Big Auto Sales Mean Small Discounts in March
March auto sales numbers are trickling in with good news for most automakers, but bad news for consumers hoping to get a deal on a new car.
Ford reports a 6 percent sales increase compared with March 2012. The Ford Fusion sold more than 30,000 units in March, which Ford says is a record for the model. The Ford Escape also broke its best monthly sales record, selling 28 percent more models than in March 2012. Ford also says that sales of the Ford Explorer are up 33 percent compared with a year ago.
Ford isn't the only brand with record sales, however. In its sales report, Chrysler Group LLC says that it had its best sales month since December 2007. March marks the company's 36 consecutive month of sales gains, year over year. Overall, Chrysler Group sold 171,606 cars, SUVs, trucks and vans in March, which is a 5 percent increase over March 2012. The Ram Truck brand posted a 24 percent sales gain, the Chrysler brand saw sales increase 35 percent compared to March 2012 and Dodge sales were up 15 percent compared to last year. One dark spot in Chrysler's news is the Jeep brand: Jeep sales were down 13 percent compared to March 2012. Chrysler says the drop is due to the end of the Jeep Liberty and ongoing product launches. Though Jeep sales were down compared to last year, March Jeep sales were 27 percent better than February Jeep sales.
Volkswagen reported a 3.1 percent increase in March sales compared to last year. The German automaker says they've had the best sales year so far since 1973. More than 22 percent of VW sales in March were of diesel models, indicating that high-mileage diesel engines are gaining traction with U.S. consumers.
As auto sales surge, analysts are revising their sales forecasts for the year. Edmunds now estimates that 15.5 million cars, trucks, SUVs and vans will be sold in the U.S. in 2013. That's an increase of half a million sales from their earlier prediction. They attribute the surge to "... car shopper resilience in the face of continued fiscal issues at home, and more recently, flare-ups of fiscal drama in Europe. Buyers are also feeling wealthier thanks to rising home prices and the strong stock market, and refinancing home mortgages as well as an improving labor market have put additional cash in some buyers' pockets. Meanwhile, pent-up demand continues to release, thanks to the aging fleet and more widely available credit."
In an email to reporters, Edmunds says that industry spending on incentives is falling as sales rise. Compared to last month, automakers spent nearly 2 percent less on incentives and discounts in March. That tracks with U.S. News Best Cars' best car deals research. Because sales are strong, automakers don't need to tempt shoppers with deep discounts. According to Edmunds, on average, automakers offered $2,357 in discounts in March. GM was the biggest spender on incentives, offering an average of $3,472 off its vehicles. Though that's a big discount, it's less than what the company offered in February. On the other hand, Honda offered an average of just $963 off its vehicles. That's almost 8 percent more than the company offered in February, but nearly 3 percent less than the discounts the company offered in March 2012. If you're looking for a new car, it makes sense to buy now, before incentive spending drops further.
We'll share more auto sales news as it's released.
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