The trend of rising U.S. light-vehicle sales continued for the fifth consecutive year in 2014 as sales increased 6% year over year to 16.53 million units in 2014. The strong results were driven by record high sales by 13 brands. Profitable vehicle segments -- pickup trucks, utility vehicles and luxury cars -- recorded improved sales, thus benefiting automakers.
The strong sales in the previous few months continued in December as well, making the fourth quarter highly profitable for vehicle manufacturers. Attractive year-end deals, an improving macroeconomic scenario and falling fuel prices boosted U.S. light-vehicle sales 11% year over year to 1.5 million units in Dec 2014. Sales on a seasonally adjusted annualized rate (“SAAR”) basis amounted to 16.9 million units in December as against 17.2 million in Nov 2014.
Most major automakers impressed with their sales results. Among the six major American and Japanese automakers, FCA US (formerly Chrysler Group) recorded the maximum year-over-year improvement in December as well as 2014. Meanwhile, General Motors Company (NYSE:GM) led in absolute figures both for the month and the year.
Now, let us look at the U.S. sales figures reported by the individual automakers.
U.S. Automakers
General Motors (NYSE:GM) recorded 274,483 vehicle sales in December, improving 19% year over year. This is the company’s best December sales in seven years. Retail sales improved 23% and fleet sales improved 6%. For 2014, General Motors recorded 2,935,008 vehicle sales, improving 5.3% year over year. Retail sales improved 4.8% during the year.
Ford Motor Company (NYSE:F) reported a 1% rise in U.S. sales from the year-ago period to 220,671 vehicles in Dec 2014. Sales volume of the Lincoln brand vehicles surged 21% year over year to 9,690 units in the month, thanks to the popularity of the new MKC and Navigator. For 2014, Ford reported U.S. sales of 2,480,942 vehicles, in line with 2013. Sales volume of the Lincoln brand vehicles surged 16% year over year to 94,474 units, the highest since 2008.
FCA US LLC – controlled by Fiat Chrysler Automobiles (NYSE:FCAU) – recorded a 20% year-over-year rise in sales to 193,261 vehicles in Dec 2014. With this, Chrysler’s monthly sales have increased year over year for 57 consecutive months. This impressive feat also marks the best December sales for the group since 2004. For 2014, FCA US recorded a 16% year-over-year rise in sales to nearly 2.1 million vehicles. This is the best annual sales for the group since 2006.
Japanese Automakers
Toyota Motor Corp. (NYSE:TM) sales increased 12.7% year over year to 215,057 units in Dec 2014. Sales in the Toyota division improved 12.2% to 175,178 units. Lexus’ sales rose 14.7% to 39,879 units, a record high for any month. For 2014, Toyota’s sales increased 6.2% year over year to 2,373,771 units. Sales in the Toyota division improved 5.1% to 2,062,382 units. Lexus’ sales rose 13.7% to 311,389 units in 2014.
Honda Motor Company Ltd (NYSE:HMC), recorded a 1.5% year-over-year increase in sales to 137,281 vehicles in the month. Sales in the Honda Division amounted to 119,472 units in December, almost in line with the year-ago month. Further, sales of the Acura Division jumped 13.1% to 17,809 vehicles. For 2014, Honda recorded a 1% year-over-year increase in sales to 1,540,872 vehicles. This is the company’s second-highest annual result. Sales in the Honda Division increased 1% to 1,373,029 units in 2014. Further, sales of the Acura Division improved 1.5% to 167,843 vehicles, the highest since 2007.
Nissan Motor Co., Ltd. (TOKYO:7201) posted a 6.9% year-over-year increase in sales to 117,318 vehicles in December. Sales in the Nissan division also improved 9.1% to 105,311 units. However, sales of the Infiniti Division went down 9.3% to 12,007 units. For 2014, Nissan posted an 11.1% year-over-year increase in sales to 1,386,895 vehicles, which is an all-time high. Sales in the Nissan division also improved 12.2% to 1,269,565 units. Further, sales of the Infiniti Division went up 0.8% to 117,330 units.
Outlook
The impressive sales in 2014 is expected to continue in 2015 as automakers gain from falling fuel prices, low interest rates, rising wages and household wealth, and improving job security. Further, the ongoing recovery in the U.S. economy is leading to an improvement in consumer confidence.
Automakers are also aiming to increase market share by offering large incentives and discounts to customers. Additionally, banks are offering more car loans with lower interest rates and longer repayment periods. Further, the high average age of cars on the U.S. roads is resulting in high replacement demand for cars as well as car parts. All these factors are working in favor of auto sales in the U.S.
However, some analysts believe that the strong sales growth rate cannot be sustained in 2015. Nevertheless, the outlook for long-term sales continues to remain positive due to improving macroeconomic factors, residual pent-up demand, attractive deals and vehicle launches.
Toyota expects industry sales volume of 16.7 million units in 2015. General Motors also expects better sales this year. As the automobile industry is a major contributor to U.S. economic growth, improving auto sales will also help in the recovery of the overall U.S. economy.