Honda Motor Co. and Ford Motor Co. reported bigger U.S. sales gains than expected for last month as Black Friday
promotions and year-end discounting lured buyers into showrooms.
promotions and year-end discounting lured buyers into showrooms.
Deliveries of cars and light trucks jumped 8.3 percent for Honda and 7 percent for Ford, which was buoyed by the best November since 2001 for its F-Series truck line. While sales slipped for General Motors Co. and Fiat Chrysler Automobiles NV, both reduced shipments to fleet customers like rental-car companies that are typically discounted.
Car manufacturers have cranked up incentive spending to clear inventory that’s built up on dealer lots as they wind down the first year of shrinking demand since the recession. Automakers have had more leeway to offer big rebates and cheap financing because buyers have been snapping up more sport utility vehicles and trucks, which usually start at higher prices than passenger cars that have fallen out of favor among consumers.
“November and December over the last few years have become a very big merchandising window for the industry,” Mark LaNeve, Ford’s U.S. sales chief, told analysts and reporters on a conference call Friday. Across the industry, spending on incentives increased by $300 to $400 per vehicle last month, he said. “From a discipline standpoint, even though it’s moved up, transaction prices moved up along with it.”
Industrywide, November sales probably ran at about a 17.3 million annualized rate, analysts estimated in a Bloomberg survey. That’s down from last year’s 17.7 million pace and slower than the blistering clip of the past two months, but would still mark one of the better months this year. GM estimated an industry selling rate of 17.4 million for the month.
Targeted Deals
“The basic economic fundamentals are sound and support new-vehicle sales,” Michelle Krebs, an analyst with car-buying website Autotrader, said by phone. “Incentives were up for the month, but they were targeted at specific vehicles or even specific customers. So they are maintaining discipline.”
Volkswagen AG’s combined deliveries for its VW and Audi brands rose 3.4 percent, narrowly missing estimates. While the German luxury brand has recorded 83 straight record sales months, demand dropped for all VW models except the new Atlas and Tiguan SUVs.
SUV Surge
Honda beat analyst projections thanks to sales surges of 57 percent for the Pilot and 25 percent for the CR-V. Ford said Explorer deliveries jumped 25 percent, notching the best November result for the SUV in 13 years. More than a quarter of the company’s deliveries were to fleet customers in the month, up from a year earlier.
For GM, Cadillac sales tumbled 13 percent and the GMC truck and SUV brand had an unusually weak month, with deliveries dropping 5.8 percent. Fiat Chrysler has reported monthly declines in U.S. sales for 15 consecutive months as it’s curbed shipments to rental-car fleets.
By: Jamie Butters, Keith Naughton and David Welch (Bloomberg News).
Contributing: John Lippert.
Photo: US News & World Report.
Review: Emerging Market Formulations & Research Unit, Flagship Records.