As Black Friday marks the commercial commencement of the winter holiday season, automotive sales are seeing some of the best numbers in recent history, particularly among American brands. This marks a significant turnaround for the US economy as a whole, considering the dire circumstances that overshadowed the auto industry a mere four years ago. Aftermarket purchases such as auto insurance are sure to bolster this improvement as well.
Craig Trudell, a contributor at Bloomberg, recently reported on the ongoing sales momentum of Black Friday, highlighting American manufacturers Chrysler and General Motors, who posted 16 percent and 14 percent increases, respectively. Leading Japanese automakers also put up sales spikes of more than 10 percent each, while total auto sales led to an increase of up to $16.4 million and represented the best monthly annualized industry sales rate since February 2007.
Why such an improvement?
"Dealers were seeing the opportunity to piggyback on this shopping phenomenon," Dave Winslow, chief digital strategist at digital advertising services provider Dealer.com, told the news source. "When you compound that with the high inventory levels, it's a good opportunity for them to really reduce those in the final few weeks of the year."
The Bloomberg report noted that other contributing factors to the sales leap included the largest buildup in dealer supply in eight years, aggressive holiday marketing strategies from auto dealers nationwide, plus more Black Friday promotions and affordable financing. The results exceeded the expectations of leading industry analysts by approximately $800,000 on average.
"The auto industry is really very much influenced by being able to offer zero-percent financing, and car dealers also are beneficiaries of low rates," said Maryann Keller, principal at auto-industry consulting firm Maryann Keller & Associates in Stamford,Conn. "They're carrying excess inventory because floorplan for them - the inventory carrying costs - are so low."
Holiday cheer has its limits
While the national average sales rate saw an overall increase from years prior, not all auto manufacturers walked away from November with a great deal of success. A recent Associated Press report revealed that Honda saw sales drop slightly and Volkswagen's rate decreased by 16 percent.
Still, American brands remained strong as Ford's sales rose by 7 percent, due largely in part to the popularity of its crossover SUV, the Escape. Ford is certainly not getting overconfident by its sales boost, however. Bloomberg saw that the company is taking some time off from production this winter to ensure that excessive inventory doesn't plague them in the months ahead.