Automakers confident in ’15 sales as SUVs sales jump
New York — Automakers, buoyed by strong sales in the first three months of 2015 and fueled by exploding SUV sales, are expecting sales to hit nearly 17 million or higher in the United States this year — the fifth straight year of higher sales.
Low oil prices are pushing SUV, pickup and light truck sales through the roof — and many automakers report they can’t build enough, as they struggle to sell cars — especially mid-size cars that are facing pressure from crossovers. Automakers sold 16.6 million vehicles in 2014 and the country is in the longest rising auto sales streak in a half-century.
“2015 is the year of the SUV,” said Wolf-Dieter Kurz, vice president for Mercedes-Benz at a lavish event Tuesday night to unveil the company’s new GLE SUV — formerly known as the M-Class — and its plug-in hybrid GLE 550e — its first plug-in hybrid SUV.
Stephen Cannon, president and CEO of Mercedes-Benz USA, also said he thought SUV sales would continue to be strong.
“We predict an SUV feeding frenzy this year,” he said, noting that in the past two years, the company has focused on passenger cars.
Automakers spent millions of dollars at more than a dozen lavish events around New York Tuesday before the New York International Auto Show press preview days officially begin Wednesday. Automakers booked dozens of rooms at some of the fanciest hotels in Manhattan — including the Ritz-Carlton and St. Regis. General Motors Co. even hired a fleet of water taxis to get reporters to an event in Brooklyn Tuesday to unveil the Cadillac CT6.
There are a number of other high-profile car reveals, but booming SUVs are overshadowing in part all of the new cars being unveiled here including the new Chervrolet Malibu, Nissan Maxima, Kia Optima, Scion iA and iM and Lincoln Continental concept.
In February, industry car sales fell 1.4 percent as light truck sales were up 12 percent. Larger SUVs had an especially strong month. Automakers predict SUVs and pickups accounted for about 55 percent of the market in March.
Automakers admit to being caught flat-footed by the oil prices that have fallen to a more than six-year-low — and some have had to cut car production this year as they try to squeeze out more SUVs and trucks.
“No one in our organization predicted we’d be at $40, $50 a barrel oil in 2015,” said Ford Americas chief Joe Hinrichs at a lunch with reporters Tuesday. “That was not at the low end of our range.”
Automakers are unveiling many fuel-efficient cars at the show that have been in the works for years.
Both Hyundai Motor Co. and Mercedes-Benz USA say they had record sales in the first three months of the year — and March was boosted in part by pent-up demand because of winter storms.
“We think we’re going to hit 17 million vehicles for the first time since 2007,” said Cannon, citing the strong economy, jobs numbers, stock market and housing market.
Dave Zuchowski, president and CEO of Hyundai Motor America, said the “numbers still look pretty healthy” even as the industry growth rate declines. Hyundai’s March U.S. sales will be around 72,000 — and will top Hyundai’s previous all-time high of just under 71,000 vehicles, Zuchowski said.
How strong is the market?
“We might have a best-ever month and lose market share, I’m not quite sure,” Zuchowski said, predicting about 1.5 million vehicles were sold in March — on about a 17 million vehicle a year pace.
The U.S. economy is helping fuel sales, he said.
“Inflation is in check, GDP looks pretty good, the jobs situation is great, housing starts are very strong, consumer confidence is very high so all of the big numbers look pretty good,” Zuchowski said.
Mercedes-Benz chief Cannon said he is really bullish on SUVs because the 80 million Generation Y members will be moving to SUVs “in pretty large numbers” as they get better jobs and start families and said the outlook is good for SUV sales over the 15 years.
He cited the “gigantic 75, 80 million millenials (that) are coming and they need to drive some kind of car when they have 2.5 kids,” Cannon said.