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Car Buyers Not Only Buying, But They're Paying More

In the best showing in months, sales of new cars, trucks and crossovers climbed to an annualized rate of 13.5 million during November as virtually all the domestic, Asian and European brands posted double-digit sales increases.

In fact, several makers — including both Audi and Hyundai—announced all-time records for November.

But the impact of the strong monthly showing is being felt well beyond the auto industry. Following a solid October, when sales were driven by so-called pent-up demand, many analysts feared the November numbers would slide along with the rest of the economy. But the strong showing in the automotive market suggests there’s more life to the overall economy than many had anticipated.

Among Detroit’s Big Three, Chrysler Group LLC reported a 45 percent increase in sales last month while Ford Motor Co. posted a 13 percent increase, including a 20 percent increase in its retail sales. General Motors Co. sales increased 7 percent on strong retail sales.

Hyundai, Kia, Mitsubishi, Volkswagen/Audi , Mercedes-Benz also all reported increases of 40 percent or better, while Nissan, Mazda, Suzuki, Porsche and the BMW Group had to be content with double-digit increases.

For the first time in months Toyota as posted a sales increase. Though only a modest 2.4 percent gain it was nonetheless the first sign that the company was beginning to work its way out of a production crisis triggered by the March earthquake and tsunami that devastated Japan.

Only Honda reported a decline among major makers, a dip of 4.5 percent overall, with sales of Honda brand vehicles down nearly 10 percent. The maker had been hoping for a stronger November but was slammed by Thai flooding which cut into the availability of key models.

The increase in overall industry sales tells only part of the story. Automotive data tracking service TrueCar.com estimated the average transaction price for light vehicles in the United States rose to $30,317 in November 2011, up $1,163, or 4.0 percent, from November 2010 and up $164, or 0.5 percent, from October 2011.

“Transaction prices have been creeping back up after a slight decline in August with average new vehicle prices (now back) over $30K,” said Jesse Toprak, VP of Industry Trends and Insights for TrueCar.com. “We are going to see automakers really push incentives in December to finish the year off strong,” he forecast.

Among the biggest gainers, Chrysler is crediting new products and a string of awards those vehicles have won in recent months.

“With sales up 45 percent, November was another huge month for the Chrysler Group and our highest year-over-year sales gain of 2011,” said Reid Bigland, President and CEO/Dodge Brand and Head of U.S. Sales.

Sales of the new 2012 Chrysler 200 midsize sedan increased 496 percent in November compared with sales of its predecessor the same month a year ago. The Jeep Wrangler set another monthly sales record, the SUV’s sixth-consecutive monthly record this year.

Meanwhile, GM reported its sales increased 7 percent as it delivered more than 180,000 cars and trucks during November.

Retail deliveries were up 15 percent compared with the same month a year ago and accounted for 77 percent of GM sales. Deliveries to fleets were down 14 percent.

“We are seeing a broad spectrum of customers return to the market,” said Don Johnson, vice president of U.S. sales operations. “Truck sales showed a very solid increase, as we expected, but the momentum building behind our most fuel-efficient vehicles was even stronger.”

So far this year, all four GM brands have increased their sales compared with the same period a year ago, on the strength of double-digit increases in retail sales.

Ford brand retail sales were higher for most products, with double-digit gains posted by Fiesta, Fusion, Escape, Explorer, F-Series, Econoline and Ranger.

“With gasoline prices continuing to track higher than last year, consumers continue to value fuel economy – no matter what size or kind of vehicle best meets their needs,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. “Most Ford products deliver best-in-class fuel economy and provide customers an opportunity to choose what best works for them – EcoBoost technology or electrified vehicles.”

Ford plans to build 675,000 vehicles in the first quarter of 2012, up 3 percent compared with first quarter 2011.

Notably, the November sales figures suggest that buyers are returning to virtually all key market segments. The subcompact Versa might have been Nissan’s driver, with sales rising 38 percent, but the Japanese maker reports SUV and truck sales were up 32 percent.

“We are seeing a broad spectrum of customers return to the market,” noted GM’s Johnson. Industry officials gave at least some of the credit to the increased availability of credit. But there also appears to be less concern about fuel costs as pump prices hold steady or even decline in most parts of the country,

Though consumers might have been getting ready for the upcoming holiday gift season, Hyundai officials said they experienced a strong surge in demand on post-Thanksgiving Black Friday. The maker’s volume was up 22 percent for November, giving it an all-time record for the month.

Audi, meanwhile, ended the month with a 15.2 percent gain — which brought its year-to-date sales total to 104,906. That, in turn, beat the German maker’s all-time record total of 101,629 which it recorded for all of 2010.

Up 40.1 percent, Audi’s sibling Volkswagen brand was another solid performer for November, with a 40.7 percent year-over-year increase.

“November has been a tremendous month for Volkswagen,” said Jonathan Browning, President and CEO, Volkswagen Group of America, Inc. “With the 2012 Passat named Motor Trend’s Car of the Year, anticipated improvements in J.D. Power’s Sales Satisfaction Index and once again double-digit sales growth, the proof points of German Engineering and our commitment to the U.S. market are all starting to come together.”


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