Driven by Gas Prices, August Sales Take Off

First Up 09/05/12

September 5, 2012

Driven by Gas Prices, August Sales Take Off
August auto sales were the highest since 2007, even beating 2009’s Cash for Clunkers-inflated numbers. Sales for all brands, unadjusted for business days, were up 20 percent from August 2011 and 14.7 percent year over year. Sales were up 11 percent from July. According to AIADA’s Market Watch, small cars were big winners in August. Driven by rising gas prices, the small vehicle segment grew 47.4 percent from August 2011. Japanese automakers continued their resurgence from a year ago with Honda improving 57.9 percent and Toyota up 47.5 percent. Lexus topped the luxury segment with 24,237 vehicles sold and Volkswagen had its best August since 1973 with 41,011 units sold. “August marked a turning point in the industry’s recovery,” said AIADA Chairman Ray Mungenast. “Consumer confidence is up and shoppers are eager to take advantage of the tremendous available selection to replace older, less fuel efficient vehicles.” AutoData Corp. estimated the seasonally adjusted annual rate (SAAR) at 14.52 million units, versus 12.46 million units a year ago. Read the rest of AIADA’s August issue of Market Watch to see how all international nameplates fared in the U.S. market by clicking here.

2013 Honda Accord Gets Wholesale Changes
For all the similarity in the sheet metal to its predecessor, the 2013 Honda Accord is as close to a clean-sheet redesign as possible. It is several inches shorter, and a new engine, transmission, suspension, and body structure are among the key changes for Honda's mid-sized sedan. Automotive News reports that it also marks the first use of Honda's plug-in hybrid technology. The redesigned Accord is Honda's crucial test to see if it once again can challenge the Toyota Camry as America's top-selling car, while fending off the Nissan Altima, Ford Fusion, and others that are surging in mid-sized sales. Honda also has reunified the Accord platform for all markets; no longer does the United States get its own version. And while Toyota stopped building the Solara, claiming weakness in the mid-sized coupe market, Honda will continue selling an Accord coupe. Perhaps the most radical change for the Accord is switching from a geared transmission to a continuously variable version for all four-cylinder automatics. Honda says it has developed a solution to the CVT's traditional lack of refinement. Read more on the specifics of Honda’s newly redesigned Accord mid-size car here.

Cheap Loans Fuel Car Purchases
If money is cheaper, consumers will spend. The Detroit Free Press reports that more than one of every 10 new vehicles sold in the U.S. last month was financed with a 0 percent loan, the highest percentage of interest-free auto loans of any month this year. Jessica Caldwell, senior analyst with, which tracks consumer and dealer behavior, said that 8.5 percent of sales were purchased with 0 percent financing over the first eight months of 2012. Automakers' finance affiliates and independent lenders are more willing to offer interest-free loans because they are paying historically low interest rates for their funds. "This is the best of both worlds . . . automakers can offer low interest-rate programs at little cost to themselves and consumers can take advantage of these offers and get a lot of car for their money," said Jesse Toprak, vice president for, an industry research firm. More consumers qualify for the low rates as lending standards continue to loosen, Caldwell said. For more on the availability of low or no-interest car loans, and how it is influencing the auto industry, click here.

Auto Industry Proving to be the Little Engine That Could
The subject will be politics but the economy will be one of the dominant factors playing out as Democrats hold their convention this week. And with a desperate need to put a positive spin on what is, at best, a struggling economy expect to see the spotlight focus on the auto industry. Among the makers leading the August charge, Volkswagen was up a solid 62.5 percent year-over-year, much of that surge driven by demand for its American-made Passat model. reports that nowhere does pent-up demand seem to be more apparent than among the Big Three Japanese makers, and especially Toyota and Honda. Most analysts believe a sizable chunk of both makers’ gains came from buyers who postponed trading in last year as the result of Japanese product shortages caused by that country’s March 2011 earthquake and tsunami. Expect to see the Democrats highlight the Chrysler turnaround this week. Making a case for the White House handling of GM may be a bit tougher considering it needs to nearly double the maker’s stock price to recover that portion of the 2008 – 2009 auto bailout. Click here for more on the how the auto sector is playing a role at this week’s Democratic National Convention in Charlotte, N.C.

Hurricane Isaac Drives Gas Prices Higher
In its latest weekly survey, the Energy Information Administration reported yesterday that regular self-serve gas rose another six cents last week to $3.84 a gallon. The latest increased mark two solid months in which prices have risen every week. Hurricane Isaac didn't help. USA Today reports that prices rose about six cents to $3.645 a gallon on the Gulf Coast, where the storm hit the hardest. The rise also came in time for Labor Day weekend. Now that the summer driving season is over, maybe prices will finally settle down. The most expensive gas remains on the California and the rest of the West Coast. Both are above $4 a gallon. In fact, California, the state that uses more gas than any other, saw gas prices rise to $4.176, up about two cents a gallon. Click here to compare gas prices across the country, courtesy of For more on the Energy Information Administration’s report on nationwide gas prices, click here.

Around the Web  
Mercedes Sculpts the New S-Class [TopGear]
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7th Generation VW Golf Unveiled [Autoblog]
Big List of Fuel Eeconomy [Edmunds Inside Line]