As most people know, or at least hear about whenever car sales are bad, the auto industry is “Cyclical” by nature. This is usually used to describe how the business of auto sales are often subject to the ups and downs of various economic and systemic pressures…
Usually, we hear about the cyclical nature of the car business when it is used to describe problems. Welcome to the part of being in a cyclical business that is exhilarating; the ride back up! Of course I know we have been on the upside for at least two years now, but for the first time since the recovery started we are seeing VERY STRONG action on the part of consumers. With many economists calling for over 15 million new vehicles to be sold in 2013 and used vehicles at record demand levels, it is simply a GREAT TIME to be in the car business.
I wanted to share some excerpts from Jesse Snyder’s article in Automotive News where the case is made for activity in December generating sales and demand momentum going into 2013. Combined with the normal spring and summer hot selling seasons, I have little reservation that many dealerships will be setting all sorts of sales and profit records during the first half of 2013.
So, it is time to put on your selling shoes and get ready to improve productivity on the part of yourself and your team. Most dealerships are still staffed at recession levels for their customer facing and support teams. This is not going to work. For dealers, if you want to get your market share when total sales are rising, your sales team has to generate more business. This market is going to reward the dealers who build up there sales and support teams with additional market share. For the dealers who do not act like entrepreneurs by anticipating and building out to their staffing needs IN ADVANCE based on a 16 million SARS, they are going to be left in the dust by those who do.
Take a look at Snyder’s article excerpts below and start making plans to build out your organizations and their staffing levels so you can handle more sales and profits. the ROI on properly trained employees is never better than when we are in the upward trending part of the auto industry’s cyclical patterns.
Automotive News cites strong December sales as building momentum for 2013
| – Excerpt from Automotive News article
The U.S. seasonally adjusted annual sales rate was 15.4 million, the second straight month above 15 million and a performance that created momentum for 2013.
A strong December helped push 2012 U.S. light-vehicle sales to 14.5 million units, up 13 percent from 2011 and the highest volume in five years.
Automakers sold 1.4 million cars and light trucks in December, 9 percent above a strong year-earlier performance. The seasonally adjusted annual sales rate was 15.4 million, the second straight month above 15 million and a performance that created momentum for 2013. The spoils were shared unequally. Volkswagen Group continued to surge as its namesake brand posted a 35 percent gain, also finishing the year up 35 percent.
The two biggest automakers, General Motors and Ford, lost market share with their single-digit percentage gains for the month and the year. Japanese rivals Toyota and Honda scored the biggest share gains. And Honda’s Acura brand dealt a prestige blow to GM’s Cadillac.
Although he doesn’t expect 2013 to match the double-digit gains of the past three years, Toyota Motor Sales President Jim Lentz said low-cost financing, fresh products and U.S. population growth will keep the industry going.
“We see continued economic stability [this] year with modest growth,” he said. “We expect the auto industry to remain at the forefront of an improving economy.”
Jesse Toprak, vice president of TrueCar.com, also expects 2013 auto sales to hit 15.5 million, a 7 percent gain.
“December finished a year of very healthy recovery on a high note,” he said. “As long as the financial markets are steady, auto sales will be OK.”
Some of the highlights:
Boosting volume but losing share
In a strong market like 2012’s, it’s hard to match the overall industry’s 13 percent growth. The eight biggest automakers all posted higher sales in 2012, but only four gained market share.
The market share winners: Toyota Motor Sales, up 1.5 share points; American Honda, 0.8 point; Chrysler Group, 0.7 point; and Volkswagen Group of America, 0.5.
The biggest share losers in 2012 were General Motors, down 1.7 share points, and Ford Motor Co., off 1.3 share points. Nissan North America lost 0.3 of a share point, and capacity-constrained Hyundai-Kia Automotive fell 0.2 of a point, ending its string of U.S. gains.
Two-year share reversals
But over a two-year period, comparing 2012 to 2010, four automakers show a reversal of form. Last year both Toyota and Honda regained share they had lost after natural disasters in 2011, but they’re not back to normal. Over two years, both are down 0.8 of a share point.
And while Hyundai-Kia and Nissan lost share last year, they’re up compared with 2010.
BMW tops Mercedes in luxury race
With an aggressive lease pull-ahead program, BMW brand handily outsold Mercedes-Benz in December, wining its second straight U.S. luxury brand title.
In 2012, BMW sold 281,460 light vehicles and Mercedes-Benz 274,084 (excluding Sprinter commercial vans). A year ago it was BMW by 2,715 units.
Lexus, the best-selling U.S. luxury brand from 2000 to 2010, boosted 2012 sales 23 percent but again finished third with 244,166 units.
Acura outsells Cadillac
Acura moved to fourth place in U.S. luxury sales with a 27 percent gain in 2012, dropping Cadillac one spot to No. 5 as its volume fell 2 percent.
Luxury segment sales rose 13 percent to 1.6 million in 2012. The smaller luxury brands kept the same positions as in 2011: in order after No. 6 Audi were Infiniti, Lincoln, Volvo, Land Rover, Porsche and Jaguar.
Camaro tops Mustang
In a pony car shootout, the Chevrolet Camaro outsold the Ford Mustang by 1,396 units. The tally: Camaro, 84,391, Mustang 82,995. In 2011, the Camaro won by almost 18,000, but its volume fell 4 percent last year, while Mustang sales jumped 18 percent.
Subaru, Mazda up, Mitsubishi down
Subaru of America posted a 9 percent December gain and finished the year up 26 percent higher. Lower-volume Mazda surged 22 percent in the final month to push its 2012 total up 11 percent to 277,046 units.
But Mitsubishi was off 18 percent in December and 27 percent for the year.
Volvo ekes out a 2012 gain
Volvo Cars North America finished the year up 1 percent with 68,117 sales – with all but 69 of the 877 unit increase coming in December.
F series, Camry are top truck, car
Best-selling U.S. truck: it’s the Ford F series again. On the car side, it’s the Toyota Camry, again. Both enjoyed healthy gains: Sales of the F series jumped 10 percent to 645,316; the Camry soared 31 percent to 404,888.
Another silver for Silverado
Chevrolet’s Silverado pickup, meanwhile, held on to its rank as No. 2 seller among all vehicles, thanks to a late surge. After trailing through 11 months, the Silverado recorded 50,699 December sales to 31,407 for the Camry. That was worth a silver, at 418,312 for the year.
You can reach Jesse Snyder at email@example.com.