The automotive sector is as confusing as ever. Gasoline prices are spiking through the roof and February's auto sales signaled that the auto sector couldn't be stronger. Outside of heavy-duty truck sales, which generally do suffer with higher fuel prices, total car sales spiked 23.9% and truck sales rose 7.6%.
Individually in February, Ford's (NYS: F) total vehicle sales spiked 14.3%, Chrysler's rose by 40.4%, Toyota Motors' (NYS: TM) jumped 12.4%, and General Motors (NYS: GM) eked out a 1.1% rise in total vehicle sales. Mitsubishi was the only major brand to lose traction in February.
Everyone has their theory as to why car sales are coming back. To some, the car sector is rebounding right alongside the economy. For others, the move to smaller, more fuel-efficient vehicles seems to be swaying a cost-conscious public. As for me, I think those theories have some merit, but I don't think it's the real reason why car sales are improving so dramatically.
The automotive sector is attempting something that, as far as I can tell, wouldn't work in any other sector -- it's reliving its past. There are not very many people out there that are yearning for a redone 8-track or waiting for bell-bottom jeans to resurface. On the other hand, if you tell the American public that you're going to bring back a car that hasn't been seen in a decade or four, suddenly the public's interest is piqued.
Ford rejuvenated the muscle car market with the redesign of the Mustang, allowing Chrysler's Dodge to follow up with the Challenger and GM's Chevy with the Camaro. Then we had news from Nissan (OTC: NSANY) over the weekend that it's considering bringing back its iconic Datsun brand. This comes just months after Motor Trend noted that Toyota was in the process of reviving the Supra which was discontinued in 1998.
I don't want to scare anyone, but it's almost as if the car companies are listening to what the American car buyer wants! It's an amazing concept that worked well in the 1960s and 1990s, but failed miserably last decade when car companies attempted to outdo each other with larger and larger SUVs.
Unlike most of our purchases, a car can evoke emotions that you simply won't get when you purchase a camera or a new pair of shoes. Car companies have been playing consumers' heartstrings like a fiddle with muscle car redesigns and retired brand reintroductions. Until the auto industry runs out of cars to reproduce, I'd consider this a trend that's likely to continue in the near future.
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At the time thisarticle was published Fool contributor Sean Williams has no material interest in any of the companies mentioned in this article. He is madly in love with the 2013 Shelby GT 500. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor and General Motors, as well as creating a synthetic long position in Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that's more finesse than muscle.
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