US Auto Sales Show Strong Demand Despite Slowdown in December

US Auto Sales Show Strong Demand Despite Slowdown in December

Despite weaker-than-expected sales in December, full year numbers showed healthy demand in 2013, with auto sales jumping back to prerecession levels


By Martin Blanc on Jan 4, 2014 at 11:21 am Est

US automakers recorded their best vehicle sales since 2007, despite a slowdown in the month of December. Total annual sales for 2013 came in at 15.6 million vehicles representing an 8% gain from 2012, in a year that has seen demand for cars surge back to prerecession levels.

The positive news came along with some concern over the numbers for December, when typically favorable expectations for robust auto sales were met with disappointment. Total domestic car and light truck sales for the last month of the year, showed very modest gains compared to the same period last year, rising only 1% to come in at just under 1.36 million vehicles.

Analysts have attributed the slower-than-expected growth to an unusually harsh winter, lower incentives compared to November, and a lower number of selling days last month. But despite the December miss, industry experts do not expect automakers’ bottom lines to be substantially affected given the solid full year sales numbers.


According to the latest data released yesterday, by research firm Autodata Corp., General Motors (GM) reported a 6.3% year-over-year (YoY) decline in December sales, which were just above 230,000 vehicles. Detroit’s largest automaker saw its Silverado pickups losing ground to rivals in the highly competitive truck segment with a 16% YoY drop in sales. GM’s total unit sales for the year were clocked in at less than 2.78 million, which is a 7.3% increase.

Ford Motor Company’s (F) overall sales also missed expectations to register sales of 211,353 units in December, a 1.8% YoY increase. Ford’s F-Series pickup trucks were again the leader with around 75,000 units sold last month which is an 8.4% increase from December 2012. The year marks the 32nd consecutive year that the F-Series has been the bestselling vehicle in the country.

Ford’s total unit sales had previously increased 7.4% in the month of November, based largely on the flurry of discounts offered during the Thanksgiving holidays. For the full year, the company announced a 10.4% rise in unit sales which reached 2.44 million in 2013.

Chrysler Group LLC, which was recently acquired by Italian carmaker Fiat SpA (FIATY), was the top growth performer amongst Detroit’s Big Three last month, with a healthy 6% rise in vehicular sales to reach almost 160,000 units. Chrysler’s popular Ram series of trucks sold 33,405 units in December, an 11% rise over last year. For 2013, the company saw its total unit sales surge 8.9% to reach almost 1.8 million on the back of new model lineups including the new Jeep Cherokee.

Japanese automakers also reported mixed results, with Toyota’s (TM) December sales declining 1.7% YoY to 190,843 units. Toyota's full year sales rose 7.4% to reach 2.24 million vehicles in 2013. Honda Motor Company’s (HMC) domestic sales increased 1.9% in December from a year ago, while sales of Nissan Motors (NSANY) surged 10.5% last month to 109,700 units.


Slowing domestic car sales in the second half of the year were offset by robust demand for light trucks including pickups as the economy showed signs of growth. The US auto industry has rebounded to register healthy sales in recent quarters and this was reflected in the financial performance of major automakers.

Ford’s stock price rose 20% last year, while shares of General Motors increased 46% in 2013, as the government unloaded its remaining stake in the company over the course of the year. GM is expected to start paying out dividends this year as the carmaker recovers from the depths of the financial crisis. Analysts expect the gains to continue in 2014, although at a slower pace, given the pent-up demand for cars that was cited as a reason for the current growth in auto sales.

US automakers have benefited from extensive restructuring since the financial crisis that has seen them adopt a leaner fixed cost structure allowing them to stay profitable even with lower volumes. Detroit’s Big Three shed several loss-making brands and are now focusing on greener, fuel efficient vehicles to forge ahead with innovation, and thwart the increasing competition from their German and Japanese rivals in the global auto industry.

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