U.S. sales barely rise as storms, Nov. payback take toll
GM and Toyota fall, big rivals gain; SAAR cools
For all of 2013, Ford's sales rose 11 percent, with the Ford division up 11 percent and Lincoln down 1 percent.
Photo credit: BLOOMBERG
- What was hot, cold in 2013
- GM share slips in '13 as Dec. sales, pickups fall
- Jeep Cherokee, Ram ProMaster propel Chrysler
- GM ends monthly sales call with analysts, media
- Subaru's latest record: a 26% jump in 2013
- F series, Fusion drive Ford gains
- New capacity helps Nissan roll to records
- Flat December fails to tarnish 'another great year for auto sales'
- Mercedes outlasts BMW's late surge to grab U.S. luxury crown
- Toyota ends 2013 down while Lexus rises
- Audi, Porsche set U.S. records for 2013; VW sinks
- Canada sales highest in decade; Ford still tops
- 3 things we learned from December sales
U.S. light-vehicle sales edged up in December but fell short of expectations of a 4 percent gain, as wintry weather and a payback from November's surge took a bite out of demand.
Most companies managed to close out the year with an increase. Among the biggest automakers, Nissan led with an 11 percent gain, while General Motors dropped 6 percent.
The seasonally adjusted sales rate -- a broad measure of the industry's health – also came in below projections. The SAAR fell to 15.4 million from November's six-year high of 16.4 million and a notch above the 15.2 million generated a year earlier.
Analysts had expected the annualized sales rate to reach 15.8 million in December, Bloomberg reported.
December sales advanced 0.2 percent. For all of 2013, deliveries rose 8 percent to 15.6 million units, the most since 2007. Volume hit 16.2 million that year while the U.S. economy skidded toward recession.
Car sales rose 4 percent last year and light truck volume climbed 11 percent, with crossovers and large pickups driving the gains.
U.S. light-vehicle deliveries have now advanced for the fourth straight year after plunging to a 27-year low of 10.4 million units in 2009.
"2013 was the year that GM and the auto industry put the last traces of the recession in the rearview mirror," said Kurt McNeil, vice president of U.S. sales operations for General Motors.
More significantly, automakers are selling vehicles at higher transaction prices with lower rebates than the past, helping to create a more profitable environment.
The industry used to exceed 16 million sales per year "only by way of very heavy incentives to get people to buy cars," John Casesa, senior managing director at Guggenheim Partners LLC, told Bloomberg on Friday. "Today, incentives are much lower, the industry has cut capacity and we're selling 16 million units at very profitable prices. So we've got a much healthier industry."
Still, December was decidedly mixed for the biggest automakers.
In addition to GM's 6 percent decline, Toyota Motor Sales slipped 2 percent.
Chrysler Group and Hyundai recorded gains of 6 percent last month, while Honda Motor Co. and Ford Motor Co. deliveries rose 2 percent.
The December results at every major automaker fell short of analysts' projections.
In addition to inclement weather that thwarted showroom traffic in parts of the country, some analysts and automakers said strong industry sales and promotions in November, especially late in the month, also sapped December demand.
Some brands launched holiday deals and year-end clearance events earlier in November this year, a move that also curbed December volumes, analysts said.
Toyota said volume slid 5 percent at the Toyota division and rose 14 percent at Lexus last month. Camry, Corolla and Prius deliveries -- all mainstays for Toyota -- slipped. For the year, Toyota Motor Sales volume rose 7 percent to 2.24 million units.
At American Honda, sales at the Honda brand rose 2 percent while Acura volume dropped 2 percent.
The CR-V joined the Accord and Civic to become the third Honda vehicle to generate annual U.S. sales in excess of 300,000 units. The Accord also topped the rival Camry last month by 2,357 units, though the Camry remained the top-selling U.S. car for the 12th consecutive year.
"In a hotly competitive market, where every manufacturer brought their best products, our core models demonstrated significant growth without having to resort to fleet sales to drive volume as some of our competitors do," said John Mendel, executive vice president of sales at American Honda.
Honda staged an aggressive incentive program that rewarded U.S. dealers $3,000 for every vehicle they sold above their December 2012 sales total.
Ford's 2013 sales rose 11 percent, the biggest annual gain since 2010. The Ford division was up 11 percent, while Lincoln fell 1 percent.
"December was a strong close to an even better year for Ford," John Felice, Ford's vice president in charge of U.S. marketing, sales and service, said in a statement. "We saw strong growth across the entire Ford lineup and made significant gains in the import-dominated coastal markets."
The Ford Fiesta, Fusion and Escape set sales record for the year.
All of GM's brands posted declines last month, led by Chevrolet, GM's biggest division, with a drop of 8 percent. Volume skidded 7 percent at Buick, 2 percent at GMC and 1 percent at Cadillac.
It was the first decline in monthly volume at Cadillac since Sept. 2012.
