June U.S. car sales were strong across the board, topping the 14 million unit seasonally adjusted annual rate (SAAR) after a lackluster May, indicating a continued recovery for the industry that will likely carry through the second half of 2012.
The Detroit three, Chrysler Group LLC, a subsidiary of Italian Fiat SpA (Milan: F), Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) all posted substantial U.S. sales gains in June, driven by incentives on trucks and SUVs, lower gas prices and contractor buying. The major Japanese automakers, Toyota Motor Corp. (NYSE: TM), Honda Motor Co. (NYSE: HMC) and Nissan Motor Co. (Tokyo: 7201), continued their recovery from last year's Japanese earthquake and tsunami and floods in Thailand, as inventory levels return to normal.
Shares in the major carmakers shot up on the sales results. Fiat SpA (Milan: F) shares rose 5.09 percent to €4.13 ($5.19), while GM shares rose more than 6 percent but fell back to $20.67, up $1.10 or 5.6 percent, in the afternoon. Ford shares rose 2.24 percent to $9.60, while Toyota's shares climbed slightly by 0.77 percent to $80.80.
A strong June was definitely something the industry was looking for and needed, said Jeff Schuster, senior vice president at LMC Automotive. His company predicts a SAAR of 14.5 million for the year. June was seen as a pivotal month for the year ... if it had been a flat or a little bit weaker June, there would have been some concerns, he said.
A major continuing factor driving strong U.S. car sales is pent-up demand. Consumers are drawn to new car lots to replace aging and decrepit vehicles. Particularly important for the Detroit three are contractors who increasingly began replacing trucks in June as the housing market remained relatively stable, according to Schuster.
Chrysler was the first major automaker to report June car sales, the strongest in five years, with 144,811 vehicles sold. However, industry analysts expected overall U.S. auto sales to be more or less flat from May, with a seasonally adjusted average selling rate, or SAAR, of between 13.6 million and 14 million for June. June sales for U.S. automakers were strong in part due to insulation from macroeconomic uncertainty for the industry.
The combination of new products, available credit, lower fuel prices and modest economic growth was a stronger influence on consumer behavior than economic and political uncertainty, said Kurt McNeil, GM vice president for U.S. sales and operations.
Chrysler reported 20 percent year-over-year sales growth, GM said sales jumped 16 percent and Ford announced more modest 7 percent sales gains.
While General Motors' gains seem dramatic in comparison with Ford's, this is actually a sign of GM's exceptional weakness in 2011. Ford had a very strong 2011 sales year, thus rendering 2012 gains less impressive, while GM's sales are more volatile, Schuster said.
Japanese carmakers may continue to see major recovery from last year's earthquake and tsunami and flooding in Thailand, which disrupted supply chains, production and inventory levels. Toyota reported June U.S. sales gains of 60.5 percent.
With 20 percent June gains, Chrysler marked the 27th month of year-over-year sales growth. The Chrysler, Jeep, Dodge, Ram Truck and FIAT brands all posted gains. Chrysler brand sales rose 63 percent, the best June sales since 2008.
June was another solid month for the Chrysler Group, said Reid Bigland, president and CEO of Dodge Brand and head of U.S. sales.
Chrysler has been the only profitable division of Fiat in recent quarters. Strong sales from the American unit could bolster weak European sales for the Italian automaker.
Fiat SpA (Milan: F) shares rose 3.56 percent to €4.07 ($5.12) Tuesday.
Ford reported June sales rose 7 percent from last year due to higher sales of trucks and SUVs.
June was a good month for Ford and a particularly strong month for vehicles like Escape, Fusion, Explorer and F-Series, said Ken Czubay, Ford's vice president of U.S. marketing, sales and service.
Ford sales are up 7 percent for the year so far with 1.14 million vehicles sold, including 207,759 sold in June. The bulk of June sales gains came from SUV sales. SUV sales rose 24.8 percent while truck sales gained 1.2 percent. Car sales growth was more modest at just 0.3 percent.
