The lap times are in for March U.S. auto sales, and the stop watches tell the story of a car and truck market that’s firing on all cylinders. In total, U.S. sales of cars and light trucks rose 13% in March, capping off the industry’s best quarter since 2008. The gains in the industry in March came amidst rising gasoline prices, so it’s no surprise that a big portion of the March total came from fuel-efficient cars and trucks.
According to research group Autodata, vehicle deliveries in March accelerated to a 14.4 million seasonally adjusted annual rate from 13.1 million a year earlier. Industry analysts have cited pent-up demand from consumers who delayed purchases during the recession as one big reason for the recent gain in vehicle sales. A slowly but surely improving economy also can account for the boost in car buyers.
Looking at the individual companies, General Motors (GM) saw a 12% spike in year-over-year March sales, while Ford (F) saw a 5% surge in its sales metric. Chrysler, which is owned by Italian automaker Fiat (FIATY), surprised analysts by driving sales up 34% in March.
German auto giant Volkswagen (VLKAY) also had a great month, with its sales increasing 34.6% year over year. The first quarter was great for the Volkswagen, as the company enjoyed its best quarter since 1973. Industry behemoth Toyota (TM), also had impressive showroom sales; its March sales metric jumped 15% year over year. The one big automaker that saw sales fall was Honda (HMC). Its monthly sales decreased 5% from the same period a year ago.
Now, recall that in February, fellow Traders Reserve analyst Michael Shulman and I published a discussion we had on the fate of the auto industry. Both of us opined that the industry was likely going to do well this year, and that stocks in the sector also were liable to see some nice upside. These notions have so far been proven prescient. Sales are climbing and stocks in the sector—particularly GM, Ford, Toyota and even Honda— are driving in the fast lane.
Of course, part of those stock gains can be attributed to the wider bull market, but there’s no denying that the fundamentals in the sector are revving high—and in a bull market, when the fundamentals are sound, the stock price usually follows.