September 4, 2013

In a cool economy, auto sales on fire

The Associated Press

(Continued from page 1)

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In this Aug. 13, 2013 file photo, Scott Garberding, senior vice president of manufacturing for Chrysler Group LLC stands between a 1992 Grand Cherokee, right, and the automaker's 5,000,000th vehicle produced at the Jefferson North Assembly Plant in Detroit. Chrysler's U.S. sales rose 12 percent in August as strong truck sales pushed the company to its best month in six years. (AP Photo/Carlos Osorio, File)

Carmakers are offering more options, like navigation systems, satellite radio and blind spot detection, and that's driving up prices. Incentives are also down. Automakers closed plants during the recession and no longer need to offer expensive discounts to sell off excess inventory.

High trade-in values and low interest rates are also allowing automakers to offer attractive lease deals. Gutierrez said there are now more than 20 vehicles on the market that can be leased for less than $200 per month, including electric cars like the Nissan Leaf. The industry tracking firm Experian said earlier this week that nearly 28 percent of people who financed cars in the second quarter leased them, a record high. That's up from 20 percent in 2007.

Christian Mayes, an auto analyst with Edward Jones in St. Louis, said consumers are figuring out that they can get a lot of car for the money due to low interest rates. Plus, newer vehicles are far more fuel-efficient than the ones they're replacing, so buyers can apply the savings on gasoline to the monthly payment to get more options, he said.

Mayes doesn't see the strong sales ending anytime soon. The auto sales recovery is broad-based, with work-truck, luxury and small-car buyers all starting to buy, he said.

Japanese automakers saw strong gains in August. Honda posted the biggest increase of all automakers, with sales up nearly 27 percent. Consumers bought a record number of CR-Vs last month, driving sales of the crossover SUV up 45 percent. Civic compact sales soared almost 60 percent.

Toyota had the second-biggest increase, at 23 percent, as Camry midsize car sales rose 22 percent to nearly 45,000. Nissan's sales were up 22 percent while Subaru's sales rose 45 percent to a best-ever 41,061.

Hyundai's sales gained 8 percent and Kia's rose 4 percent. The South Korean automakers have been struggling with low inventories this year.

Truck sales fueled Detroit's results. GM sales were up almost 15 percent for the company's best month since September of 2008. Chrysler and Ford each reported 12 percent gains.

Volkswagen's sales fell 2 percent as buyers waited for a new Golf small car to arrive in showrooms.

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