Auto Sales For November Hit Fastest Pace In Almost Seven Years

New Models, Moderating Gas Prices, Incentives Play Role, Industry Bullish on Growth

By Published on .

U.S. sales of cars and light trucks surged 9% in November to 1.24 million units and rolled off dealership lots at the fastest pace in almost seven years, Automotive News reports today.

The industry's annualized sales rate, adjusted for seasonal factors, rose to 16.4 million last month, up from 15.3 million a year earlier. That marks the highest seasonally adjusted rate since the 16.8 million mark reached in February 2007, which was 10 months before the start of the recession.

The performance marked the industry's best November since 2003 and came in just over 84,000 units shy of the industry's best November ever -- 2001, when sales totaled 1.328 million. Industry sales topped 16 million units from 1999 through 2007 before the collapse of 2008-09.

2014 Jeep Cherokee
2014 Jeep Cherokee

General Motors and Chrysler Group led major automakers with hefty increases in November sales, with pickups and new models such as the Jeep Cherokee driving the gains. Toyota Motor Corp. and Nissan Motor Co. posted smaller double-digit increases, while Honda Motor Co. volume slipped 0.1% from record November 2012 results. Ford Motor Co. generated an increase of 7%. Among smaller automakers, Subaru continued its surge while Volkswagen extended its slump.

Shutdowns, gas, storms
Some analysts believe November's figures reflect a boost from skittish consumers who delayed purchases in October because of the partial U.S. government shutdown.

In November of 2012, sales climbed to their highest annualized rate of the year as consumers replaced vehicles damaged during SuperStorm Sandy along the East Coast. Percentage increases in comparison to that month may be muted as a result.

Moderating gas prices also played a role. "Moderate gasoline prices remain favorable for mix and crossover and full-size pickups are expected to be the strongest-performing segments," Elaine Kwei, an analyst with Jefferies LLC, said in a report Monday. "Auto sales remain one of the strongest areas of consumer spending."

Pickup demand
GM's deliveries climbed 14% on a 19% rise in volume to individual customers. Deliveries rose 20% at GMC, 13% at Chevrolet and Buick, and 11% at Cadillac.

Toyota said its U.S. deliveries increased last month by 10% to 178,044 units. At American Honda, sales dropped 2% at the Honda division and increased 19% at Acura.

"With our second-best-ever November sales, we likely extended our retail sales lead despite very aggressive market actions by competitors in key high volume segments," John Mendel, exec VP-sales at American Honda, said in a statement. "And we're upping the ante as we approach the close of the year with a significantly updated 2014 Civic going on sale in just a few days."

Healthy demand for the Ram pickup and new Jeep Cherokee propelled Chrysler Group to a 16% increase, its 44th consecutive monthly advance. Sales rose 30% at Jeep, 25% at the Ram brand, 12% at the Chrysler brand, and 4% at Dodge. Deliveries slipped 15% at Fiat.

Overall, Chrysler's car sales fell 7% and light-truck demand jumped 26%.

John Krafcik
John Krafcik

VW Takes Own Road
Hyundai set a November sales record with volume of 56,005 units, a gain of 5%. John Krafcik, CEO of Hyundai Motor America, said in a Twitter posting earlier today the gains were led by the Santa Fe, Accent and Elantra.

Nissan North America sold 106, 528 light vehicles last month, a record for November and up 11% from a year earlier.

November was another tough month for Volkswagen of America. The VW brand's sales fell 16% as sales of the Jetta sedan, Passat sedan and Tiguan crossover all declined, leaving the brand's year-to-date sales 5% below last year.

One contributing factor: VW has cut incentives 13% since September. That partly reflects the changeover to the 2014 model year, but Volkswagen Group of America CEO Jonathan Browning told reporters today he is determined that VW will not follow the "super aggressive" incentives and the generous financing deals being offered this holiday season.

Subaru, meanwhile, extended its lead over VW in the U.S. sales charts with a 30% November increase.

Audi of America sales rose 13% on continued strong demand for the Q5 and Q7 crossovers. The luxury brand has sold 141,048 units through November, besting last year's record total of 139,310 units with a month to spare, and putting Audi well on track to beat its volume target of 150,000 units.

Earlier projections
U.S. car and light-truck sales for November were projected to climb 5% from a strong year-earlier month to 1.2 million units, according to the average of seven analysts' estimates compiled by Bloomberg.

The November volume included deliveries tallied through Monday and five weekend sales periods. Volume was driven by early holiday promotions, attractive financing offers and pent-up demand.

"Sales in November tend to be heavily skewed toward the end of the month because of Black Friday sales events," said Alec Gutierrez, senior analyst for Kelley Blue Book.

Big incentives
TrueCar estimated the industry spent an average of $2,507 per unit on incentives last month, a slight increase over November 2012, but down 2% from October 2013.

GM and Ford, locked in a battle over big pickups, each spent more than $3,000, on average, on discounts per model last month, TrueCar said.

Hyundai, Kia and the Volkswagen Group also raised discounts sharply last month compared with November 2012.

Industry executives seemed confident the sales burst would continue. "We feel good about the direction of the economy and our own momentum," Kurt McNeil, head of U.S. sales operations for GM, said in a statement. "The economy is creating jobs and household wealth. Energy costs are dropping and credit is available and affordable. All of this bodes well for future growth."

Gabe Nelson and Nick Bunkley contributed to this report.

Most Popular
In this article: