Chrysler, Hyundai Sales Up in November

With economic conditions strengthening thanks to rising home values, employment increases, low interest rates, and consumer confidence, November was a strong month for retail sales, and Chrysler and Hyundai greatly benefited from those factors.

Chrysler sales in the U.S. rose 14% last month, while Hyundai reported an increase of 8% compared with November 2011. The two automakers were the first to report sales Monday.

November sales are expected to be 15 million or more when calculated on an annual basis, which would be the highest since March 2008. That would clock in above the year’s high pace of 14.3 million units.

The economy wasn’t the only factor accelerating auto sales in November, historically a flat month because of the weather and the holidays. When Hurricane Sandy hit in late October, many car shoppers in the Northeast deferred purchases until the following month or had to replace vehicles damaged by the storm. Plus, with the average age of cars on the road around 11 years old, drivers are being pressed to make expensive repairs or buy new vehicles outright.

Should sales actually reach 15 million units this year, it would be a drastic jump from the 10.4 million units sold during the recession in 2009, though sales would fall below the 2005 peak of 17 million units. 

With a 32% leap, the Dodge brand led Chrysler’s sales. The automaker said it sold 123,000 cars, and its crossover SUV, the Dodge Journey, rose 77%. Spearheaded by the Sonata midsize and Elantra compact, South Korea’s Hyundai moved more than 53,000 units in November.

Jesse Toprak, senior analyst for automotive pricing site TrueCar.com, predicts that foreign-based automakers like Hyundai should see the most increases because of sizeable discounts offered last month. The site estimates that Hyundai and Kia increased incentive spending by roughly 30% after being reprimanded by the U.S. government in October for exaggerating gas mileage. Toyota spending increased 9% from a year earlier, while Nissan spending rose 45%.

Many analysts see little effect on sales from the impending “fiscal cliff,” government spending cuts and tax increases set to begin Jan. 1 unless an agreement is made to cut the budget deficit. Economists, however, warn that if an agreement isn’t made, the U.S. economy would slide back into a recession – a factor that could potentially disturb the resurgence of auto sales.