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Booming crossover SUV sales trigger car discounts

A customer looks at brand new Jeeps that are displayed on the sales lot at Chrysler Jeep Dodge Ram Marin in Corte Madera, California. Sales of trucks and crossover SUVs are booming. (Justin Sullivan/Getty Images)

The seismic shift in American car buying toward trucks and crossover SUVs is creating great deals on compact and mid-size cars.

The trend, which has been going on for more than a year, is hurting car sales so much that automakers are offering bigger discounts to keep moving metal.

The change became even more pronounced in August, with companies such as General Motors and Chrysler reporting that truck sales, including crossover SUVs, were up while car sales fell.

The increasing SUV and truck popularity, and discount-fueled sales of some mid-size cars, helped the U.S. auto industry to its best August in 11 years, with sales rising 5.4 percent from a year ago to 1.58 million, according to Ward’s Automotive. While prices remain high for trucks and SUVs, they are either falling or rising only slightly on cars, and that means good deals for shoppers.

“It’s definitely a good time to buy a mid-size car,” said Jessica Caldwell, senior analyst at the automotive Web site. Every mid-size sedan is comfortable, looks good and performs well, so price is nearly the only differentiator, she said.

Automakers spent an average of $1,841 per compact car on discounts last month, up 7 percent from a year ago, while prices fell 1.2 percent, according to estimates from Edmunds. On mid-size cars, companies spent an average of $2,344 on discounts, up 4 percent. The average sales price rose slightly as buyers added features.

Yet for some makes, deals brought out car buyers. Honda reported record sales of its Accord mid-size car in August, up 33 percent to more than 51,000. Nissan reported an August record for its Altima mid-size car, with sales up 4 percent. And Ford’s Fusion also did well, with sales up nearly 20 percent. Accord sales were so high that it again unseated Toyota’s mid-size Camry as the top-selling car in the United States for the month. Camry sales fell 1.5 percent to just over 44,000.

Caldwell theorized that Accord, Fusion and Altima sales were aided by discounts that brought owners with older versions of the cars off the sidelines. “All of those vehicles have pretty large customer bases,” she said. “They see some of the deals that are out there.”

Edmunds estimates that Honda spent $2,013 per Accord on discounts in August, more than three times what it spent a year ago. Altima discounts were $2,293, up 5 percent, while Ford discounted the Fusion by $2,774, up 42 percent.

Small crossovers such as Honda’s CR-V accounted for 17.3 percent of the market last month, two points higher than a year ago. But small cars were just under 22 percent of the market in August, down from just over 22 percent last year. Mid-size car market share fell 0.2 percentage points, to 16 percent, said Erich Merkle, Ford’s top sales analyst.

Of all major automakers, only General Motors and Volkswagen reported sales declines last month. GM was down 1.2 percent, and struggling VW was down nearly 13 percent. Truck sales at GM were up 18 percent.

Chrysler and Nissan led the sales gains with Chrysler rising 20 percent and Nissan up nearly 12 percent. Toyota sales rose 6 percent, while Ford and Honda each eked out a 0.4 percent gain.

Sales last month ran at an annual rate of 17.5 million, the highest annual rate since January 2006.

— Associated Press



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