GM's pickups slip
Big pickups -- Chevrolet Silverado volume down 16 percent and GMC Sierra off 5 percent -- were a noticeable weak spot for GM.
GM attributed its drop in December volume to a slow start to the month and "payback" from the company's big Black Friday sales event in November. The company also cited rivals' incentives and bad weather.
"People expect a deal at the end of the year," said Karl Brauer, senior analyst at Kelley Blue Book. "There was so much advertising over the airwaves in late 2013 but GM didn't seem to be that visible."
For all of 2013, GM's U.S. sales rose 7 percent, led by Cadillac, up 22 percent. Buick had a gain of 14 percent; there was a 9 percent increase at GMC and a 5 percent jump in Chevrolet deliveries.
Still, the company fell short of outgoing CEO Dan Akerson's pledge to boost U.S. market share in 2013.
Among other automakers, Honda Motor Co., Hyundai-Kia, Toyota Motor Corp. and Volkswagen Group also lost market share.
Chrysler and Ford, meanwhile, gained share, as did Daimler AG and Nissan Motor Co.
In a related matter, GM said today it is discontinuing its monthly conference call to review U.S. sales results with journalists and analysts.
Strong sales of the new Jeep Cherokee mid-sized SUV and other light trucks drove Chrysler Group's December results. In its second full month of sales, the Cherokee posted volume of 15,038 units, topping Jeep Wrangler deliveries, Chrysler said.
The company's light truck sales rose 15 percent while car deliveries -- a bright spot for the automaker all year -- slid 17 percent.
Sales rose 34 percent at Jeep, 17 percent at the Ram brand, and 1 percent at Fiat, while volume slid 9 percent at Dodge and 21 percent at the Chrysler brand.
Jeep Cherokee sales hit 15,038 units in December, boosting Chrysler Group results for the month and all of 2013.
Photo credit: SEAN GAGNIER
It was the first decline in monthly Dodge volume since May 2011. Ram pickup deliveries rose 11 percent to 33,405.
Chrysler Group's U.S. sales have advanced 45 consecutive months. For the year, Chrysler's U.S. volume rose 9 percent to 1.8 million units, with cars outpacing light trucks.
Hyundai's U.S. deliveries rose to 63,005 vehicles in December, pushing its 2013 sales to a record 720,783 vehicles. Volume was driven by the Elantra compact and Santa Fe sport utility vehicles, the company said.
Mitsubishi deliveries surged 56 percent, its third double-digit gain in a row. For the year, the company's sales rose 8 percent to 62,227.
Strong December deliveries also paved the way to record annual sales for the Nissan brand, Mercedes-Benz, Audi, BMW, Subaru, Land Rover and Porsche.
"Car shoppers responded overwhelmingly to the advertised holiday lease deals and they turned out the highest single-month lease rate -- 27.5 percent -- on record," said Jessica Caldwell, a senior analyst at Edmunds.com. "Amazingly, almost half of all European branded vehicles sold in December -- including many of the most popular luxury brands -- were leased."
While December fell short of projections, it capped another year of solid gains and recovery for the industry.
"The auto industry was a consistent bright spot in the economic recovery throughout 2013," said Bill Fay, Toyota division group vice president and general manager. "We expect the economy will continue to gain strength in 2014, with car sales rising to pre-recession levels."
Sales last month were stoked by year-end discounts and other promotions.
"The last week of the year was great. We had a ton of traffic and increased sales after a slow start," said Scott Runyan, a sales representative at Nelson Mazda Cool Springs in Franklin, Tenn.
The dealership, just south of Nashville, promoted an extra $2,000 off the 2014 Mazda6 and CX-5 crossover through Jan. 2, according to its Web site.
TrueCar.com estimates average industrywide incentives rose 4 percent to $2,676 in December from December 2012.
Favorable interest rates, pent-up demand, rising household wealth and new models also continue to drive industry volumes.
Among key segments, big pickups, large and compact crossovers, large and premium SUVs, and compact luxury cars set the sales pace during the year.
Analysts and automakers expect U.S. auto sales to continue rising in 2014 but at a slower pace.
"2013 was consistent with modest economic growth aided by very low interest rates for consumers of new cars," said Paul Taylor, an independent analyst and former chief economist for the National Automobile Dealers Association. "This year will feature stronger growth and continued low interest rates for new car loans, even as longer-term mortgage rates start to increase."
More capacity coming
Taylor projects U.S. new-vehicle sales will top 16.2 million units for the year.
"Economic growth in 2014 for the U.S. will strengthen through the end of year, ending with growth above 3 percent," he said.
Still, the industry will be challenged to keep incentives, pricing and inventories in check going forward.
Automakers plan to add 2.1 million units of capacity in North America after 2013, with nearly all of the incremental output planned by European and Asian companies, IHS Automotive said last month.
Sean Gagnier and Mike Colias contributed to this report.
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