Automobile sales in the Unites States reached their highest rate this September since March 2008 as consumers took advantage of record low-interest rates to replace their aging vehicles.
Sales this past month were 12.8% higher than in September 2011. In total, slightly more than 1 million vehicles were sold, putting the industry on track to reach a target of nearly 15 million vehicles unit sales in 2012.
General Motors saw sales rise 2%, double those of August, while Ford Motor Co. small car sales rose 73% and Chrysler Group’s sales rose 12%.
But US automakers were not the only ones to see gains; Toyota Motor Corp. posted a 41.5% increase, Honda Motor Co. had a 31% rise and Volkswagen of America saw 34.4%.Hyundai Motor Co. and Kia Motors Corp. together increased 23%.
Volkswagen’s increase was the largest it has seen since 1972, putting it on track to reach its goal of 500,000 vehicles sold this year.? Meanwhile, Toyota and Honda are rebounding from 2011’s Japanese earthquake and tsunami.
Only Nissan Motor Co. saw a decrease, with sales down 1.1%.
Toyota, Honda and Chrysler beat analyst estimates, and Ford missed estimates, selling 200 vehicles less than 2011 because of an inventory shortage for two of its models.
Despite September’s increase in sales, GM and Ford saw truck sales decrease by 13% as customers, influenced by the rising price of fuel, are turning increasingly to cars.
August also saw an increase in sales, having the highest rate since August 2009.
Low interest rates have attracted auto owners who put off replacing old vehicles during the recession. Interest rates are averaging 3.19% for a 48-month loan compared to 7.45% in 2009. Interest rates are the lowest they have been since the Federal Reserve began recording new-car loan rates in 1971.
Five automakers are offering no interest loans on selected vehicle models.
Approximately 80% of new vehicles are purchased with financing.
The increase in US auto sales offsets sales in Europe, which dropped to a 17-year low.
Both GM and Ford say a drop in the jobless rate and a rise in home values are pushing customers to buy new vehicles.
Chrysler’s US sales chief Reid Bigland told the Chicago Tribune: “With … record-low interest rates and a stable US economy, we remain optimistic about the health of the US new vehicle sales industry.”
Key Statistics - Automotive Manufacturing in the US (source: MarketLine)
- In 2011, the automotive manufacturing industry in the US had revenue totaling $179 billion. This represents a decline for the period 2007- 2011, with a compound annual rate of change (CARC) of -3%.
- Between 2007-2011, industry consumption volumes decreased at a CARC of –over 5.5%. In 2011, they reached nearly 8,900 units.
- For the five-year period 2011-2016, the industry is predicted to grow. A compound annual growth rate (CAGR) of over 5% is forecast. By the end of 2016, the industry is expected to be valued at $231 billion.