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US: Mad March tricks many sales analysts

By Bill Cawthon | 4 April 2011

Nissans US-built Altima was the top-selling passenger car in March, edging out both the Toyota Camry and Honda Accord

Nissan's US-built Altima was the top-selling passenger car in March, edging out both the Toyota Camry and Honda Accord

March US light vehicle sales tricked many industry analysts. After a strong start propelled by the momentum of an exceptional February, March got hit with Middle East unrest, rapidly rising oil prices and the Japanese disaster. Forecasters, anticipating negative consumer reaction, trimmed their estimates of March’s seasonally adjusted annualised sales rate (SAAR) to as low as 12.5m units.

Instead, March delivered a SAAR of 13.11m, the second best since the “cash-for-clunkers” programme. Total light vehicles sales hit 1,241,951, an improvement of 12.4% over March 2010 based on daily sales rate (DSR).

There were significant gains and some records set last month. Nissan set an all time sales record. Hyundai and Kia continued to outperform, setting new monthly and first quarter records. Audi also established new monthly and first quarter benchmarks with very strong sales of the A8. BMW’s Mini brand set a new March record.

There were changes in the rankings: Ford outsold GM for the month as the General focused more on retail sales and cut incentives. Depending on the source, Nissan either outsold Chrysler or came very close. Ward’s called it for Nissan by 0.1% while other sources give the lead to Chrysler by 0.5%.

Chrysler delivered its first 500 Fiats in March and cars were the big factor in the company’s Detroit-leading sales gains. Car sales improved by 45.9%, accounting for 27.6% of total turnover, a big jump over the more typical 18.7% in February.

Toyota came up short in March, down 9.2% due to weak light truck sales. The Camry dropped to third in passenger car sales as the Nissan Altima surpassed both it and the Honda Accord to take the top spot. Lexus improved slightly, coming in second behind Mercedes in the premium segment for the month, but remained in an unaccustomed third place in the year-to-date (YTD) rankings.

Light truck volume has declined the past few months, down to 48.3% of the market from 54.5% in January and 51.2% in February, but it’s worth noting the truck share was 49.8% last March, so the year-over-year drop is relatively small.

While they have moved the market from trucks to cars, fuel prices haven’t started a rush to the smallest cars, although sales of the Prius and Insight hybrids spiked in March. Mid-range and compact cars seem to be the prime beneficiaries of the shift.

March dodged the bullet but that won’t be true for at least April and May. Disruptions to supply are already being seen. Especially tough to gauge will be the impact on hybrids and new electric cars due to their dependence on Japanese battery technology. Most of Japan’s production facilities escaped physical damage but all depend on massive amounts of electricity and a chunk of the national supply went down with the Fukushima Daiichi plants.

This presents an opportunity for the Detroit Three – if they can resolve supply chain issues. While the Japanese are repairing and rebuilding, there will be a void to be filled. A Ford on the dealer’s lot today may trump a Toyota that isn’t or that carries a dealer upcharge due to scarcity. With all three Detroit automakers now able to play in all the major segments, the coming months should be interesting. Just watch out for the Koreans.