New Car Sales Are Revving Up
New models plus incentives have more Americans sporting new wheels.
Look for new-car sales to continue to climb for the rest of this year, with sales for the year likely totaling just shy of 12 million. Automakers had hoped for a better year, but many potential buyers want the economy to show more oomph before taking the plunge.
Still, 2010 will go into the books as far better than 2009 -- when the deepest recession since the 1930s held sales to just 10.4 million vehicles -- and will set the stage for a stronger 2011 when sales are likely to reach 13 million.
The slow, ongoing recovery in coming months and, especially, an easing of credit are underpinning stronger car sales, helping to ensuring black ink for most automakers.
Ford is doing best. It will lift its market share to around 17% by year-end, from 15.6 % in 2009, while GM, Toyota and Chrysler each lose ground.
But General Motors is on the comeback trail, likely retaining its spot as the top-selling automaker in the U.S. this year with a 19.4% market share.
Its redesigned Chevy Equinox and Cobalt, Buick Regal and Lacrosse, Cadillac SRX and other models are posting decent sales. And while the Chevy Volt -- a plug-in electric hybrid vehicle -- draws a lot of press, GM’s Chevy Cruze, set to hit the market in December, is likely to be a bigger hit.
In fact, the Cruze is emblematic of the new GM. The compact vehicle sports an ultra-smooth-ride rear suspension, sound-deadening glass and materials and an interior that rivals the roominess of midsize sedans. It will be priced competitively with Honda Civics and Toyota Corollas, thanks in part to GM’s bankruptcy court-led reorganization that sliced several thousand dollars off the cost of making each vehicle via lower labor and operating expenses, says David Cole, chairman of the Center for Automotive Research, an automotive consultancy.
GM will soon issue an initial public offering of stock, with proceeds going to help repay the government for its $43 billion majority stake in the company. The Obama administration, which effectively controls the company via its handpicked board members, is eager to show taxpayers that they’ll be repaid in full.
“GM also is eager to pay back the U.S. because the money is a ‘negative’ with some consumers who are buying Fords instead,” says George Magliano, director of automotive research for North America with IHS Automotive, another industry consultancy.