July Car Sales Report – Car Pro News

Last week’s newsletter deadline was prior to automakers releasing their July sales numbers. Late Wednesday August 1st, we learned that U.S. demand for light vehicles continued to defy mostly weak economic indicators by rising 9 percent in July.
Big sales gains at Japan’s and Europe’s top automakers — Toyota, Honda, Nissan and Volkswagen — offset declines at Ford Motor Co. and General Motors.
The seasonally adjusted annualized sales rate hit 14.1 million, in line with forecasts.
July’s 9 percent gain trailed analysts’ projections as well as the double-digit increases of the two previous months. The industry’s sales gain for the year is now 14 percent, down from 15 percent through June.
Among major automakers, Toyota, Chrysler, Honda, and VW have gained market share this year through July, while GM, Ford and Hyundai-Kia have lost ground. Nissan’s share has remained flat.
Analysts and automakers continue to cite pent-up demand, new models, low interest rates and easing credit terms for the industry’s sales gains.
Many consumers are choosing to replace older, less fuel-efficient models, still placing the industry on track to surpass sales of 14 million units in 2012.
GM and Ford tied their declines in July U.S. sales on falling fleet deliveries.
GM’s sales dropped 6 percent last month, with deliveries to retail customers off 3 percent. The company said total fleet deliveries declined 15 percent, including a 41 percent drop in sales to rental customers.
Ford reported a 4 percent drop in sales last month, with retail volume up 2 percent and fleet down 16 percent.
Honda Motor Co., Toyota Motor Sales, Chrysler Group, Subaru, Nissan North America, and the Volkswagen Group all had double-digit increases.
Toyota recorded a 26 percent increase as it continued to recover from earthquake-related inventory shortages a year ago. The Toyota division, aided by the redesigned Camry, posted a 24 percent increase in July sales, while Lexus shipments jumped 25 percent.
American Honda said its July sales surged 45 percent to 116,944 units, with the Honda brand up 46 percent and volume at Acura advancing 36 percent.
Demand for each of the Honda brand’s four core models — Accord, Odyssey, CR-V and Civic — soared 47 percent or more compared with July 2011, when earthquake-related shortages dented sales.
At GM, sales were down 15 percent at Buick, 9 percent at GMC and 7 percent at Chevrolet. Deliveries rose 21 percent at Cadillac.
GM indicated earlier that sales to rental customers would be down sharply in July because scheduled shipments occurred earlier in the year compared with 2011.
Chrysler said its sales rose 13 percent — its 28th consecutive monthly gain, with car sales advancing 19 percent and light truck deliveries up 11 percent.
Chrysler brand sales jumped 35 percent, while deliveries increased 15 percent at the Ram brand, 7 percent at Jeep, 6 percent at Dodge and 22 percent at Fiat.
Chrysler said sales of the new Dodge Dart compact hit 772 units in July, the model’s first full-month on the U.S. market.
Nissan North America posted a 16 percent July gain, aided by a 57 percent increase at the Infiniti luxury unit. Nissan Division sales rose 12 percent.
Volkswagen Group said July sales rose 27 percent at the VW brand and 28 percent at Audi. Subaru was up 16 percent.
The Hyundai-Kia Group, hurt by shortages of key models, said sales rose 5 percent last month, with Kia up 6 percent and Hyundai volume advancing 4 percent. It was the second-smallest monthly sales gain for the automaker since August 2010.
The BMW Group posted a 4 percent gain in July sales, with a 24 percent gain at Mini offsetting a 1 percent dip at the BMW brand. It was the first drop in monthly sales for the BMW brand since May 2010.
Some automakers face tough decisions this summer amid signs that the recent gains in transaction prices are slowing, and incentives and inventories are increasing.
With some companies hiking output, the industry may face more pressure to raise incentives if demand moderates, as well.
The U.S. auto industry started July with a 58-day supply of cars and light trucks, up from a 52-day supply at the beginning of June.
Average incentives fell 2.7 percent in July to $2,480 from June, TrueCar.com estimates.
Autodata Corp. estimates average industry incentives have climbed 3 percent this year through June to $2,507, compared with $2,437 during the same 2011 period.
Average transaction prices in July rose 1.6 percent to $30,369 compared to a year ago, TrueCar estimated.
TrueCar analyst Jesse Toprak expects average transaction prices to remain above $30,000 for the rest of the year, but some automakers, notably the Detroit 3, may see transaction prices soften, he said.
The outlook for transaction prices will depend on how much automakers have to discount to clear out 2012 models.
“With economic growth slowing, sales growth will likely level off,” said Alec Gutierrez, senior market analyst of Automotive Insights at Kelley Blue Book. “Manufacturers will need to get creative to keep sales momentum moving forward.”


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