U.S. Auto Sales in July Gain 9% but Ford and GM Slip
Overall, sales rose 9%, even though July 2012 had two fewer selling days than July 2011. Both Ford and GM attributed their sales declines primarily to seasonal slowdowns in fleet sales, although their retail sales also slowed, reflecting primarily a surge in sales by Japanese automakers, led by a 45% gain at Honda(HMC) and a 26% gain at Toyota(TM) . Nissan sales rose 16%.
The seasonally adjusted annualized sales rate was 14,1 million. Projections of the rate rose during the day as more automakers reported sales.
Edmunds.com economist Lacey Plache said she viewed the July sales numbers as a positive economic indicator.
"Auto sales remain strong, on track for sales of 14.4 million for 2012, or nearly 13% growth over 2011," Plache said in an e-mail. "(That) gives hope that there is a floor to recent weakness in other economic indicators and that autos could be a strong contributor to continued economic growth.
"The bottom line is that pent-up demand for autos is still strong and can be expected to continue, given the aging fleet and the current expansion of credit," Plache said. "While consumer uncertainty about economic conditions remains a risk, July's confidence index increased somewhat, again indicating a floor to what had been a trend of sagging confidence."
Another factor in declines for Ford and GM were fewer truck sales. GM retail truck sales fell 12%.
"Truck buyers are reacting to (poor economic news) of the last several months," said Kurt McNeil, GM vice president of U.S. sales operations, during the GM sales call. But the outlook for truck sales is positive, both because of seasonal trends and a pickup in housing starts and, next year, the introduction of a new Silverado.
"We're expecting more robust truck sales for the industry and for GM," McNeil said. The Detroit Three sell proportionally more trucks than foreign automakers do.
Overall, GM sales declined 6% as fleet sales fell 15% and retail sales fell 3%. Sales to rental customers fell 41% because planned deliveries occurred earlier in the year than they did in 2011. Fleet sales account for about a quarter of GM's business.