Boost in US sales of big trucks last month
Buyers adapt to tough economy
DETROIT - US buyers shrugged off economic worries and snapped up sport utility vehicles and pickups last month, surprising the auto industry and raising hopes that a bumpy year will end on a high note.
Big trucks typically sell when the housing market and construction industry are strong, gas prices are low, and consumer confidence is high. None of those was true in September. The economy remains weak, confidence is shaky, and a gallon of gas costs nearly $1 per more than in September 2010.
But other factors boosted truck sales. Small businesses must eventually replace aging fleets of work trucks, and auto companies offered some good deals to clear out 2011 model trucks. They also stepped up their marketing. And consumers are learning to live with economic uncertainty.
“We see consumers being more comfortable with buying cars in a continuously volatile environment,’’ said Jesse Toprak, vice president of industry trends and insights for the car pricing site TrueCar.com. “Traditionally, they would have postponed making the purchase decision.’’
US vehicle sales rose 10 percent from last September, according to Autodata Corp. September saw the fastest sales pace since April, and automakers expect that pace to stay steady for the rest of this year.
Nearly 54 percent of vehicles sold were trucks and SUVs, the highest percentage this year. That’s good news for automakers, which make much bigger profits on trucks and SUVs. Truck sales at General Motors Co., Chrysler Group LLC, and Ford Motor Co. grew in the double digits, outpacing cars. Even Honda Motor Co., which normally gets the bulk of its sales from cars, sold 3,000 more trucks than cars.
A shortage of cars is another reason truck and SUV sales were strong. Analysts had expected more Japanese cars to fill showrooms after months of shortages related to March’s earthquake and tsunami.
But Honda and Toyota continued to struggle with product shortages. Toyota’s September sales were down 17.5 percent, while Honda’s fell 8 percent.
Truckloads of new Honda vehicles arrived at dealerships last week, and Toyota Motor Corp.’s new Camry sedan recently went on sale, but they were too late in both cases to give September totals a significant boost.
Bob Carter, Toyota’s US sales chief, said October should be a turning point. With all of its plants now running, the automaker expects its Toyota division to post its first year-over-year sales increase since April and it expects to post sales increases through the fourth quarter and beyond.
Many buyers were replacing trucks in September because they had to. The average truck on the road is around 10.1 years old, according to R.L. Polk and Associates. “A commercial owner cannot afford to have their vehicle out of service,’’ said Don Johnson, GM’s vice president of US sales.
Promotions also helped. GM was offering zero-percent financing for 60 months and $1,000 cash on the 2011 Chevrolet Silverado 1500 pickup. But Edmunds.com said incentive spending was only up 3 percent from August, to an average of $2,453 per vehicle, and was actually down from last September.
Paul Ballew, a former GM chief economist who now works for Nationwide Insurance, said deals will probably get more generous in the last part of this year.