US sales increase also brings better profits image

This year has marked the full swing of the US automotive recovery, with the seasonally adjusted rate hitting pre-recession levels in many of the previous months.

Last month US light-vehicle sales grew by 6% and the SAAR reached a great 16.5 million units. That’s great news for the entire auto industry, but more importantly the deliveries also underlay a newfound financial strength for the carmakers. Back in the days before the financial crisis the sales were actually more artificial then ever – there was a high mix of fleet sales (lower margins) and the yield from the retail deliveries was lowered by the big incentives, while production was highly costly and inefficient.

Today, the revenue brought in by the sales each month is comfortably ahead of the overall volume increase as consumer confidence has again shifted sales towards the larger, pricier SUVs and crossovers. Lower sales of the less-expensive sedans and the added earnings are great news for the overall American industry. According to J.D. Power and Associates, which doesn’t adjust number for inflation, US consumers are on pace to use $400 billion to buy new models in 2014 – an 80% rise from just five years ago, during the financial crisis.

Via Automotive News