Car and truck sales rose modestly in July but reached their best levels in nearly a year as many consumers returned to dealer showrooms. A large portion of sales came from customers replacing very old vehicles, auto executives and economists said. They noted that consumer confidence remains fragile because customers are concerned about the slow pace of the recovery, as other economic indicators have shown.
“We know this is the slowest recovery we’ve seen in our adult lives,” Mark Fields, Ford’s president of the Americas, told reporters.
In this difficult atmosphere, GM performed strongly with fewer brands than it had a year ago, leading the sales gains recorded by all three Detroit automakers in July, reported The Detroit News.
Toyota and Honda reported lower sales after having benefitted strongly from the cash-for-clunkers program introduced in July 2009. Nissan and the Hyundai-Kia Automotive Group reported the biggest July sales gains among the major players.
Total car and light truck sales rose 5.2% from last July and were up 6.7% from June, according to Autodata Corp.
On an annualized basis, the selling rate reached 11.99 million vehicles, the highest level since last August, when cash-for-clunkers deals were available during the entire month to boost a market that had collapsed.
“The recent data haven’t changed our view of the ongoing economic recovery,” Emily Kolinski Morris, senior economist at Ford, told the paper. The company expects full-year sales to range between 11.5 million and 12 million vehicles, compared with 10.4 million in 2009.
GM reported a 6.4% rise in monthly sales, the largest among the domestic automakers. Sales rose in all four of its remaining brands — Buick, Cadillac, Chevrolet and GMC, with Cadillac sales more than double year-earlier levels. Kurt McNeil, sales and service vice president for Cadillac, attributed the sales increases to pent-up consumer demand and more banks making loans available to customers.
Cadillac continues to show success with the redesigned SRX. Sales for this crossover rocketed to 5,723 from 648. The Buick LaCrosse remains hot with consumers; Buick sold almost as many LaCrosses in July — 7,047 units — as it sold vehicles last July — 7,099 units. GM also noted an increase in pickup sales and expects to see that trend continue for the rest of the year, helped by the rollout of the new heavy-duty Chevrolet Silverado and GMC Sierra.
“People who’ve put off replacing vehicles are now slowly coming back into the market,” said Don Johnson, GM’s vice president of U.S. sales operations.
GM isn’t luring them back with incentives. Its discounts average $3,270 per vehicle, down $730 from a year ago. “We’re selling more vehicles at higher prices and lower incentives,” Johnson said.
GM remains cautious about the economy. Johnson noted that the rate of job growth was the slowest of any recovery since World War II.
Even so, “we see a low risk of a double-dip” recession, he said.
Ford reported a 3.3% increase in sales for July compared with the same month last year. Stripping out slumping sales of Volvo Cars, sold Monday to China’s Zhejiang Geely Holding Group, Ford’s sales were 4.8% higher. But without Volvo, it falls to third place in the U.S. market with a 15.8% market share, behind Toyota’s 16.1% share in July.
Ford’s sales rise was led by stronger pickup sales, which tend to be an economic indicator in themselves because so many are purchased by small businesses.
Ford’s pickup sales were up 39% from last year. The company sold more than 50,000 pickups in July — the first month the automaker has sold more than 50,000 pickups since March 2008. Ford’s new SuperDuty heavy-duty truck led the resurgence in pickup sales, with sales up 63% compared with last July. Mercury sales, however, fell 31% compared with last July. The automaker is retiring the Mercury brand.
“Our sell-down is proceeding smoothly,” said Ford market analyst George Pipas. “By the end of the year, there’ll be only a few Mercurys in stock.”
Premium Lincoln sales were down 16.3% for the month, and Volvo sales were down 32.9% for the month.
Most other European brands fared well in July, bolstered by a strong recovery in demand for luxury cars. European brands rose 10.2% in July, with Volkswagen, BMW, Audi, Jaguar, Land Rover, Mercedes-Benz and Porsche posting solid gains.
Chrysler Group LLC reported a 5% increase in sales for July compared with the same month last year. Sales for the year at Chrysler are up 10.8%.
Toyota reported a 3.2% drop in July sales, compared with the same month last year. “Last July was a particularly good month for us,” Bob Carter, GM of the Toyota brand division, said on a conference call.
He said the negative effects of Toyota’s big recalls and quality issues seemed to be subsiding in the marketplace.
The proportion of trade-ins of non-Toyota brands has risen back above 50%, where it was a year ago. “While we have a ways to go, we view that as a positive sign,” Carter said.
Honda’s sales fell 2% from last July, when the cash-for-clunkers program buoyed demand for the automaker’s economical, fuel-efficient vehicles.
“Although July sales declined versus last year, our sales increased compared to June 2010, which is a positive sign,” said John Mendel, EVP/Sales at American Honda.
The top performer among the Japanese automakers, Nissan reported a 14.6% increase in July sales, helped by strong demand for the Nissan Rogue, a small crossover.
Hyundai Motor Co.’s sales rose 18.8%, even though it had a tough comparison with last June’s sales levels. Hyundai offered cash-for-clunkers deals even before the rules were spelled out toward the end of July of 2009. U.S. sales of its Kia Motors affiliate were up 20.7% last month.