GM, Toyota Sales Gains Help U.S. Auto Market Exceed Analysts' Estimates
General Motors Co., Toyota Motor Corp. and Ford Motor Co. sales in February exceeded analysts’ estimates as rising consumer confidence boosted industrywide deliveries to the fastest pace in 18 months.
GM said deliveries in the month increased 46 percent to 207,028 vehicles. Toyota sales rose 42 percent to 141,846, while deliveries at Ford climbed 10 percent to 156,626 and Chrysler Group LLC gained 13 percent to 95,102.
Light-vehicle sales in February ran at a seasonally adjusted 13.4 million annual rate, according to Autodata Corp. in Woodcliff Lake, New Jersey. The pace topped the 12.5 million average estimate of 10 analysts surveyed by Bloomberg and was the fastest since the 14.2 million rate during the U.S. government’s “cash for clunkers” program in August 2009.
“GM and Toyota stood out for the month, but there were strong numbers across the board,” said Jeff Schuster, director of forecasting for researcher J.D. Power & Associates. “We’re looking at an economy that continues to improve, consumer confidence getting better, and you’re starting to see credit and leasing improve from the end of last year.”
Confidence among U.S. consumers rose in February to the highest in three years, according to separate reports last week from the Conference Board and Thomson Reuters/University of Michigan. The percentage of consumers planning to buy a new vehicle within six months increased to 4.6 percent from 3.1 percent at the end of last year, the Conference Board said.
The results for Detroit-based GM beat five analysts’ average estimate for a 36 percent increase. Deliveries of the Toyota, Lexus and Scion brands were expected to rise 27 percent, the average of four estimates.
Sales by Dearborn, Michigan-based Ford beat the 6.5 percent increase that was the average of six estimates. Auburn Hills, Michigan-based Chrysler more than doubled five analysts’ average estimate for a 6.1 percent sales gain in February.
GM expanded lease offerings in February and kept incentives it used to top the industry’s sales gains in January, said Don Johnson, the company’s vice president of U.S. sales. GM’s finance unit offered leases in twice the number of states as a month earlier and led partners such as Ally Financial Inc. to make more competitive offers to dealers, he said.
GM Subprime Sales
Sales to buyers with subprime credit scores accounted for 6.7 percent of GM’s deliveries in the month, exceeding the industry average of about 6 percent, Johnson said today on a conference call with analysts and media.
“The manufacturers are starting to introduce some more incentive spending and also are starting to be able to offer credit again,” Rebecca Lindland, an analyst at IHS Automotive in Lexington, Massachusetts, said today in a Bloomberg Television interview.
GM spent $3,849 a vehicle on incentives in February, up from $3,518 a year earlier, according to researcher Edmunds.com. The overall industry lowered incentives by 3.7 percent to $2,558, according to Edmunds estimates.
“This is clearly incentive-driven,” Jeremy Anwyl, chief executive officer of Santa Monica, California-based Edmunds, said of GM’s results in a telephone interview. “The rest of the industry is not really responding yet. Nobody is really matching GM.”
Incentives to ‘Moderate’
GM’s incentive spending as a portion of the prices on vehicles sold was 13 percent in the month, compared with about 10.6 percent for the industry, Johnson said. Spending on discounts and promotions will “start to moderate in March,” Johnson said yesterday in a briefing with reporters.
GM fell 58 cents, or 1.7 percent, to $32.95 at 4 p.m. in New York Stock Exchange composite trading. Ford slid 39 cents, or 2.6 percent, to $14.66.
Toyota’s sales increase was the automaker’s largest in at least 11 years, according to Carly Schaffner, a spokeswoman for the company’s U.S. sales unit in Torrance, California.
Toyota in late 2009 began record recalls, most for flaws linked to unintended acceleration, that dropped the Toyota City, Japan-based automaker’s market share to 12.8 percent in February 2010, the lowest since July 2005, according to Autodata.
U.S. safety regulators and NASA, the U.S. space agency, this month said their review of Toyota recalls found no evidence of electronic causes for unintended acceleration.
Toyota Owners ‘Validated’
“Our owners were pleased to see their belief in the vehicles validated” by the NASA report, Bob Carter , Toyota’s group vice president for U.S. sales, said on a conference call.
Ford’s namesake brand increased deliveries 22 percent to 150,678, while sales of the Lincoln luxury brand declined 11 percent to 5,948, the company said in a statement.
Ford will increase second-quarter production by 9 percent to 710,000 vehicles, George Pipas, the automaker’s sales analyst, said today on a conference call. Ford elected not to engage in a “price war” with GM and probably lost U.S. market share last month, Pipas told reporters yesterday.
“Market share can come and go depending on how you incent the market,” Ken Czubay, Ford’s U.S. sales chief, said today on a conference call. “Every company has its own business plan, but we’re going to stick with ours.”
GM’s Chevrolet brand sales rose 43 percent to 142,919 vehicles, and Buick deliveries increased 73 percent to 15,807, the company said today in a statement. GMC sales gained 59 percent to 32,534, while Cadillac deliveries climbed 70 percent to 15,768.
Rising Gas Prices
Rising gasoline prices could disrupt the industry’s recovery and lead buyers to shift toward cars from trucks and sport-utility vehicles, IHS’s Lindland said. Average regular unleaded gasoline prices in the U.S. rose to $3.38 yesterday, the highest since October 2008, according to AAA.
GM truck and SUV sales didn’t sustain “an obvious impact” in the month, Johnson said, as deliveries of its top-selling Chevrolet Silverado pickup surged 60 percent. Ford said about 30 percent of F-150 truck sales in the month were versions with the smaller six-cylinder engine.
Toyota’s Prius hybrid will benefit from gasoline prices rising toward $4 a gallon and as “the center of the industry” moves toward a focus on fuel economy, Carter said.
Nissan Motor Co.’s U.S. sales of Nissan and Infiniti brand vehicles rose 32 percent last month, the company said in an e- mailed statement. The average estimate of analysts surveyed by Bloomberg was for an increase of 19 percent.
Honda Motor Co. said its U.S. sales in February rose 22 percent. The average estimate of four analysts was 12 percent.
Light-vehicle sales in 2010 rose to 11.6 million from a 27- year low in 2009. Deliveries were still 31 percent less than the average 16.8 million annual average from 2000 to 2007, according to Autodata.
To contact the editor responsible for this story: Jamie Butters at email@example.com.