US auto sales best in 6 years, demand seen ebbing - Fox 2 News Headlines

US auto sales best in 6 years, demand seen ebbing

Posted: Updated:
DETROIT (AP) -

Automakers are going to have to work a little harder for your business in 2014.
 
After four years of strong sales increases -- and few discounts -- as the economy improved, U.S. demand for new cars and trucks is expected to slow this year. That could mean better deals for buyers as car companies fight to increase their share of the market.
 
The industry got a taste of what's to come in December, when General Motors, Toyota and Volkswagen all saw their sales fall from a year ago. One reason: Competitors like Ford and Honda increased their incentive spending on hot sellers like pickup trucks and midsize cars, according to TrueCar.com, which tracks car prices. Cold weather and strong sales over Black Friday in late November also pinched December sales, automakers said.
 
This year's slowdown is inevitable, analysts say. Many people who held on to their cars through the recession have now bought new ones. Those who haven't may not be in any rush, because cars are lasting longer than ever before. And unless there's a strong uptick in the economy, families aren't likely to buy a third car.
 
Alec Gutierrez, senior analyst for Kelley Blue Book, expects U.S. sales to increase by around 700,000 to 16.3 million in 2014. That compares to increases of more than 1 million each year since 2009, when U.S. sales bottomed out at 10.4 million.
 
"Sales are approaching an equilibrium level of demand based on the needs of population and the number of licensed drivers in the country," he said.
 
So 2013 could be remembered as the last of the boom years. As automakers reported full year sales Friday, analysts were expecting an increase of more than 1.2 million -- or 8 percent -- to around 15.6 million. It would be the best performance since 2007, when 16.1 million new cars and trucks were sold.
 
Ford led all major automakers in 2013 with an 11 percent gain to almost 2.5 million vehicles. Chrysler and Nissan posted 9 percent gains. GM, Toyota and Honda each posted 7 percent gains. GM sold 2.8 million cars and trucks in the U.S., compared to just over 2.2 million for Toyota. Hyundai's sales rose 2.5 percent.
 
Among major automakers, only Volkswagen struggled, with sales falling 7 percent as its vehicles aged compared with rivals.
 
Gutierrez said Honda offered $3,000 in bonus cash to dealers in December for every vehicle they sold beyond their 2012 numbers. And Ford said it spent $600 more per vehicle on incentives in December, likely taking aim at GM's new pickup trucks. Those are the kinds of tricks buyers can expect to see more of this year.
 
"We think there's going to definitely be more competition," said Larry Dominique, president of Automotive Lease Guide, a company that tracks lease costs and car prices.
 
On a conference call to discuss December results, General Motors executives made several references to competitors raising discounts to boost sales, especially on full-size pickup trucks. While they pledged to stick to their strategy of selling on value rather than price, U.S. sales chief Kurt McNeil said GM also has to respond to the market.
 
Industrywide inventory is rising, and that could also increase discounts because carmakers will have to sell off excess vehicles. But McNeil said prices likely won't come down too much because the underlying economy is strong. Also, carmakers closed plants and got leaner during the recession, so the country is no longer seeing the kind of overproduction it saw a decade ago.
 
The average price of a new vehicle in December was $32,890, which was about the same as a year ago, according to Kelley Blue Book.

  • Local NewsLocal NewsMore>>

  • Child, 3, hospitalized after falling from second-story window

    Child, 3, hospitalized after falling from second-story window

    Monday, September 1 2014 11:31 PM EDT2014-09-02 03:31:18 GMT
    A 3-year-old child is receiving treatment at St. John hospital after falling from a second-story window in Detroit this weekend.
    A 3-year-old child is receiving treatment at St. John hospital after falling from a second-story window in Detroit this weekend.
  • Boy, 5, thrown from father's dirt bike and run over

    Boy, 5, thrown from father's dirt bike and run over

    Monday, September 1 2014 11:18 PM EDT2014-09-02 03:18:50 GMT
    Residents inside Northport Apartments in Macomb Township say that Sunday afternoon they saw a 27-year-old neighbor riding a dirt bike with his 5-year-old son along busy Garfield Road.Neighbors say they've seen him riding before -- but this time he had his child with him."The first thing that caught my eye was he was riding in his dad's lap," neighbor Tim Hale said. "And they were weaving throughout drainage ditches which are pretty steep." Macomb County sheriffs say the small, orange dirt bik...
    Residents inside Northport Apartments in Macomb Township say that Sunday afternoon they saw a 27-year-old neighbor riding a dirt bike with his 5-year-old son along busy Garfield Road.Neighbors say they've seen him riding before -- but this time he had his child with him."The first thing that caught my eye was he was riding in his dad's lap," neighbor Tim Hale said. "And they were weaving throughout drainage ditches which are pretty steep." Macomb County sheriffs say the small, orange dirt bik...
  • Flooding, power outages from latest round of storms

    Flooding, power outages from latest round of storms

    Monday, September 1 2014 10:14 PM EDT2014-09-02 02:14:26 GMT
    More flooding and power outages are being reported after the latest batch of storms.
    More flooding and power outages are being reported after the latest batch of storms.
  • Download the FOX 2 Apps


  • FOX 2 News Five-Day Forecast
Powered by WorldNow

WJBK-TV | Fox 2
16550 West Nine Mile Rd.
Southfield, MI 48075

Main Station: (248) 557-2000
Newsroom: (248) 552-5103

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices