back in reaplcing their older vehicles in recent years.

“We have more models than we’ve ever had before -- also in terms of value, if you look at the average transaction price of about $30,000 and how much car you are getting for that in terms of standard options,” said Jesse Toprak, an analyst with California-based car pricing website Truecar.com. “If you look at the new Honda Civic that debuted at the L.A. Auto Show, for example, for under $20,000 you’re getting navigation and Bluetooth, basically amenities you would have as options five years ago are now becoming commonplace.

The strong November sales, which also were reflected in sales by other carmakers, help vindicate the U.S. government's decision to rescue GM and Chrysler, and suggests they are on the road to long-term profitability and confirms the two automakers' decision to focus on smaller, more fuel-efficient vehicles.

Chrysler and Toyota reported double-digit sales growth in November while Ford Motor Co. (NYSE:F) and GM reported middle single-digit growth. Combined, these four automakers, as well as Honda and Nissan Motor Co. (Tokyo: 7201), reported selling a combined 861,215 vehicles in the U.S. last month.

Analysts estimate that all carmakers sold 1.1 million vehicles last month for a seasonally adjusted annual rate of around 15 million.

Americans have been holding on to their vehicles for longer. According to automotive information provider R. L. Polk & Co., the average age of a car on U.S. roads was 11.1 years -- a record. Drivers extend the amount of time they use their vehicles when economic times are bad and credit is harder to get.

Auto sales reports come out at the start of the month, and they offer a preview into short-term consumer sentiment. A good month of U.S. vehicle purchases during the holiday shopping season is an indicator consumers are more confident, at least in the short term. Since most cars are either financed or leased, easier access to consumer credit has made purchasing more enticing.

Future economic uncertainties, as well as an expected slight decline in U.S. gross domestic product, could hamper post-holiday sales, but Ford Motor Company (NYSE: F) also announced Monday it was planning to build more vehicles in the first quarter of next year compared to 2012, betting on a better year in terms of unit sales and making up for lower small car inventories.

One of the biggest factors in play for how well auto sales with perform next year is consumer confidence. The so-called fiscal cliff -- a toxic combination of tax hikes and across-the-board spending cuts that go into effect Jan. 1 if Congress and the White House don’t resolve the issue -- is a major determining factor.

“If you look at all macroeconomic indexes, the measure that correlates highest to new vehicle sales is the performance of the Dow Jones Industrial Index,” said Toprak.

So whatever causes the index to plummet -- like a fiscal cliff would -- will adversely harm auto sales next year. Without the effects of the fiscal cliff, analysts expect auto sales to continue to recover next year, albeit still below the 16-to-17-plus million annually sold units consistently seen in years prior to 2007.

Here are some of the largest automakers and how they performed last month, according to their announcement son Monday.

Nissan Motor Co. (Tokyo: 7201)

The Japanese auto giant reported U.S. November sales rose to 96,197 vehicles, up 13 percent in November 2012 compared to the year before. Nissan brand sales rose 9.8 percent, while the Infiniti luxury mark gained 23.6 percent for a total of 98,515 vehicles sold. Total sales for the company are up 13.7 percent for the year to date.

Sales of the most popular sedans, Altima, Sentra and Versa, all saw declines, but those were offset by sale of the Juke mini crossover, the Cube multi-purpose vehicle and the electric LEAF four-door hatchback. The Nissan Rogue compact crossover saw a 16.8 percent rise in sales, while the Pathfinder saw a 249 percent increase to 8,097 vehicles. Nissan truck sales benefited from some of the largest spending -- along with General Motors -- last month on incentives for its truck sales, which helped boost those sales numbers.

The luxury brand Infiniti's 41.2-percent gain was driven by a 6.5 percent increase in sales of the G sedan, to 3,680 units, as well as a 47 percent rise in the sale of the QX luxury SUV. The Infiniti brand saw its best November in history.

Nissan Motor Co. (PINK: NSANY) shares rose 5 cents to $19.61 on Monday in New York. The company’s Tokyo stock price gained ¥8 to close at ¥807 ($9.81) before the automaker made the announcement.

General Motors Company (NYSE: GM)

The Detroit-based auto giant reported Monday its best November sales performance since 2007, up 3 percent to 186,505 units led by strong 51 percent rise in the sale of mini, small and compact passenger cars compared to last year.

