March 2nd, 2012 at 12:00pm
The February SAAR in the American market hit 15 million units, a jaw-dropping surge that has taken everyone in the business by surprise. Nissan will sell low-cost cars in growing markets under the Datsun nameplate starting in 2014. A test drive of the all-new Mazda CX-5 with Autoline Daily correspondent Isaac Bouchard. All that and more, plus guest host Michelle Krebs from Edmunds.com shares her thoughts on whether the high price of gasoline will hurt car sales.
Hello again and welcome back to Autoline Daily. It’s Friday-Friday-Friday, the second of March, 2012. Hard to believe it’s already the third month of the year, but time flies when you’re having fun, filling in for John. I’m Michelle Krebs of Edmunds.com and we’ve got a great show today including a test drive of the new Mazda CX-5 PLUS a look at where gas prices are headed, so let’s get to it.
FEBRUARY SALES SKYROCKET (subscription required)
There’s good news to report on the sales front. The February SAAR in the American market hit 15 million units, a jaw-dropping surge that has taken everyone in the business by surprise. Total sales for the month hit 1.1 million vehicles, up 11.2 percent from a year ago. The biggest sales gains came from Suzuki, which was up 42 percent, though its numbers were very small. VW was up almost 37 percent, Chrysler jumped 35 percent, Jaguar-Land Rover and BMW both surged 26 percent. Toyota and Honda were both up almost 8 percent, but since that was less than the overall market they lost market share. So did Ford and GM. And for those who care about these things, the Chevrolet Volt outsold the Nissan Leaf nearly two to one, but their sales are still miniscule. The Toyota Camry was the best-selling car in America and the Ford F-series was the top truck.
NISSAN REVIVES DATSUN
In an effort to boost sales in emerging markets, Nissan is reviving a dead brand. According to Reuters, the company will sell inexpensive cars in growing markets under the Datsun nameplate starting in 2014. Nissan will first introduce the brand in India, Indonesia and Russia. It plans to sell vehicles priced around $6,200. The company is aiming for sales of 300,000 units annually. Nissan originally used the Datsun name for vehicles sold outside of Japan but quit using it way back in 1981.
You may have heard that Mazda is replacing its midsize Crossover, the CX-7, with a smaller model for this fast-growing segment. Our own Isaac Bouchard had a chance to drive the new CX-5 around Northern California and here’s what he thinks of it.
The CX-5 is at dealers now and Mazda hopes to sell 40,000 units right out of the shoot. Those are aggressive goals but who knows the power of The Lorax? Maybe the movie tie-in will help move some metal.
What is going on with gas prices? Are we headed for a repeat of what happened in 2008? My thoughts on this issue, after the break.
WILL HIGH GAS PRICES HURT SALES?
Gas prices, they are a-risin’. The national average for regular unleaded is hovering around $3.75, with $4 likely and maybe even $5 in some places. So what does that mean for the auto industry?
The first question that comes to mind is, will high gas prices slow down currently robust car sales? Such was the case in spring 2008 when gas prices spiked. But so far it doesn’t appear as if higher gas prices are slowing sales. January was a decent month for sales, and February sales were even better. A big difference from 2008 is that the economy now is on the upswing, albeit an upswing that is slow and lumpy. In spring 2008, the economy was headed for a recession. An improving economy and all that comes with that – improved consumer confidence, more jobs, availability of credit – along with other factors likely will offset higher gas prices when it comes to car sales.
Tops among factors fueling robust car sales is pent-up demand. The age of the American fleet is, well, ancient. The average car is almost 11 years old; the typical truck is even older. In addition, the used-car pool is small because of the low level of new-car sales in the recent past and the small percentage of lease vehicles that normally would be turned back in to replenish the used-car supply. The tight supply of used cars is triggering high prices for used cars, making the purchase of a new car a more economical decision.
Already, however, high gas prices are changing consumer behavior in terms of what people are buying. Sales of small cars, small sport utilities and midsize cars are booming; sales of large cars, SUVs and trucks less so. February sales showed the small-car share of the market accelerated throughout the month. The same trend occurred among midsize sedans.
What will be interesting to see is if sales of hybrids and electric vehicles also increase. Indeed, with higher gas prices, the economics for hybrids and EVs improves – a shaky proposition at best – albeit far more on some models than others. Consumers have a far wider selection of such vehicles than they did during the gas-price spike of 2008, which did cause people to buy hybrids in bigger numbers than usual.
Edmunds.com lists 51 hybrids and eight electric vehicles either currently on sale or hitting showrooms soon. But, in contrast to 2008, those vehicles also have stiff competition from a bevy of small and midsize cars that are in the 30- and 40-MPG club.
In any event, gas prices, barring calamity in the Middle East, will subside. And if history is any indication, consumers will return to their usual behavior.
Hey, that’s a wrap for this week. But make sure you check out RoundAbout, tonight! The show kicks off at 6:30 p.m. Eastern Time at Autoline.tv. It’s a fun time so give it a look-see.
Anyway, I’m Michelle Krebs of Edmunds.com. Thank you for watching and I’ll see you next time.