US vehicle industry on a roll
More Americans are buying cars that say “look at me”. European cars are in demand and SUVs are popular picks.
Luxury vehicles such as Audis and Volvos drove off dealers’ yards at a furious pace last month, and, combined with sizzling demand for SUVs, helped the American auto industry roll on toward its best annual sales since before the recession.
July sales rose 5 per cent to more than 1.5 million, according to Autodata Corp.
Subaru reported the biggest sales gain, of 10.5 per cent, over last July. General Motors, Fiat Chrysler and Hyundai all had 6 per cent sales increases, and Honda and Nissan had 8 per cent gains.
Ford’s US sales rose 5 per cent, and Volkswagen’s 2 per cent. Toyota’s sales were flat, hurt by a big dip in car sales.
The high demand for big, pricey vehicles is defying recession-era predictions that Americans would downsize and stop flaunting their wealth.
Luxury sales were up 10 per cent in the first six months of this year; in the same time, mass-market vehicle sales rose just 3 per cent, according to car shopping site TrueCar.com.
The surge in SUV sales is due in part to low petrol prices. Sales of Nissan’s new Rogue SUV jumped 51 per cent last month, and sales of GM’s Buick Encore were up 68 per cent.
Discounts to clear 2015 models also lured buyers. Sales of midsize sedans have been struggling as Americans pass them over for small SUVs, so car-makers enticed buyers with zero-percent financing deals on Toyota Camry, Ford Fusion, Nissan Altima and other sedans.
It worked. Altima sales rose 27 per cent and set a July record.
Status has been another big motivator. Luxury brands made up 11.5 per cent of vehicles bought this year, up from 10.2 per cent three years ago, according to TrueCar.
Sales of luxury brands have been growing more quickly than mass-market sales since 2013, but the pace is accelerating for several reasons, says TrueCar’s executive vice-president, Larry Dominique.
Makers of luxury cars are adding more models at lower prices, a move that is attracting new buyers.
Dominique said that before the recession, when housing values were high, the industry believed luxury sales were inflated because people were borrowing against their home values. But that wasn’t the case. After the recession, luxury sales took off even before home values had recovered.
“People who buy luxury want luxury. It’s a cultural phenomenon,” he said.