The Chevrolet brand sold the most units, 128,867, but sales were unchanged from the year before. Cadillac saw a 30 percent rise in unit sales to 14,517, followed by Buick’s 18.4 percent increase. Buick and Cadillac also led the way in retail sales compared to last year, of 18.4 percent and 26 percent, respectively. The Chevrolet brand saw a 4.3 percent contraction in retail sales.

The GMC Terrain mid-size utility vehicle led in the sale of crossover vehicles with a 44 percent rise, while the sale of large pickups was up only 8 percent, the company said, because of attractive incentives from competitors.

Kurt McNeil, vice president of U.S. sales operations, said that next year’s growth is contingent on Congress and the White House resolving the fiscal cliff situation of combined tax hikes and across-the-board spending cuts that if left unchanged could send the country into recession.

“Consumers hate uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth,” said McNeil.

General Motors Company (NYSE: GM) shares fell 37 cents to $25.51 on Monday.

Chrysler Group LLC

The subsidiary of Italian company Fiat S.p.A. (Milan: F) reported the best November 2012 U.S. sales of 122,565 units, a 14 percent rise from last year and the best November since 2007 and the 32nd consecutive month of year-over-year gains.

The Dodge brand saw a 32 percent increase in sales, led by the Dodge Journey family crossover that hit a record 77 percent sales gain for November and the Dodge Grand Caravan minivan, which saw a 42 percent rise in sales, the highest since before the 2008-09 recession.

Fiat brand sales led the way, with a 123 percent gain in November sales, while Chrysler brand sales grew 1 percent, the highest since 2008. The Ram Trucks brand sales grew 23 percent, the best rate in five years. The Ram Cargo Van saw a record-breaking 226 percent sales pop.

Jeep brand sales were down 3 percent. The Jeep Wrangler four-wheel-drive SUV set a November sales record with a 12 percent rise in unit sales.

Fiat shares closed down 1.07 percent to €3.52 ($4.59) on Monday in Milan.

Ford Motor Company (NYSE: F)

Ford reported November 2012 U.S. car sales up 6 percent over the year before with 177,673 vehicles sold. Ford reported that consumers have continued to gravitate to the Dearborn-based company's fuel-efficient hybrid vehicles. Retail sales at Ford-owned dealerships rose 12 percent last month compared to the previous year.

Car sales were up 15 percent, while trucks rose 4 percent and utility vehicles gained 2 percent. Small-car sales -- the Ford Focus, the Fiesta and the C-MAX Hybrids -- took the lead in sales gain, exhibiting the strongest November in 12 years. The hybrid line saw a 52 percent rise in sales from October.

The popular F-Series brand of full-size pickup trucks saw its year-over-year rise for the 16th consecutive month to the best November since 2005 with 56,299 pickups sold -- an 18 percent rise from last year.

The company also announced it would build 750,000 vehicles in the first quarter of 2013 -- an 11 percent rise from the same period this year.

Ford shares fell 4 cents to $11.41 on Monday.

Honda Motor Co. (NYSE: HMC)

Honda reported November U.S. sales up a record 38.9 percent to 116,590 units, boosted by strong sales for the latest Civic, breaking a 22-year monthly sales record on a 75-percent rise, and Accord, whose sales were up 82 percent. Combined, all Honda model sales increased 41 percent.

Overall sales of the Acura brand rose 23.6 percent led by the seventh consecutive monthly sales increase in the RDX compact crossover SUV, whose sales more than doubled form last year, and the MDX, its mid-sized equivalent that sold 3,368 units.

Honda Motor Co. (NYSE: HMC) shares fell 64 cents to $32.66 on Tuesday.

Toyota Motor Corporation (NYSE: TM)

Toyota reported U.S. sales shot up 17.2 percent to 162,695 units in November, citing pent-up demand and record low financing.

Lexus brand sales increase by 16.8 percent, while Toyota brand sales rose 17.3 percent compared to the previous year. Toyota passenger car sales rose 16.5 percent, while truck sales gained 18.3 percent.

Toyota Motor Corporation (NYSE: TM) shares fell 42 cents percent to $85.66 in New York on Tuesday.