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Consumers Scarf Up Compact Cars, Hybrids and Large Pickups in August

Consumers Scarf Up Compact Cars, Hybrids and Large Pickups in August

By Jeff Youngs, September 06, 2012
Compact cars, such as the Ford Focus and Honda Civic, were popular choices for U.S. new-vehicle buyers in August, due in part to the continuing rise in gas prices--topping $4 per gallon at the pump on the West Coast. Also, many buyers got good deals because of end-of-model year sales events, and there were a few incentives from some of Japan's automakers to recoup market share after last year's inventory shortages due to production setbacks following the 9.0 magnitude earthquake and tsunami in Japan.

In August, buyers continued to replace their older vehicles with new fuel-efficient models and were able to finance new models more easily because credit is less tight, according to J.D. Power retail transaction data. U.S. auto sales for the month rose nearly 16% from the same month a year ago. Buyers continued to purchase compact models that are considered gas sippers, such as the Ford Focus, Honda Civic and Toyota Corolla. Several smaller GM car models--the compact Chevrolet Sonic and Cruze and subcompact Spark--set August sales records.

Buyers also ponied up to purchase or lease more cars with alternative powertrains. Chevrolet Volt sales set a new monthly record, according to GM, and Toyota Prius deliveries were double from last year's inventory-strapped sales. VW's new Beetle gained sales momentum in August with more than 100 sales of the fuel-efficient TDI (diesel) version.

Although more new-vehicle buyers looked for fuel sippers in August than a year ago, more large pickups were purchased than last year. A Ford economist said that ramped-up truck sales could align with the fact that housing values moved in a positive direction recently, compared with 2010 (based on the latest S&P Case Schiller index). This could also mean that there is beginning to be more of a need for replacement pickup purchases in the business trade. Large pickups posted a significant double-digit gain, with the Ford F-Series outperforming the industry and strong double-digit sales gain for the Fiat-Chrysler Ram truck line. More Toyota Tundra pickups also were delivered in August than a year ago.

Compact crossovers, or car-based utilities, were still favored in the U.S. market, mainly due to the fact that a majority are powered by 4-cylinder engines for better gas mileage and also provide utility and function. Models that shared the spotlight with other in-demand models in August were the Chevrolet Equinox and Ford Escape, while the Honda CR-V and Toyota RAV4 nearly doubled their sales from last year's less-than-sufficient inventories.

Altogether, U.S. car and light-truck sales in August rose 15.5% from a year ago, to 1.283 million units, according to analysis by J.D. Power's Power Information Network(R) (PIN) and LMC Automotive. All percentages are adjusted for the number of selling days in August of both years--August 2012 had one more selling day than the same month did a year ago.

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