Strong Dec. pushes U.S. auto sales up 6% in 2014
DETROIT (Jan. 6, 2014) — Led by double-digit sales increases at Fiat Chrysler, General Motors Co., Hyundai Motor Co., Toyota Motor Corp. and Subaru of America Inc., the U.S. auto industry closed out a stellar 2014 with a blockbuster December as U.S. consumers took advantage of year-end deals, lower fuel prices and an improving economy.
Light-vehicle sales rose 11 percent in December — slightly above forecasts — and 6 percent for the year.to 16.5 million units. The annualized pace of sales hit 16.9 million units, the third-fastest sales rate of the year.
It is the fifth consecutive year U.S. deliveries have increased after hitting a 27-year low of 10.4 million in 2009 during the Great Recession.
Thirteen brands — Honda, Nissan, Subaru, Porsche, Kia, Mercedes-Benz, Maserati, Land Rover, Hyundai, BMW, Audi, Jeep and Ram — established U.S. sales records in 2014.
“Everything you need to have a great month was in place,” said Kurt McNeil, head of U.S. sales operations for GM. “Consumers felt good about the direction of the economy, interest rates and fuel prices were low, and our dealers did a great job introducing customers to our...new and redesigned vehicles.”
Among major auto makers, Daimler A.G., FCA, Nissan Motor and Toyota gained U.S. market share in 2014 while the BMW Group, Ford Motor Co., GM, American Honda Motor Co., Hyundai-Kia and Volkswagen Group lost ground. Subaru and Mazda also captured additional share.
BMW retakes luxury title
The BMW brand reclaimed the luxury-sales crown from Mercedes-Benz in 2014 by a 9,347-vehicle margin — 339,738 vs. 330,391. No. 3 Lexus, which was the luxury leader from 2000 to 2010, is quickly closing the gap on its top two rivals, passing 300,000 in annual sales for the first time since 2007.
Meanwhile, Audi (182,011) outsold Cadillac (170,750) for the first time, jumping to the No. 4 luxury brand.
Sales at FCA, formerly the Chrysler Group, rose 20 percent in December, capping a year that saw overall volume advance 16 percent. The company posted the biggest gain in U.S. market share among major automakers on robust demand for Ram pickups and Jeeps.
Deliveries at GM, helped by heavy promotions, rose 19 percent, with retail volume increasing 23 percent and fleet shipments advancing 6 percent. Sales rose 21 percent at Chevrolet, 23 percent at GMC and 32 percent at Buick, while Cadillac dropped 11 percent.
For all of 2014, GM's sales advanced 5 percent.
At Toyota, sales of Lexus, Toyota and Scion models totaled 215,057 last month, a 13- percent increase. The company's 2014 volume advanced 6 percent. Toyota brand deliveries rose 13 percent and Lexus volume hit a December record of 39,879, up 15 percent.
The Camry, with sales of 428,606, ranked as the top-selling car in the U.S. for the 13th straight year.
“The industry finished last year on a high note thanks to a strong economic tailwind,” said Bill Fay, general manager of the Toyota division. “That momentum should continue in 2015 and combined with continued strong replacement demand, boost sales further.”
Still, some executives and analysts caution that growth will slow in 2015 after five years of rapid recovery.
“U.S. auto sales are dancing to a very different, and we believe unsustainable, beat," Morgan Stanley analyst Adam Jonas warned in a report Monday.
Mr. Jonas suggested demand for new light vehicles has outpaced U.S. economic, wage and housing growth rates, thanks largely to easy credit access and extended loan terms that are keeping monthly payments manageable for many consumers.
Toyota executives said they conservatively expect 2015 sales of 16.7 million vehicles, while others, including LMC Automotive, expect deliveries to hit 17 million.
“Any way you slice it, whether it's 16.7 [million vehicles] or slightly below or above, it's still a very healthy industry,” Jeff Bracken, head of Toyota Motor Corp.'s Lexus brand in the U.S., said of the coming year.
For some automakers, December and 2014 was a time to celebrate.
At FCA, sales last month rose 19 percent at Jeep, 35 percent at Ram, 53 percent at the Chrysler brand and 1 percent at Fiat. Volume slipped 2 percent at Dodge. The company's U.S. deliveries have now increased 57 consecutive months.
For the year, FCA's sales hit nearly 2.1 million on a 28 percent surge in light-truck deliveries.
FCA is particularly well positioned as America rekindles its fondness for SUVs and pickups. For the year, Jeep volume surged 41 percent to 692,348. Ram pickup deliveries surged 24 percent in 2014 to 439,789.
Through November, FCA's U.S. market share stood at 12.7 percent, up from 11.5 percent through November 2013. Jeep's U.S. market share climbed 1.1 percentage points to 4.2 percent through November.
