/>

Amid Fiscal Uncertainty, U.S. Auto Sales Jump 15 Percent in November

Despite a devastating hurricane that wiped away much of the Eastern seaboard in October and the constant warnings of an impending fiscal cliff and tax hikes in the coming year, many automakers saw a substantial sales gain in November. In fact, the U.S. auto industry saw a 15 percent increase as a whole last month.

Honda Leads the Way

As makers of both the Honda and Acura brands, American Honda saw the highest percentage gain of any major automaker, with 116,580 vehicles sold in November — a whopping 39 percent increase from the same month last year. The sedan saw an 82 percent jump during the same time period.

The Civic was the top seller for the month, at 30,075 vehicles, an increase of 75 percent from the same time last year. The recently redesigned Accord and CR-V crossover also saw vigorous sales.

John Mendel, American Honda executive vice president of sales, said in a statement: “We are now surpassing sales records set pre-recession, a true sign that our business has recovered.”

Volkswagen Sees Best November Since 1973

Volkswagen saw an increase of 29 percent, selling 36,728 vehicles last month — its best November in 39 years. The Jetta and Passat sedan sales contributed the most to the substantial gain. The company’s top brand, Audi, also announced year-over-year gains for the 23rd month in a row.

Jonathan Browning, president and CEO of Volkswagen Group of America, said in a statement:  “This is a testament to the appeal of our affordable German-engineered vehicles and the strength of our dealer network.”

Chrysler Reports Impressive Gains

Compared with a year ago, Chrysler Group reported a 14 percent increase in sales in November, with Fiat reporting a record month, selling more than 3,600 units. Jeep was the only exception, as the brand saw a decrease of 3 percent year-over-year.

This was Chrysler’s 32ndconsecutive month of sales gains, since the company nearly folded.

Reid Bigland, CEO of Dodge and U.S. sales for the group, said: “Even with all the talk of a looming fiscal cliff, Chrysler Group is well positioned for a strong sales finish to the year.”

Ford Sales Up 6 Percent

Ford Motor Co. reported a 6 percent gain in November, with retail sales increasing 12 percent. Car sales led the gain at 15 percent, with trucks growing 4 percent and utilities rising 2 percent. Small car sales rocketed 76 percent, with electric vehicles gaining momentum.

Ken Czubay, vice president of the company’s U.S. marketing, sales and service said: “We saw sharp increases in demand for Ford’s fuel-efficient small cars, our best-ever month for electrified vehicles and growing demand for our fuel-efficient and capable F-series pickups.”

Ford announced it plans to increase production in the first quarter of 2013 to 750,000 vehicles, an 11 percent increase.

GM Releases Mixed Results

GM deliveries rose 3 percent, with retail sales reportedly flat and fleet sales increasing 16 percent. There was an 11 percent reduction in truck sales for the month. Total passenger sales, however, were up 19 percent, and crossovers grew by 9 percent. Best sellers included Cadillac, Buick and Chevrolet.

Nissan, Hyundai and Toyota Also See Boost

Nissan also beat its own record in November, with an increase of 13 percent from the same time last year. Hyundai reported its best-ever November, with a 7.8 percent increase from last year’s numbers. Toyota sales, which included its luxury brand, Lexus, were up 17.2 percent last month, which has been attributed partly to special incentives from October.

What’s Driving the Auto Market?

Some economists attribute the November boost in auto sales during an otherwise tough economy to a combination of circumstances ranging from an increase in consumer confidence to the influx of new cars purchased after tens of thousands were damaged during Hurricane Sandy in October.

Another large contributing factor, which concerns many economists, is the amount of credit being extended to a group of consumers with somewhat flawed credit.

According to Experian, the average new-car buyer credit score decreased from 762 during the second quarter of 2011 to 753 this year. Average scores for used cars have also dropped from 671 to 662. Nationally, the median credit score is 711, and borrowers with a lower rating are more likely to be categorized as sub- or non-prime.

