September 5, 2012 in Business

Auto sales hit 3-year high

Big pickup trucks drive increase as U.S. buyers show confidence in economy
Tom Krisher Associated Press
 
Revving up

In overall sales, Toyota rose 46 percent, while Honda climbed 60 percent. VW kept its stunning growth going with an increase of 63 percent.

DETROIT – Big pickups carried U.S. auto sales to their highest level in three years.

Demand for full-size pickups jumped 16 percent in August, helping to make it the strongest sales month since August 2009. Overall auto sales increased 20 percent from a year earlier to nearly 1.3 million, according to Autodata Corp.

The rising demand shows that businesses need to replace aging trucks and feel more confident about the recovery in U.S. housing – an industry where pickups are essential for hauling equipment and crews.

“Businesses don’t usually go buy a fleet of trucks unless they have good reason to believe that business will be ramping up,” said Jesse Toprak, vice president of market intelligence for the TrueCar.com auto pricing service

Ford, GM and Chrysler, the biggest makers of full-size trucks, notched double-digit gains in overall sales last month.

In pickups, Ford’s F-Series, the top-selling vehicle in America, saw a 19 percent sales increase, as did Chrysler’s Ram pickup. Sales of General Motors’ Chevy Silverado rose 4 percent, while the GMC Sierra was up 9 percent. Toyota’s struggling big truck, the Tundra, posted a huge increase of 68 percent.

The rising demand helped push total U.S. auto sales last month to an annual rate of 14.5 million.

Pent-up demand is one reason for last month’s truck increase. The average vehicle on U.S. roads is nearing 11 years old, and some are wearing out.

Gas mileage also is playing a role in the pickup increase. Newer models are lighter than older ones and can be equipped with small but powerful V-6 engines. A business owner can cut costs dramatically by replacing a 10-year-old pickup, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting firm.

The strong sales in August can’t be attributed to deals. Discounts on the F-150 and Ram pickups fell compared with last year, while they rose only 5 percent on Chevy’s Silverado, to $4,787. The F-150 incentives are the lowest since 2007, when Ford offered an average of $3,598 per truck, according to the Edmunds.com website.

August auto sales, when calculated at an annual rate, are far stronger than last year’s 12.8 million. But they’re far short of the recent peak of 17 million in 2005.

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