Ford sales rose 1 percent in December and slipped nearly 1 percent for the year, reflecting lower F-150 volume as the company transitions to the redesigned 2015 model. Deliveries last month rose 0.5 percent at the Ford brand and 21 percent at Lincoln
Honda's sales edged up 1.5 percent. Despite a slight drop in volume at the Honda brand in December, U.S. sales at the division set an annual record of 1,373,029. Acura volume rose 13 percent last month and 1.5 percent for the year.
Honda — describing the truck market as “fast-paced” — said it set December and full-year records for crossovers and other light trucks. Deliveries of the CR-V crossover rose 13 percent in December to a record 32,369 units, and 10 percent for the year to a record of 335,019.
Sales of the Honda Pilot, helped by incentives, surged 28 percent to 11,479 in December.
“Despite the price of gasoline dropping well below $3 a gallon in many markets, Honda's strong, balanced lineup of cars and trucks helped us achieve record sales in 2014,” said Jeff Conrad, general manager of the Honda division. “We will build on this momentum with some great new products coming in 2015.”
Core models drive Nissan
Deliveries at the Nissan brand rose 9 percent while volume slipped 9 percent at Infiniti last month. For the year, U.S. sales rose 12 percent to a record 1,269,565 at the Nissan division and 1 percent at Infiniti.
Fred Diaz, Nissan's senior vice president for U.S. sales, marketing and operations, credited the company's core models — Altima, Sentra, Versa and Rogue, as well as the electric Leaf — for the results.
Even with gasoline prices falling in recent months, U.S. deliveries of the Leaf topped 30,000 in 2014 — the first time any plug-in vehicle has reached that milestone in a single year, the company said.
Overall, Nissan's car sales rose 12 percent while truck volume slipped 1 percent last month. For the year, the company's car volume rose 13 percent, outpacing the 9 percent increase in truck demand.
“We expect low gas prices and high consumer confidence to be the magic formula that continues to bring more buyers into dealer showrooms,” Mr. Diaz said.
Subaru shattered the 500,000 annual sales mark in the U.S. for the first time on a 24 percent gain in December deliveries.
Mazda reported December volume of 24,808, a gain of 8 percent, and the company's annual sales topped 300,000 units for the first time since 1994. The company said it retailed 278,880 units last year, the highest total since 1994 as part of a plan to reduce reliance on fleet deliveries.
Volkswagen sold 34,058 vehicles last month, essentially flat compared with Dec. 2013, while the brand's full-year sales fell 10 percent to 366,970.
Numerous factors are playing out to support robust auto sales heading into 2015. Favorable financing terms, improving household finances, employment gains, new or redesigned models and the plunge in gasoline prices are all combining to attract buyers to U.S. showrooms.
“The momentum the economy carried through 2014 accelerated in the fourth quarter,” said Mustafa Mohatarem, chief economist for GM. “Car-buying fundamentals remain strong and we expect higher industry sales in 2015.”
A steady wave of recalls — the industry set a record in 2014 — also hasn't deterred shoppers.
“December sums up what we've seen all year for automakers, and it's a fitting finish to a comeback year for the industry,” said John Krafcik, president of TrueCar. “Sales volume growth and the popularity of highly profitable vehicle segments — pickups, utilities and luxury vehicles — has been immensely beneficial to automakers' revenue and we expect more good news in 2015.”
To end the year on a high note, there were plenty of deals promoted throughout the month and many dealers extended showroom hours between Christmas and the New Year holiday weekend to handle additional volume.
Analysts at Edmunds.com estimate about a third of the month's sales happened in the last week of December.
With gasoline prices falling below $2 a gallon in large swaths of the country, automakers and dealers sweetened discounts on hybrids. Tom Wood Lexus near Indianapolis dangled a $299 a month lease for 27 months and $1,099 due at signing on the 2015 CT 200h. The dealership also threw in a $250 Amazon.com gift card for customers who bought or leased any new vehicle through Jan. 3.
Trucks, prices shift higher
Kelley Blue Book said light-vehicle transaction prices rose nearly 3 percent year-over-year to $34,367 in December — making it the highest month on record for average transaction prices.
Pricing was strong across most of the industry with the exception of hybrids and electric vehicles, KBB said.
It was also the year of the light truck for most automakers. Buyers purchased more pickups, minivans, crossovers and SUVs than cars every month in 2014. That's something automakers haven't enjoyed since 2004 when a barrel of oil sold for less than $40.
David Phillips is a reporter with Automotive News, a sister publication of Tire Business under Crain Communications Inc. Omari Gardner and Ryan Beene contributed to this report.
SIGN UP FOR NEWSLETTERS
Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].