According to Experian, while auto loans saw a 5.5 percent increase in the second quarter when compared with the same time last year, “riskier” buyers accounted for 43.9 percent of the total.

Some say the Federal Reserve’s efforts to keep interest rates low motivated more investors to invest in securities backed by subprime car loans.

For example, Atlanta’s Global Lending Services LLC, a company that lends to subprime and deep-subprime borrowers and sometimes to those with no credit history, has invested $100 million on higher-risk car loans.

Record Sales Expected to Continue

Dealer sales are projected to increase 4 percent to about 15 million new cars in the new year, according to the research group Edmunds.com. While the rise in sales is healthy for the auto industry, economists have reservations regarding the lower credit standards for new car loans, especially when more than 12 million Americans are still unemployed.

John Silvia, chief economist at Wells Fargo Securities Inc., warned about the economic implications of lowering credit standards. “Once this cycle gets going, we could be in deep trouble in two or three years, because everybody starts pushing the envelope and pushing the envelope,” he said. “Are we drifting into the same problem we did with adjustable-rate mortgages in 2004?”

In debt? We can help!

  • Amount
  • Type
  • Contact

How much do you owe?

What can we help you with today?

Related Articles

Woman looking at bills on the floor

Student Loans, Other Debts Are Stressing Americans More Than Ever

The American Psychological Association (APA) and the Federal Reserve Bank of New York aren't working together on the mental and fiscal health of America — but they certainly could. The APA released its annual "Stress in America" survey on Feb. 11 and ...

Continue Reading
Top Financial News Stories of the Year

Top 10 Debt-Related Stories of 2013

Some phase of the economy is the No. 1 news story almost every year, but 2013 offered an interesting twist: It was possible to argue that nearly every financial story had equal parts good and bad news attached to it. It all depends on how you view ...

Continue Reading
People shopping on the holidays in a store

Holidays a Tough Time to Reduce Debt

The inevitable collision between year-end spending and budget restrictions is making this an uncomfortable holiday season for two vital groups in the American economy: Consumers and the federal government. American consumers, still wary of carrying debt ...

Continue Reading
Highest consumer confidence index rating since 2007

U.S. Consumer Confidence Highest Since July 2007

The bull run on Wall Street and a continued surge in home prices pushed consumer confidence to its highest level in almost six years. The Thomson Reuters/University of Michigan consumer confidence index jumped to 84.5, up more than eight points from April ...

Continue Reading
Economic indicators show the economy is improving

U.S. Economy Is Slowly Improving

The snapshot of the U.S. economy in the first week of May looks unusually promising. Almost every arrow economists want pointing up – home sales, auto sales, stock market – is up. Meanwhile, interest rates and unemployment figures continue to ...

Continue Reading
Economic indicators like housing and spending are confusing.

Despite Positive Economic Indicators, Consumer Confidence Continues to Decline

American consumers are a step slow in accepting the news that the U.S. economy really is on the mend. Consumer confidence and retail spending dipped in March, while the rest of the economy puttered along at a good-to-great pace. Housing starts in March ...

Continue Reading
Airline ratings are up, but so are complaints and fares.

Airline Ratings Are Up — So Are Complaints and Fares

The U.S. airline industry is coming off its second-best year ever in terms of customer service, but it comes with a price: Complaints were up, and so was the average fare for flying. The Airline Quality Rating gave high marks to the 14 largest U.S. ...

Continue Reading
Sequestration has not slowed the economy. Obama prepares to submit budget to Congress.

As Budget Talks Continue, Sequestration Has Yet to Stall Economy

A month after sequestration kicked in, the alarms sounded by President Obama – “It will cost us jobs and slow down our economy,” he said Feb. 5 – have not gone off. The $85 billion budget cuts that Washington lawmakers forced on themselves have ...

Continue Reading
Get Help Now

Overwhelmed with debt? You have options for lower monthly payments!

x