Auto Sales Rise: Buyers Want New Cars and Can Afford Them
DETROIT (TheStreet) -- U.S. auto sales continued to grow in June, with all three of the biggest automakers reporting gains as pent-up demand was stimulated by favorable buying conditions.
"We're seeing consumers come back into the market because the age of the fleet is now around 10 years," said Ellen Hughes-Cromwick, Ford's (F) chief economist, on Tuesday's sales call. "People are coming in to buy vehicles: They are doing OK (in employment and income). There is a demand for newness. Auto loan rates are low. All of those conditions are really supporting the sort of forecast we put together."
Ford projects GDP growth of 2% to 2.5% and full-year light vehicle sales of 14 million. GM (GM) said the light vehicle seasonally adjusted annualized sales rate in June should be about 14 million, ahead of estimates.
Toyota (TM) said June sales rose 60.3% from the same month a year earlier, when its inventories were severely diminished by the production problems stemming from the earthquake and tsunami in Japan. Chrysler said its June sales rose by about 20%. Ford sales rose about 7%.
GM said its sales rose 16%, besting analyst estimates as fleet sales rose. June sales totaled 248,750 vehicles, the highest since September 2008, even though the automaker has fewer brands. GM said its incentives were down in June.
Buick sales rose 27% to 18,851. Sales of the Chevrolet Silverado, the best-selling GM vehicle, rose 3% to 33,566. Sales of the Malibu rose 32% to 31,402. Volt sales were 1,760 units, meaning Volt six month sales have exceeded full-year 2011 sales.
Chevrolet, Buick, GMC and Cadillac all reported double-digit increases. On the GM sales call, Kurt McNeil, GM vice president U.S. sales operations, cited these positives: "Decent results in housing, fuel prices are down, (and) the availability of consumer credit is a positive.
"We knew there were going to be headwinds coming into this calendar year," McNeil said. "We still see headwinds, but at the end of the day we're calling for normal, moderate economic growth." For the first half of the year, GM sales rose just 4.3%, while Ford sales rose 7%.
In June, GM retail sales rose 8%, while fleet sales rose 36%, due in part to the timing of customer deliveries. In July, fleet volumes and mix are expected be down month over month and year over year, the automaker said.