October Auto Sales: The Leading Edge Of An Economic Rebound?
While U.S. economic news is hardly good, somehow auto sales again proved to be a bright spot in October.
As the housing sector remains on a downward slide in much of the country, manufacturing growth slowed, and economists wondered how Greece's nearing economic meltdown will affect the global economy, Americans are buying cars at a surprisingly hot rate. At early tallies, industry-wide auto sales this past month looked about ten percent higher than last October.
General Motors [NYSE: GM] and Ford Motor Co. [NYSE: F] both reported modest gains year-over-year, but it was Chrysler that really picked up the pace in October. Sales of the Chrysler brand itself were up 28 percent, compared to last October, while company-wide, gains were almost as good, at 27 percent.
Volkswagen, which just started assembling 2012 Passat models in Tennessee, reported sales up about 40 percent, and Hyundai sales were up 23 percent, both compared to last October. And Kia continued to surge, with its calendar-year-to-date sales now more than 35 percent higher than this time in 2010. Mercedes-Benz, Audi, and Volvo also showed especially strong gains from last October.
The continued growth for those two Korean brands is all the more impressive when considering that Incentives for Hyundai and Kia, among major automakers, remained the lowest in the business—about $1,145 per vehicle, and down 23 percent from last year, according to TrueCar.com. Chrysler has managed to roll back some of its incentives, but it still gives out the most per vehicle; Honda, Nissan, and Toyota are also offering higher incentives than last year.
Honda revealed this past week that production of some of its models will be affected by the flooding in Thailand; furthermore, we reported today, it might also affect the rollout of a redesigned 2012 Honda CR-V. This comes on the heels of a dragging recovery from supply interruptions resulting from the catastrophic March earthquake in Japan.
Analyists for months have suggested that the auto industry is bucking the general economic trends because shell-shocked Americans had simply deferred vehicle purchases as long as they could.
That theory is beginning to be replaced with real optimism that this news might indicate that the economy is bouncing back on 'Main Street' terms. There are some signs that more Americans are finding jobs—and a number of economists expect good news in the next federal jobs figures for October, due this Friday. As a hint of that, the polling firm Gallup found in mid-October that unemployment was around 8.3 percent, down from 9.2 in late August and 10.0 a year ago. Gallup also noticed a significant drop in 'underemployment'—those working part-time who want to be full-time.
Read on for more details from the individual automakers:
General Motors: Chevrolet sales were up 6 percent, but slower sales at GMC, Buick, and Cadillac saw the automaker's figure up 2 percent versus last October. Retail deliveries were up a more impressive three percent. The automaker attributed the launch of the new Chevrolet Sonic and Buick LaCrosse eAssist, as well as strong sales of the Chevy Equinox and Camaro, plus the Cadillac SRX, Buick Regal, and GMC Terrain. More than 1,100 Chevy Volt models were delivered this past month.
Ford: Compared to last October, Ford Motor Company sales were up 6 percent versus last year. Leading that surge were sales of the company's utility vehicles, like the Explorer and Escape. And even though the Escape is about to be replaced, sales of the aged crossover were up 31 percent versus last year and at a record 206,696 sold so far this year. Fiesta, Focus, and Fusion were also up versus last October, while Ford-brand trucks were up a significant 8 percent from year-ago levels.
Chrysler: October sales were up 27 percent compared to last October, and Chrysler says it was the best October since 2007. The redesigned Compass sold 5,179 units, and the refreshed Jeep Wrangler moved 9,892 units. The Chrysler brand itself was up 28 percent, buoyed by the Chrysler 200, and Ram-truck sales were up 21 percent. So far, 2011 CYTD sales are up 23 percent through October, compared to the same period in 2010.
NHTSA: Toyota Electronics Have No ‘Sudden Acceleration’ Fault
So-called 'sudden acceleration' has a long and unfortunate history, almost destroying Audi sales in the mid-1980s after 60 Minutes accused the Audi 5000 of accelerating out of control at random.
Now, as previewed a few weeks ago, an NHTSA report finds no electronic cause for the phenomenon--and suggests that in the cases that involve Toyota vehicles fitted with event data recorders, or 'black boxes,' the accidents have been due to driver error.
Black boxes: No braking
Starting in 2007, various Toyota models have been fitted with black boxes that record a few seconds of the car's control inputs once an airbag has been deployed.
