Honda reports a healthy 26.1 percent rise in their sales in the United States. However, there’s a little more to this figure than meets the eye. Do you think that Honda branded vehicles carried all the weight in September…?
The Freep reports that Acura recorded a very strong 48 percent increase in sales. Breaking those figures down a little, Honda’s SUVs – yes, SUVs -were the real engine of growth. The Pilot’s sales increased 48.2 percent, whereas the Civic and Accord sales only increased 15.8 percent and 15.9 percent, respectively. Meanwhile, over at Acura, both CUV marques, the MDX and the RDX, chalked up sales increases of 84 percent each.
This information is consistent across the market with sales increasing in the bigger bore segments (i.e. Pickups and SUV’s). Honda will, no doubt be happy with this kind of growth. There is no replacement for displacement when it comes to profits. But is this growth sustainable? At time of writing, the price for a barrel of crude oil on the Nynex is $81.59 and still rising.
It looks like Ford may soon sell more vehicles than GM: http://www.bizzyblog.com/2010/10/01/psst-ford-cuts-gms-lead-in-half-in-sept-gm-completes-acquisition-of-sub-prime-car-lender/
I love GM’s new strategy: “GM has a new in-house car financing company and plans to offer new lease programs and target buyers with poor credit, a big part of the car buying market.”
Pure genius.
The auto version of the housing market bubble!
LOL I’m mortgaged to the HILT. But I just bought a 2010 Mazda 6 because of the 0% for 72mos and cash discounts. I used the money from selling my used car to pay off my credit cards. I was shocked when my loan was approved. I pick it up wednesday, I can’t wait. It’s a seriously sweet car considering my monthly payment is mid-range Civic money.
This worked so well for Mitsubishi a few years ago.
“The auto version of the housing market bubble!”
That’s not an accurate comparison.
Sub-prime only applies to lending based on the prevailing system of basing lending decisions primarily on information held by the national credit bureaus. When buying a home, this system is the only option. When buying a car, this is one way of assessing the risk of lending, but it is not the only way. Additionally, financial risks are considerably lower (cars cost less than homes by a factor of 10 give or take), the customer base is much larger (even renters and people who live in their parents’ basement can own a car) and car prices don’t have massive differences region-to-region driven and generally aren’t driven up because there are lots of high paying jobs in area (unlike homes in Silicon Valley for example).
When things do go wrong a car can be picked up by a repoman in the blink of an eye and the car can be resold, unlike a home, which is relatively hard and expensive to repossess, (most states require a court date, there’s lots of complex documentation to sort through, it takes months, lawyers are involved) . Lenders need to follow the law, obviously, but the laws on repossessing personal property (cars, lawnmowers, TV’s, furniture) are much, much less complex than the laws governing the repossession of real property (land and the structures on it).
Sub prime lending is a good way to move cars, and obviously its not foolproof, just like anything in business. However, comparing it to the housing bubble just isn’t appropriate.
+1
The tone of this article is rather irrational. Honda is experiencing large sales growth in segments that are performing well and pretty strong growth overall. That the Civic and Accord are up 15% would be good news on its own. They’re doing brisk business in the energy policy-vulnerable large vehicle segments, but their economical sedans are doing well too. When fuel prices are manipulated back up, history has shown that Honda Civic and 4 cylinder Accord sales will be a major beneficiary. They seem to be pretty well placed for likely market conditions.
It’s an article of faith among the commentariat of TTAC that Honda lost their way, their cars are ugly, etc. etc. I mean you just look at Insight, right? And now… this. How can it be? Buyiers want big yet economical SUVs? What is going on?
From what I see locally, Honda has put some serious cash on the hood.
People are actually buying Pilots? Has the world gone mad?
I wouldn’t be happy about a mere 15% rise in small car sales… I’d rather see a big rise at the lower end of the market, as this represents new buyers buying into the brand for the first time.
So… the SUV market is officially back, with a vengeance… do people ever learn?
People will “learn”–again–when gasoline is back up above $4/gallon. Until then, gimme my SUV!