US: January, a success story for the auto industry image

While much of America was under snow during 2014’s January, last month’s superb delivery increases were not just way better than last year, but also way higher than before the recession.

And the actual record was not even the fact that January’s pace was 14 percent higher, tallying sales of 1,152,480 units. The real record was the level of revenue coming from those sales. The US auto industry now has cash to spare – luxury, SUV and truck segments were on the rise; average transaction prices have been surging steadily and now the gas prices collapsed. All three factors are interwoven to form the best picture in years for the automakers operating in the US. In fact, analysts expect that even as unit sales will modestly rise this year to around 17 million units (from 16.5 million last year), the revenue will climb faster – by 4.8 percent to $553 billion from $527 billion in 2014.

Increased availability of cash is a boon not only for profits and investors, but also for the investment capital and product development units – which can concentrate on building even more attractive products for the customers. For example, last month’s higher transaction prices were associated with a 16.7 million annualized selling rate – up from 15.3 million in 2014. General Motors was the leader among major carmakers and saw January deliveries jump 18 percent – with the company’s average transaction price per vehicle also soaring $2,400 from a year earlier, to $34,800. According to auto site TrueCar, the average transaction price across the US auto market last month was $32,812, up 3.5 percent from the same period in 2014. Combined with the 14 percent sales growth – the auto industry gained 17% in terms of revenue, nailing in $37.6 billion in what should be a traditionally slow month.

Via Automotive News