While this limits the number of accidents that can be analyzed, the results are still revealing. Of 58 data recorders analyzed by teams from both the NHTSA and Toyota, 35 showed that when the crash occurred, the brake pedal was not depressed at all.
Another 14 showed only partial braking, and 9 more indicated braking only just before the accident. The report said brakes were pressed and released, or both brake and accelerator were pressed together, in a handful of crashes.
Drivers may not actually know what pedal they're pressing during an emergy, explains Richard Schmidt, a psychology professor at the University of California, Los Angeles.
In an article in The New York Times, Schmidt noted that "sudden acceleration is very often caused by drivers who press the gas pedal when they intend to press the brake."
Only a subset of crashes
A plaintiff-lawyers' group, on the other hand, scoffed at the notion that the report exonerated Toyota in any way. It noted two concerns with the data presented from the subset of cases that involved event data recorders.
First, the NHTSA report does not address many of the complaints that occurred in pre-2007 cars and, second, many of the crashes occurred at speeds too low to trigger the airbag, meaning no data was recorded.
While the report may help allay concerns of widespread software flaws in Toyotas, the company is still dealing with recalls stemming from two known issues that have contributed to a small number of cases not attributed to driver error.
Two known causes
Those are "sticky" accelerator pedals that may rust to the point where they don't return to idle, and fitting of unapproved or aftermarket floor mats that can wedge accelerator pedals to the floor if they shift out of position.
In the case of the sticky pedals, attributed to an unapproved materials substitution by a U.S. parts supplier, Toyota has recalled the affected vehicles and is replacing the accelerator mechanism.
As for the floor-mat problem--believed to be the cause of a horrific crash last year in which a California Highway Patrol officer and his family were killed when their Lexus crashed and burned after accelerating to high speed--Toyota is shortening accelerator pedals in the affected vehicles so they cannot be entrapped no matter what floor mats are fitted.
Almost 10 million recalled
In the last year, Toyota has recalled 9.4 million vehicles worldwide to fix these two issues, including 7.5 million in the U.S.
An NHTSA statement carefully notes that the agency has "drawn no conclusions about additional causes of unintended acceleration in Toyotas beyond the two defects already known: pedal entrapment and sticky pedals."
And the agency stressed it is continuing to investigate the accidents, as is Toyota itself. The agency and NASA are testing whether electromagnetic radiation may interfere with vehicle electronics, bombarding vehicles with EMR at a Chrysler test facility.
For more information on those causes and Toyota's responses, see our summary, Toyota And Lexus Recall: Everything You Need To Know, which provides full details on the two largest recalls in North America to address accelerator pedal issues.
[Automotive News (subscription required), Detroit News]
This story originally appeared at The Car Connection
Link Love From The Car Connection: VW Throws Off Porsche’s Shackles, Peeking At The Mercedes 300SL Gullwing, And Hot Audi Concepts
If only -- Rumor has it that there's a new iteration of the legendary Mercedes 300SL Gullwing in the works. (Which is nice since the original ended production in 1957.) If produced, lucky buyers will be treated to a snazzy 370hp V8 engine, plus many of the design elements from the original--including the gullwing doors, of course. Please, Santa. Please? [WorldCarFans]
Fantasyland -- Audi recently backed a contest at the Munich University of Applied Sciences, asking students to design cars of the future. The results are fairly awesome, though we're not sure all of them will fit through the Taco Bell drive-through of the future. [AutoMotto]
Turnabout -- The power struggle between Volkswagen and Porsche has been brewing for some time. Though smaller than VW, Porsche steadily, stealthily clawed its way to majority ownership over the past three years or so. But now Porsche's in financial trouble, and the 'Wagen looks like it's ready to do some spankin'. [Autoweek]
Fog lifting? -- We mentioned recently that there are signs of light at the end of the economic tunnel. As further proof, America's biggest auto dealer, AutoNation, has reported a...we think we have this right...a profit. And they're expecting things to improve later in 2009. We're letting out a tentative hooray. [CNN]
Cars on cam -- Have nothing to do all day? Then check out the webcam recently installed at the Nurburgring racetrack. It only refreshes once a minute, but hey, you might see something sweet. And what else are you gonna do on Friday? [Carzi]
"Fuel efficiency" -- Speaking of distractions: here's one of the dumbest videos we've seen in a long time. We have no further comment. [YouTube]
This story originally appeared at The Car Connection
