US car sales heat up in November, boosted by discounts

US car sales heat up in November, boosted by discounts

CHICAGO: Deep discounts and extra selling days boosted US car sales in November among many brands, as Black Friday shopping helped reverse three months of year-over-year declines, automakers reported Thursday.

But the good news was offset by steep declines for a few carmakers, leading to a slight downtick in sales compared to October. The industry sold 1.38 million units in November, just below the 1.39 million sold the prior month, according to Autodata.

The seasonally adjusted annual rate fell 2 percent to 17.87 million units from a year ago, the industry research firm said.

GM, the biggest US carmaker, reported a sales surge of 10.2 percent compared to the year-ago period. It’s Chevrolet and GMC brands saw most of the business, with the higher end Buick and Cadillac brands getting sizeable boosts.

Ford sales rose 5 percent, driven by gains in its retail sales of trucks and SUVs. Sales to rental agencies, commercial operations, and government were down 9 percent.

Toyota reported a 4.3 percent gain, crediting two additional selling days this November compared to last. The company said SUV sales were a highlight and were optimistic about a strong December.

GM also expressed optimism, saying it was ahead of schedule in selling off its 2016 model year inventory and expected robust December sales.

"All economic indicators show significantly improved optimism about the US economy including consumer and business sentiment, which continue to drive a very healthy US auto industry," GM chief economist Mustafa Mohatarem said in a statement.

"We believe the US auto industry is well-positioned for sales to continue at or near record levels into 2017."

Heavy discounting

In contrast, FCA US, the North American subsidiary of Fiat Chrysler, had a dismal month, reporting a 14 percent drop compared to November 2015. While sales were up 12 percent in its Ram truck brand, all other brands posted double-digit declines, including Fiat and Jeep.

And despite the good news overall, the healthy sales may prove costly as carmakers enticed customers with deep discounts, according to JD Power. It predicted incentive spending averaging $3,886 per unit, the highest since the record amount set in September.

"It is important to note that in absolute terms vehicle sales remain close to record levels while transaction prices are at record highs," JD Power automotive analyst Deirdre Borrego said in an analysis.

"However, these results are being driven in part by elevated incentive levels, which represent a meaningful risk to the long-term health of the auto industry."

GM said its incentive spending in November was 13.7 percent of the average transaction price of a vehicle, above the industry average. The company said its domestic competitors offered even greater discounts if averaged throughout the year.

Still, this year at least is on pace to conclude with a lot of good news for car companies, Edmunds analyst Jessica Caldwell said.

Presidential election

"Now that the presidential election is over, shoppers have more confidence in the economy than they had just a month ago, and that gives them extra motivation to make big-ticket purchases," she said.

Nissan was among those appearing to reap the most benefit, with a 7.5 percent sales boost that made for the best November on record. The company sold 22.2 percent more light trucks and SUVs in compared to the year-ago period.

Honda also set a November record with a 6.5 percent US sales increase. Unlike strong reliance on light trucks and SUVs at other brands, Honda's sedans also sold well, especially the Fit and Accord, the company said.

"We're excited to see Honda cars resonate so well with our customers," said Jeff Conrad, the general manager of the Honda brand in the US.

Volkswagen, struggling with an emissions scandal, reversed precipitous declines from previous months to report a 24.2 percent increase. Its Passat high-end model sold more than twice the number of units as for last November.

Other European brands struggled. Mercedes-Benz eked out a 1.1 percent US sales rise, and BMW saw sales plunge 18.2 percent after struggling all year and posting a 10 percent decline year-to-date.

 

US car sales heat up in November, boosted by discounts was posted in business of Geo TV - https://www.geo.tv on December 02, 2016 and was last updated on December 02, 2016. This news story is related to Car Sales, Chevrolet, Gmc, Us. Permanent link to the news story "US car sales heat up in November, boosted by discounts" is https://www.geo.tv/latest/122309-US-car-sales-heat-up-in-November-boosted-by-discounts.