DETROIT – General Motors, Ford, Chrysler, Toyota and Nissan all reported double-digit sales gains last month, clear signs that U.S. auto sales will remain strong into the second half of the year.
Toyota led the way with nearly a 16.5 per cent increase, followed closely by General Motors at 16 per cent. Chrysler, Nissan and Ford all reported 11 per cent gains. It was Chrysler’s best July since 2006.
Pickup trucks led the way, a boon for the Detroit carmakers. But consumers also favoured SUVs and smaller cars.
All major automakers report U.S. sales Thursday. Most industry analysts expect July sales to rise around 15 per cent from a year ago. A performance that strong will signal that the industry’s momentum can carry through December.
“We’re almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond,” said Alec Gutierrez, senior market analyst for Kelley Blue Book.
The industry’s numbers for July come a day after the U.S. government reported stronger than expected growth for the April-June quarter.
“Solid industry sales in July point to a stable market indicating a recovering economy,” Bill Fay, Toyota’s group vice-president, said in a statement.
GM said its July U.S. sales rose to just over 234,000 vehicles last month, largely due to gains in full-size pickup trucks. Sales of the Chevrolet Silverado and GMC Sierra pickups combined rose 46 per cent to almost 99,000. The trucks accounted for 42 per cent of GM’s sales. But passenger car sales also were up, 24 per cent over a year ago.
Ford sold nearly 194,000 vehicles, led by the F-Series pickup, with sales up 23 per cent. One in three vehicles sold by Ford last month was a pickup. But the company was helped by the other end of its model lineup, too. Sales of the Fiesta subcompact rose 89 per cent.
At Chrysler, sales of the Ram full-size pickup rose 31 per cent over a year ago, buoyed by an improving housing market that’s helping to drive purchases by small business. Jeep Grand Cherokee sales rose 30 per cent, the SUV’s best July since 2005.
Chrysler saw strong retail sales to individual buyers during the month, particularly in pickups and SUVs, said Reid Bigland, the company’s U.S. sales chief. It was Chrysler’s 40th straight month of year-over-year sales growth.
Chrysler is predicting that industry sales in July will run at an annual rate of 15.8 million vehicles.
At Nissan, sales rose to just over 109,000, a July record for the company. Sales of the Altima midsize car rose 11 per cent, and sales of the redesigned Pathfinder SUV more than tripled.
Toyota will release numbers for individual models or brands later in the day.
Of automakers reporting early Thursday, only Volkswagen had a down month. Its sales were off 3.3 per cent as the top-selling Jetta compact faltered. Jetta sales dropped 1.8 per cent.
The consulting firm LMC Automotive said the second-half tail wind could push this year’s sales to around 16 million. Sales last topped 16 million in 2007, just ahead of the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.
A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.
Incentives such as rebates and low-interest loans are helping sales. Incentives in July rose nearly 8 per cent over a year ago to $2,684 per vehicle. That’s the highest level of the year, said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.
Overall, though, the discounts haven’t cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That’s because buyers are loading up on options, which boosts the price, he said. To get lower monthly payments while paying a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.
Thirty per cent of car loans now are six years or longer, up from 29 per cent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24 per cent of auto sales, up from 21 per cent a year ago, LMC said.