US Auto Sales Recovery Gains Momentum in February

Strategic Insights -

The U.S. auto sales recovery continued its upward trajectory in February, with all major car companies reporting significant gains. Led by General Motors Co.'s impressive 49% sales jump, the industry saw a surge in demand for both cars and trucks, driven by a gradually improving economy. However, the gains were partially fueled by sweeter financing and lease deals, with automakers increasing incentives by 5% from January to February. Amidst the optimism, the industry is also facing the challenges of rising gas prices due to increased demand and unrest in the Middle East.

Key Takeaways:

  • General Motors Co. led the pack with a 49% U.S. sales jump compared to February of last year, followed closely by Toyota Motor Corp. with a 42% gain.
  • Nissan Motor Co. and Honda Motor Co. had gains of 32% and 22%, respectively, while Hyundai Motor Co.'s sales increased by 28%.
  • Chrysler Group LLC and Ford Motor Co. showed smaller increases, but Chrysler's sales were still strong with a 13% gain and Ford came in at 10%.
  • TrueCar.com estimated that automakers raised incentives 5% from January to February to an average of $2,708 per vehicle.
  • Chrysler, Ford, Nissan, and Toyota all sweetened deals by more than 6% for the month.
  • The industry's enthusiasm for a fast start to 2011 is tempered somewhat by a rapid increase in gas prices due to increased demand and a jump in oil prices amid unrest in the Middle East.

Statistics:

  • General Motors Co. reported a 49% increase in U.S. sales compared to February of last year.
  • Toyota Motor Corp. saw a 42% gain in U.S. sales.
  • Nissan Motor Co. reported a 32% increase in sales.
  • Honda Motor Co.'s sales increased by 22%.
  • Hyundai Motor Co.'s sales went up 28%.
  • Chrysler Group LLC's sales increased by 13%.
  • Ford Motor Co.'s sales rose by 10%.
  • Automakers raised incentives by 5% from January to February, with an average of $2,708 per vehicle.
  • Chrysler, Ford, Nissan, and Toyota all increased their incentives by more than 6% for the month.

Sources:

  • Tom Krisher and Dee-Ann Durbin, Associated Press, "US Automakers Report Double-Digit Sales Gains," 2011.
  • TrueCar.com, "Automaker Incentives See 5% Increase in February," 2011.
  • Detroit News, "Gas prices rise amid Mideast tensions," 2011.