Car Sales Hit Levels Not Seen Since 2007
DETROIT (WWJ) - June car and truck sales are flirting with an "annual rate" of 16 million, something that hasn't been seen in more than five years.
"June is coming in better than I expected," says Edmunds.com senior analyst Jessica Caldwell. "I think better than a lot of people expected."
Ford and Nissan lead the major brands with 13 percent sales increases. Both Honda and Toyota saw their sales up in the ten percent range. Chrysler sales rose 8 percent. GM sales are up a little over six percent.
"We're seeing real good fundamentals," says GM Sales Operations Manager Kurt McNeil. "Housing and auto are leading the way."
As construction workers build houses, they need work trucks. GM's pickup sales are up 29 percent. Ford F-Series sales rose 24 percent. Chrysler's Ram brand saw it's sales up 23 percent.
It was also a great month for small cars. Ford's Fiesta saw it's sales roughly double from last year.
"In June, we continued to see strong demand across the entire lineup," said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. "We're particularly encouraged by strong retail share gains, especially in coastal markets, where the combination of great design and fuel economy is resonating with customers – including many buying a Ford for the first time."
Chrysler sales were led by a 39 percent increase in sales of the Dodge Durango. The Jeep Grand Cherokee, apparently unharmed by an argument over a recall of older models, saw sales up 33 percent.
"Last month Chrysler Group set seven individual vehicle line sales records and achieved our 39th consecutive month of year-over-year sales growth. The fundamentals for continued industry gains in new vehicle sales remain intact," said Reid Bigland, Head of U.S. Sales.
While the auto industry is seeing sales numbers similar to 2007, the quality of the sales is much stronger today. Back in 2007, car companies were offering deep discounts.
"The manufacturers are not giving away their vehicles, incentives are flat," says TrueCar.com analyst Jesse Toprak. "Average transaction prices, on the other hand, are actually up, which is good news for the profitability of the manufacturers."
The strong close to the first half of the year, could set things up nicely for the second half.
"I don't think it will all be sunshine and rainbows," says Edmunds analyst Jessica Caldwell. "But, the fact that we've set this pace for ourselves is a good setup for the rest of the year."
Executives from the major auto companies say pent-up demand remains strong, and there's no sign that consumers have been scared off by fears of higher interest rates.
"The industry continued to grow on an annualized basis through the first half of the year," says GM's Kurt McNeil. "We see that continuing through the back half of the year. That's a good thing."
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