The Luxury Segments Race Ahead and Chevrolet Gears Up for a Big Comeback

The unemployment rate fell from 7.6% in March to 7.5% in April while the economy added 165,000 new jobs in April, making it clear that the U.S. economic recovery is still in full swing. In addition to these optimistic numbers, the current U.S. gas average is $3.50 a gallon—30 cents less than this time last year.

However, while the economy seems to be looking up and the automotive industry is keeping pace, it is still unclear whether the $85 billion U.S. budget sequestration that went into effect in March will have an impact on consumer confidence. Based on first quarter light vehicle sales, confidence hasn't been shaken yet. The seasonal annual adjusted rate (SAAR) was up 8% from the same period last year.

Luxury Leaps Ahead

In line with Jumpstart's predictions, the Luxury segment grew to 14.6% share of light vehicle sales—more than doubling overall industry gains from 2012. The Luxury SUV and CUV segments had the biggest increases.

Big Three Stay Strong

Ford, General Motors, and Chrysler all had strong sales in March, with Ford and Chrysler reporting the highest numbers since the beginning of the recession. Ford, which has five of the of the Top 10 models across Jumpstart's portfolio of sites, has not only successfully innovated while maintaining its loyal fan base, but continues to engage consumers in unique and provocative ways. Most recently, the company announced a $50,000 prize for software developers who can produce a smartphone app that will take data from a vehicle's on-board computer and educate drivers on how to drive more efficiently.

"So far this year, there have been quite a few success stories among domestic auto brands," said Libby Murad-Patel, Jumpstart's Senior Director of Strategic Insights. "The industry is changing, driven by a younger, less brand-loyal segment of car buyers who spend more time online shopping comparable makes and models. Automakers, particularly the domestic brands, have turned up the volume on quality, affordability, reliability, and technology, which is leveling out the playing field in segments typically dominated by imports."

Chevrolet Gears Up for Success

But Ford may want to keep an eye on General Motors as the company puts full power behind its Chevrolet rebranding efforts, repositioning the Impala to attract a more youthful audience and planning a return to the midsize truck market. The logic behind this decision is simple according to president of GM North America, Mark Reuss. Reuss told the Detroit Free Press in April, "There is a buyer out there that doesn't need everything that a full size truck does." A Jeep Wrangler pickup truck is also rumored to be in the works in 2013.

Meanwhile, a weak European economy continues to take its toll on auto manufacturers. The European auto market shrank a total of 9.8% in the first quarter with sales dropping 10% in March—the 18th consecutive month of declined sales. BMW's profits slipped 3%, which the company attributes to its increased investments in new technology and new production facilities. Volkswagen and Daimler sales declined as well with Volkswagen sales revenue shrinking 1.6% and Daimler first quarter net profits falling 3%. The slump is particularly disconcerting for Daimler, which has been working on moving its luxury brand, Mercedes-Benz, ahead of premium competitors BMW and Audi by the year 2020.

Here's a closer look at the vehicle segments, makes, and models that captured the largest share of online auto shoppers in the first quarter.

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