automotive

Record November Auto Sales Suggest Record 2015

Who could have predicted that 2015 would wind down as the best year for U.S. auto sales in a long time, and maybe the best ever? But there you have it. Unless gasoline prices rise unexpectedly, or consumers radically downsize their passion and sentiment next month, we are on tap to break a record. Thanks be to November, with huge Black Friday volume, low gasoline prices, and Americans’ insatiable demand for Swiss Army knives on wheels, meaning all-purpose crossovers. 

November was a record month for Kia, Hyundai, Lexus, and Subaru. And it was not too shabby for General Motors, Fiat Chrysler Automobiles, Nissan/Infiniti, and Toyota -- which all posted increases for the month. Honda and Acura were exceptions -- as was Volkswagen, which should surprise no one. 

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Said Mustafa Mohatarem, GM’s chief economist, in a statement: “We expect customers will continue to embrace crossovers and SUVs because they are meeting their fundamental needs for utility, comfort and fuel efficiency.” 

The automaker saw a 13% increase in sales of Chevrolet vehicles, with Chevy trucks up 10% and crossovers up 35%. Buick posted a 12% increase in sales of its Encore crossover. GMC crossover sales rose 12%, and Cadillac's redone SRX was up 53%.

Fiat Chrysler saw a 3% sales increase -- the best November since 2000, driven by Jeep and Ram. The former got a 20% increase in sales because of four vehicles: the Jeep Cherokee, Compass, Patriot and Wrangler vehicles each recorded their best November sales ever. 

Reid Bigland, head of U.S. sales at FCA, said that even with two fewer selling days last month, the automaker posted its 68th consecutive month of year-over-year sales increases. “The favorable I.O.U. environment of low interest rates, oil prices, and unemployment, coupled with our strongest product line up ever, continues to be a significant driver of FCA sales.”

Ford, after posting its best October in 11 years -- during which it also launched its biggest promotional event, “Friends and Neighbors” -- ended up with the smallest gain among Detroit brands, with volume up less than a percent. The automaker is canceling the program, which was set to run through December. The campaign was about pricing transparency, not price cuts, and the company said it has actually lowered its incentive spending and saw increases in average transaction prices by $3,800 versus year-ago levels. 

Karl Brauer, senior analyst for Kelley Blue Book, stated that Ford's strategy is driving strong profits, “even as the automaker was flat in terms of volume for November.” He notes that Ford is facing an SUV-driven market, “which makes selling cars difficult and limits overall volume growth.”

Michelle Krebs, senior analyst for Autotrader, noted that Ford’s “Friends” program didn't resonate. “Autotrader showed significant traffic generated by the campaign, but the shopping activity didn’t turn into the sales Ford desired,” she said, suggesting that consumers still think they can do better haggling on price than accepting a fixed price, “As was part of the Ford promotion.”  She cited results from Autotrader’s own “2015 Car Buyer of the Future” study, wherein 56% of consumers surveyed — Millennials and women, particularly — said they prefer to negotiate, and that consumers do not yet trust flat-rate pricing, and they feel that they have to negotiate to get a fair price.

Volkswagen saw a nearly 25% decline in sales, both because of its tarnished reputation, and the voluntary stop-sale on all vehicles with 2.0 and 3.0 liter engines. Said Krebs: “Volkswagen was lucky to hold its own in the months immediately following the revelation of the emissions problems, but its luck on sales ran out in November.”

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