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Some carmakers have best sales in years

Auto sales for the month of March are trickling out this month and so far the numbers look pretty good.

Jeremy Hobson: Auto sales for the month of March are trickling out this month and so far the numbers look pretty good. Chrysler said it had its best month in four years with sales up 34 percent. Ford also had its best month in years with sales up five percent.

And that’s where we’ll start now with Juli Neimann, analyst at Smith Moore & Company. She is with us live as always from St. Louis. Good morning, Juli.

Juli Neimann: Good morning, Jeremy.

Hobson: So it seems like high gas prices don’t seem to have deterred people from going out and buying cars.

Neimann: Only to some extent. Of course everyone’s going to be watching it because if more of your money is going into the gas tank, that’s less available to spend other places. But the key with the automotive industry is “do you have a job?” and that’s what we’re watching out for. Jobs are picking up or at least stabilizing in certain areas and as long as we see growth in the job area, you’re going to see a pickup in auto sales.

Hobson: Well I know that we saw that GM said it sold a record amount of these fuel efficient cars, cars that get better than 30 miles a gallon on the highway. Are people going out and buying the really fuel efficient cars like the Nissan Leaf, these electric cars?

Neimann: If you take a take a look at the Volt and some of those, they’re going to be on extended vacation here, simply because they’re too expensive. And it really is still experimental technology that you’re looking at here. Fuel efficiency is the key thing. Foreign competition really gave us the push to fuel efficiency. You know, five, six years ago, you basically had a choice among three fuel efficient vehicles and the rest were all guzzlers. Now you’ve got 40 from which to choose and you don’t have to buy a car you can barely squeeze into. So the options are out there, people are moving in that direction, and the key is fuel efficiency.

Hobson: And Juli, quickly, where are we now compared to pre-crash levels when it comes to car sales?

Neimann: Before the crash, we were selling almost 17 million a year; that was in 2005. Now we’ve plunged all the way down but we’re climbing back, 2011 we were at 12.8, it looks like this year we could come back at 14 million but it’s still a long slow haul back.

Hobson: Juli Neiman, analyst with Smith Moore & Company, thanks as always.

Neimann: You bet.

About the author

Juli Niemann is executive vice-president for research and portfolio management with Smith, Moore and Company.
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Hi Juli,

I have been driving my brand new Nissan Leaf since February and have 2,300 miles on it so far. 95% of my driving is less than 80 miles per day, so the Leaf meets my needs perfectly. For road trips, I have my old Prius, which is still performing well after 150,000 miles. The Leaf has some very sophisticated features, such as an iPhone app that lets me start and heat my car from the house as well as check on the progress of my charging. It also has a heated steering wheel and heated seats, including the back seats! I would not describe this car as being experimental in any way. As for the cost, it was nearly the same price as if I bought an equivalent new car, after the federal and state tax rebates. My electric bill has increased 50 cents per day. And I truly enjoy driving by gas stations as I see the prices continue to increase.

I agree with John - go test drive a Volt and a Leaf!

Sincerely,
Vickie

Hi Julie,

I know the Volt and Leaf are expensive, but with rebates the price was equal to what I was going to pay for a conventional gas engine car of equal luxury. These cars are production quality, not experimental as you report here. I drive on 90% electric over the last 3 months, and haven't been to the gas station since early Feburary, and even then I just put in 4 gallons. Getting 220 mpg, can easily make my 25 mile commute to work on electric (range is 30 miles in winter (Colorado) to about 40 miles now that it's warmer. Some days I drive a lot farther and burn a little gas. It's costing me about $1/day to recharge.

Go test drive one and see what you think. This is perfect technology for city commuters and it's a game changer.

Good Day,
John

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