U.S. car sales revved up again in June after lackluster May sales as consumers flocked to dealers to replace aging vehicles and buy new trucks and crossover SUVs. High demand and incentives for SUVs and trucks from all manufacturers combined with continuing pent-up demand and the continued recovery of Japan's automakers from last year's earthquake, tsunami and floods in Thailand to boost the seasonally adjusted annual rate (SAAR) of sales above 14 million again.
Pent-up demand took a little bit of a break in May, but seems to be back, Jeff Schuster, senior vice president for LMC Automotive said Tuesday.
June U.S. car sales volume was around 1,280,335 units sold, slightly above expectations, according to John Sousanis with WardsAuto. June SAAR reached 14.04 million units, up from below 14 million in May.
WardsAuto predicts an annual SAAR of 14.04 million units, while LMC Automotive held its prediction at around 14.5 million.
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) gained a combined 9.5 percent on their daily sales rate for June, increasing sales for the first half of 2012 by 10.8 percent, according to WardsAuto.
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 Kurt McNeil.
The major Japanese car companies, Honda Motor Co. (NYSE: HMC), Nissan Motor Co. (Tokyo: 7201) and Toyota Motor Corp. (NYSE: TM), all posted major sales gains as well, indicating the companies' return to normal inventory levels and restored supply chains and manufacturing capacity after last year's natural disasters, according to Ward's Schuster.
All of the major auto makers posted big gains in sales, and truck and SUV sales were a primary driver of growth across the board. All major manufacturers with trucks or SUVs in their lineup posted double-digit sales gains in the segment. High truck and SUV sales were driven in part by broad factors like pent-up demand and lower gas prices in June, but they also reflected a wave of contractors replacing aging work trucks, according to Schuster.
Chrysler truck sales rose 12 percent. For Ford, truck sales rose 1.2 percent while SUV sales surged 24.8 percent. GM truck and SUV sales rose 11 percent. Honda truck and SUV sales rose 55.9 percent, Toyota truck sales rose 34.3 percent, and Nissan truck and SUV sales soared 38 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 5.09 percent to €4.13 ($5.21) 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 have increased 7 percent for the year so far with 1.14 million vehicles sold, including 207,759 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 2.24 percent to $9.60 Tuesday.
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 reflected 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.
Toyota shares rose 70 cents to $80.88, or 0.87 percent, by Tuesday's close.
Honda 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 bestselling vehicles were the Civic car and the CR-V crossover SUV.
Honda shares rose 1.02 percent to $34.62 Tuesday.
Nissan (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. 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, said 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.