Sales of Ford's flagship F-series trucks rose 10.9 percent with 55,025 sold, the best June sales in five years, indicative of increasing demand for Ford trucks. Car sales were weaker, though, with both the Fiesta and Focus posting losses. However, Fusion sales gained 17.4 percent.
Ford's Lincoln brand actually posted a 2.5 percent gain, with 7,544 units sold.
Ford shares rose 24 cents to $9.63, more than 2.5 percent, by Tuesday afternoon.
GM, the No. 1 automaker, reported 15.5 percent year-over-year U.S. sales growth and the best sales month for the company since September 2008.
All four GM brands, Chevrolet, GMC, Buick and Cadillac, reported double-digit sales gains, with Cadillac leading the pack at 26.8 percent. Overall, GM sold 248,710 vehicles in June and projected a seasonally adjusted annual rate of sales of 14 million for June, in line with the high end of analyst expectations.
GM shares soared nearly 6 percent to $21.12 before easing to $20.67, up $1.10 or 5.6 percent, Tuesday afternoon.
Toyota, Japan's No. 1 car company, said June U.S. sales rose 60.3 percent compared to the year before.
The exceptional growth in year-over-year sales likely reflects the company's continued recovery from supply-chain, manufacturing and inventory disruptions caused by last year's Japanese earthquake and tsunami and floods in Thailand. The company will report detailed sales figures at 1:30 p.m. EDT.
Toyota shares rose 78 cents to $80.96, or 1 percent, by Tuesday midday.
Honda Motor Co.(NYSE: HMC) reported June U.S. auto sales rose 48 percent, the company's best June since 2008, with strong sales gains for both Honda and Acura brand vehicles.
Honda sold 193,811 vehicles in June. Car sales for the Japanese automaker rose 48.8 percent while truck sales rose 55.9 percent, mirroring substantial industry-wide gains in truck and SUV sales in June. Honda's two best celling vehicles were the Civic car and the CR-V crossover SUV.
Honda Motor Co. (NYSE: HMC) shares rose 1.02 percent to $34.62 Tuesday afternoon.
Nissan Motor Co. (Tokyo: 7201) said June U.S. car sales rose 28.2 percent on gains for almost every model in the Nissan lineup, demonstrating the continued recovery of the Japanese automotive industry after last year's Japanese earthquake and tsunami and flooding in Thailand.
Nissan sold a total of 92.237 vehicles in June. Car sales increased 19.1 percent, while truck sales increased 45.2 percent. The flagship Nissan Altima led the way with an 11.7 percent sales boost. G-class vehicles were the top sellers for the Infiniti brand. Nissan vehicle sales are up 14.4 percent for the first half of 2012 compared to the year before.
Nissan shares rose 0.94 percent to 750 yen ($9.40) Tuesday.
Subaru, the automotive manufacturing arm of Japanese industrial company Fuji Heavy Industries Ltd. (Tokyo: 7270), reported June U.S. car sales rose 40 percent over the year before.
Sales for the first half of 2012 were also up 24 percent on the year before, according to Subaru. Strong June sales were fueled by massive sales gains for all of Subaru's models, particularly the Impreza which increased sales by 147 percent. June marked the seventh consecutive month of sales gains for Subaru.
A seventh consecutive month of sales gains clearly indicates that our line-up of sedans and cross-over vehicles - and our new BRZ sports car - are hitting the sweet spot for consumers, Bill Cyphers, senior vice president of sales for Subaru of America.
Fuji Heavy Industries Ltd. (Tokyo: 7270) shares rose 2.05 percent to 647 yen ($8.10) Tuesday.
Volkswagen AG (Frankfurt: VOW) announced June U.S. sales rose 34.2 percent. The company reported its best June and first half since its heyday with the VW Bus in 1973.
VW sold 38,170 vehicles in the U.S. in June, a 34.2 percent gain year-over-year, which supported sales growth of 35.4 percent for the first half of 2012. VW's leading models were the Jetta, Passat and Golf, which combined accounted for over two-thirds of the company's June sales.
Volkswagen AG (Frankfurt: VOW) shares rose 0.45 percent to €118.52 ($149.14) Tuesday.