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.
Deliveries of cars and light trucks jumped 8.3% for Honda and 7% 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.
With the U.S. auto industry winding down its first year of shrinking demand since the recession, manufacturers have cranked up incentive spending to clear inventory that’s built up on dealer lots. The 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 sell for more than the 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,” said Mark LaNeve, Ford’s U.S. sales chief, told analysts and reporters on Dec. 1.
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. A finalized figure won’t be available until Dec. 4 due to a reporting delay for Nissan Motor Co., which said an IT system outage would postpone the release of its results.
The Japanese automaker said it expected U.S. sales would be up 14% based on preliminary figures, which would be better than analysts’ average estimate.
“Vehicle sales are much stronger now than in the spring and summer,” said Jonathan Smoke, chief economist for Cox Automotive, which owns car-shopping websites including Kelley Blue Book. “The boost in sales over the last three months is a reflection of targeted incentive programs working to move confident consumers who are ready to spend.”
Volkswagen AG’s combined deliveries for its VW and Audi brands rose 3.4%, 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.
Toyota Motor Corp. posted a surprise 3% drop in November sales, dragged down by a 20% plunge in passenger car deliveries for its luxury brand Lexus.
Honda beat analyst projections thanks to sales surges of 57% for the Pilot and 25% for the CR-V.
Ford said Explorer deliveries jumped 25%, 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% and the GMC truck and SUV brand had an unusually weak month, with deliveries dropping 5.8%. 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