Car Makers Keep Momentum as Demand Stays Strong

By Features FOXBusiness


Automakers continued to see strong U.S. demand for pickup trucks and other vehicles last month, with General Motors (GM) leading the pack in total new-vehicle sales.

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Car website Edmunds expects overall U.S. sales for June to rise 6.3% year-over-year but fall 5.3% compared to May sales.

Meanwhile, Kelley Blue Book said transaction prices remained on an upward trend last month. The estimated average transaction price for light vehicles in the U.S. was $31,663, up nearly 1% from May and up 1.2% over the year-ago period.

“Consumer confidence continues to be a strong factor, along with pent-up demand and for now, low interest rates, bringing shoppers into the showroom to purchase a new vehicle,” said Alec Gutierrez, a senior market analyst at Kelley Blue Book.

For GM, sales topped projections by climbing 6.5% compare to last year, as Cadillac posted another month of rising sales to outpace other brands. Edmunds projected sales to rise just 1.3%.

“We have good momentum heading into the second half of 2013: the economic outlook is solid and our launch vehicles are performing well in the marketplace,” Kurt McNeil, vice president of GM’s U.S. sales operations, said in a statement.

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GM sold a total of 264,843 vehicles in June, the company’s highest monthly sales since September 2008. Sales also rose 4.7% compared to the 252,894 vehicles sold in May.

Cadillac’s luxury vehicles continued to attract more drivers, with sales rising 15% year-over-year. Chevrolet posted 7.4% growth, and GMC sales rose 4.5%. Buick was the lone GM brand to post a decline, falling 4.1%.

The results were also fueled by continued demand for large pickup sales. Sales of the Chevrolet Silverado and GMC Sierra increased 29% and 33%, respectively. Both trucks are in the middle of a refresh this summer. GM said dealers delivered more than 6,000 2014 crew cab models in June.

The company’s deliveries to retail customers offset weaker fleet sales, which dropped 9% due to the timing of deliveries. Retail deliveries were up 14%.

Inventory at GM dealers in the U.S. edged 0.1% lower from the prior month.

June had 26 selling days this year, one less than last year.

In May, GM said its first-quarter profit slipped 11% amid weaker North American demand and continued losses overseas.

GM shares were trading six cents higher at $34.06 in late afternoon trading Tuesday.

U.S. rival Ford (F), which has expanded its vehicle portfolio with refreshed F-series pickup trucks, posted a 13% increase in sales for June on strong consumer demand for small cars. Edmunds was looking for sales to rise 12%.

Shares rose 2.6% to $16.15 on the news.

The automaker sold 235,643 vehicles in the U.S., up from 207,759 a year ago and 4.4% below May’s total of 246,585.

Truck sales were up 20%, while car sales rose 12% and sport utility vehicles saw 7.5% growth.

Small cars had a particularly good month, as sales of the Fiesta, Focus, C-MAX and other small cars soared 39%. That reflects Ford’s best small-car performance for June in 13 years.

Ford’s namesake brand had sales growth of 14%, while Lincoln sales were down 1%.

Amid an effort to cut back on incentives, Ford reported in April a first-quarter profit that rose 15% on record performance in North America. Ford also saw lagging demand in other regions.

Chrysler Group led off Tuesday’s slate of auto sales reports with 8.2% growth in June, as the U.S. automaker continues to ride a wave of demand for pickup trucks and Dodge vehicles.

Edmunds projected stronger performance for Chrysler, anticipating growth of 10% compared to the year-ago month.

Chrysler said Tuesday morning that it sold 156,686 vehicles, up from 144,811 a year ago but 5.9% below May’s total of 166,596.

Car sales were up 11% over last year, while trucks recorded growth of 7.2%.

Sales at the company’s Ram Truck brand rose 23%, leading all other Chrysler brands. Dodge sales climbed 12%, and Jeep trailed the pack with a slight 0.2% gain.

The Jeep Wrangler, Jeep Compass, and Jeep Patriot SUVs each posted record June sales, while the Chrysler 200 mid-size sedan, Dodge Dart compact sedan and Dodge Challenger also recorded their best sales for the month.

Dodge’s Durango full-size SUV saw sales jump 39%, the best performance by any Chrysler vehicle.

“Last month Chrysler Group set seven individual vehicle line sales records and achieved our 39th-consecutive month of year-over-year sales growth,” Reid Bigland, Chrysler’s head of U.S. sales. “The fundamentals for continued industry gains in new vehicle sales remain intact.”

In April, Chrysler reported a first-quarter profit that fell 65% on higher costs related to the pending launch of the 2014 Jeep Cherokee and other new models.

Toyota’s (TM) preliminary sales report shows a 9.8% increase last month, beating an estimate from Edmunds for 7% growth.

Sales totaled 195,235 vehicles, down 6.1% from May.

“The auto industry led the economic recovery through the first half of 2013, kicking off a strong summer selling season, which we expect will carry into the second half of the year,” Bill Fay, Toyota Division group vice president and general manager, said in a statement.

Toyota tripled its net profit in the last fiscal year, thanks to better U.S. sales. It expects to record 42% growth this year, continuing its rebound from a massive recall and natural disasters in 2011 that crippled production.

Fellow Japanese automaker Honda (HMC) also posted strong sales, reported 9.7% growth to narrowly beat estimates.

Toyota shares were up less than 1% at $124.10, while Honda rose 29 cents to $37.83.