Car Sales To Hit Four Year High In March

For some reason, car sales continue to surge. Consumer spending has improved, but only modestly. The same could be said of unemployment. Cars and light trucks remain the second most expensive asset people hold after their houses.

There are several theories about improved auto sales. One is that Americans have held their cars for unprecedented periods and they are simply getting old. The cost of repairs for these vehicles is higher than the monthly payment for a new car.

Another reason is that car companies are offering very aggressive incentives. These include zero percent financing for as much as a year.

Truecar reports that the annual run rate of car sales will reach 14.5 million based on March figures. That does not approach the 16 million in 2005, but the cost to operate car manufacturers, especially those which are US based, has dropped sharply raising the leverage for profit margins.

Truecar reports

“We are looking at a record breaking month for many manufacturers in March with Hyundai, Nissan and Volkswagen expected to havetheir highest unit sales ever in the U.S., ” said Jesse Toprak, Vice President of Market Intelligence for TrueCar.com. “We also forecast that Chrysler, Ford, GM, Honda and Toyota will have an extremely strong month, with some of the highest unit sales in years. Due to stronger than expected recovery, we’ve increased our sales forecast another 3.6 percent, from 14.0 million unit sales to 14.5 million unit sales in 2012.“

The numbers by major manufacturer

Unit Sales