February Auto Sales are Strongest in 4 Years

First Up 03/02/12

March 2, 2012

February Auto Sales are Strongest in 4 Years
Despite the threat of rising gas prices, the U.S. auto industry continued its uptick in February, reports AIADA’s Market Watch. Pent-up demand in the auto market, a strengthening economy, and new products from automakers contributed to an overall sales increase of 15.7 percent over February 2011. International brands were up 18 percent. Volkswagen led the pack – logging its strongest February for sales since 1973 – with sales up 42.5 percent over February 2011. Mazda also demonstrated a 32.3 percent sales increase, while Hyundai improved by 17.5 percent, and Subaru was up 17 percent. Honda and Toyota both turned in a month of strong auto sales, up 13.3 percent and 11.5 percent, respectively. “New products are converging with pent up demand and an improving economy, resulting in strong sales for international dealers,” said AIADA President Cody Lusk. “I am confident 2012 will continue to be the best year our industry has seen in quite awhile.” The seasonally adjusted annual rate (SAAR) for light vehicles was estimated by AutoData Corp. at 15.1 million units – the highest since February 2008. Read the rest of AIADA’s February edition of Market Watch here.

Subaru Gets Its Moment
According to Forbes, Subaru has always been the well-regarded, but often overlooked runner-up to big Japanese names like Toyota, Honda, and Nissan. However, this week, Consumer Reports named Subaru as the top-quality brand in its list of the best vehicles for 2012. That not only brings bragging rights, but can also lead to sales. “Subaru’s score of 75 – two points higher than last year – reflects better test scores for such redesigned models as the Impreza, Legacy, and Outback over the last few years. The 2012 Impreza, which Consumer Reports just tested, now tops the small-sedan class and is the Consumer Reports Top Pick in that category. Subaru’s average road-test score of 82 is the highest in Consumer Reports analysis,” wrote the magazine. Even before it won the title, Subaru had a good February. Its sales of 25,374 were up 17 percent over February 2011, figures showed Thursday, and its sales for the first two months of 2012 are up 19 percent over 2011. Its vehicles’ symmetrical all-wheel drive capability is especially important to buyers in New England and in Northwestern and Midwestern states where dramatic weather can make driving treacherous. Read more about Subaru’s success here.

Unions to Push to Block 'Right to Work' in Michigan
The United Auto Workers (UAW) and other unions will push to get a measure on the November ballot in Michigan to prevent "right to work" advocates from changing the state's labor laws, the UAW said Thursday. UAW President Bob King said that a coalition of unions had agreed to move forward with an effort to change the state's constitution to bar "right to work" at a meeting of union presidents in Washington on Wednesday. "We hope that Michigan can lead what will then be movements around the United States to guarantee workers rights to organize and to collective bargaining," said King. Michigan Gov. Rick Snyder has repeatedly said he doesn't want to consider "right to work" legislation this year – but hasn't ruled out taking it up down the road. According to The Detroit News, Indiana became the 23rd state last month to adopt the "right to work” legislation that allows unionized workers to skip paying dues – and the first state to do so since Oklahoma did so in 2001. But union-heavy Midwestern states – before Indiana – hadn’t agreed to "right to work" laws. Click here for the latest on the UAW’s attempt to block “right to work” efforts in Michigan.

Toyota Will Increase Transmission Production in W.Va.
Toyota said Thursday it will increase annual production of the 6-speed automatic transmissions built at its Buffalo, W.Va., operations by 120,000 units to 520,000 units. The $45 million investment will create 80 more jobs at the plant that builds transmissions for the Toyota Avalon, Camry, Sienna, and Venza and the Lexus RX 350 – all vehicles built in North America. According to Automotive News, the transmission is also built in Japan and at AW North Carolina, a subsidiary of Aisin Seiko Co., a global drivetrain components supplier based in Japan. But a Toyota spokeswoman said Thursday’s announcement is “an incremental volume increase” and would not shift production away from other plants. “Toyota’s philosophy is to produce where we sell,” she said in an e-mail when asked whether the move was related to the yen’s value. “There is more demand for 6-speed automatic transmissions, and we are adding volume as a result.” Besides the investment in the West Virginia plant, Toyota will create 25 new jobs and invest more than $10 million in the Bodine Aluminum factory in Troy, Mo., which will provide various parts to Toyota’s transmission plant. For the latest on Toyota’s plans to increase transmission production at its Buffalo, W. Va., plant, click here.

Prospects Appear Strong for Dealers
Though auto dealers reported varying sales results from region to region during the early part of 2012, one thing seems fairly clear: the prospects for the future looks bright. In fact, reports Auto Remarketing, the Federal Reserve noticed widespread optimism among dealers in its latest Beige Book report. “All districts reporting on sales outlooks conveyed optimism,” the Fed noted. Among the 12 Federal Reserve Districts, Philadelphia, Atlanta, St. Louis, and Minneapolis posted sales increases, while Chicago had a mixed bag. “Chicago also reported sales increases in January, but noted that sales were down slightly in early February,” officials noted. “Auto dealers in the New York, Cleveland, and Richmond Districts reported a slowdown in recent auto sales, while auto sales held steady in the Dallas District and contacts in the Kansas City District reported a post-holiday lull in sales.” The Fed shared more about each region in its report and broke down the auto market in each.Click here to check out the latest Beige Book report on dealer prospects in the U.S.’s 12 regions. For coverage from Auto Remarketing on the Fed’s findings, click here.

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