Strong Auto Sales Numbers Expected

By: Associated Press
By: Associated Press

U.S. auto sales are expected to stay strong in March as customers go on a small-car buying binge, driven by fears of rising pump prices and shortages of vehicles from Japan.
March sales are projected to rise 16.5 percent from the same month last year and 25 percent from February, keeping the auto industry's steady recovery on track, according to Automakers report March sales on Friday.
Small cars such as the Honda Civic and Ford Fiesta likely saw strong sales. J.D. Power and Associates predicts that 24 percent of vehicles sold to individual buyers in March will be small cars. That's up from 18 percent in December and 20 percent in February. The last time the percentage was that high was August 2009, when the Cash for Clunkers program encouraged people to buy more fuel-efficient vehicles.
Jeff Schuster, head of global forecasting for J.D. Power, said he suspects some buyers who were considering a Japan-made vehicle went ahead with their purchase after that country's devastating March 11 earthquake. They figured supplies of cars such as the Toyota Prius and Honda Fit could run low in the coming weeks.
Warren Hu, a Web developer from San Mateo, Calif., had been thinking about getting a Prius since the beginning of this year as the price of filling up his 2001 BMW X5 crept close to $100. He figured that gasoline prices would increase demand for the Prius, and incentive deals like the one he got -- 2.9-percent financing for five years -- would start to disappear.
Hu, 36, had been doing a lot of comparison shopping. But when the quake hit, he pounced, buying a black, base model 2011 Prius for $23,819, which is close to the list price.
Toyota won't say whether it has seen a spike in U.S. sales of cars it makes in Japan. It says its inventories are "generally adequate." The company restarted production of the Prius in Japan on March 28, although power outages and parts shortages could hamper Toyota and other automakers for weeks.
Earl Stewart, who owns a Toyota dealership in North Palm Beach, Fla., said he has run out of Priuses and is also getting stronger prices.
"A little shortage of supply is a good thing for a dealer," he said.
Tammy Darvish, a Washington D.C.-area dealer who sells Toyota and 12 other brands, thinks gas prices -- not earthquake-related shortages -- are the biggest factor for her customers. The national average for a gallon of gas hit $3.58 this week, the highest price ever for this time of year. Gas prices have jumped 25.1 cents per gallon in the past month.
"Gas prices are continuing to rise, and it's lingering longer, so people no longer think it just might be a fluke," she said.
Darvish said many buyers are coming in to look at hybrids such as the Prius. But they are pleasantly surprised when they see the fuel economy numbers on more conventional cars, such as the 42-mpg Chevrolet Cruze Eco or 40-mpg Hyundai Elantra.

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  • by Anonymous on Mar 31, 2011 at 05:35 AM
    With the high gas prices being allowed by the gov with wall streets help,lets FORCE people to buy small cars.Well give us decent paying jobs to do so.So many that were middle class have fallen to low class,poor is next ,then poverty,then Below poverty.Hey how many cars can the rich buy?Being retired I have NO plans of buying NEW.As long as mine lasts I keep it.Not the best on gas,but fair.Social security people can't even afford food in many cases.Not all have high retirement.A new car is not on most people list.Highh gas prices or not.So it looks like gas prices will remain high till many buy new cars.Who wins???
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