June Car Sales Shatter Expectations

DETROIT (WWJ) - June car sales numbers shocked the experts, with a seasonally adjusted annual sales rate of 17 million, for the first time since July of 2006.

"It looks as though the industry is still very strong, and well poised for a strong finish of the year,"  said Kelley Blue Book analyst Alec Gutierrez.

Sales rose one percent on average.  While that may not sound like much, June had two fewer selling days than last year.  So, any increase should be considered a big gain.

"Overall a continuation of the strong spring, and setting up summer nicely as well," said Jeff Schuster, who heads the industry forecasting team at LMC Automotive.

With so many recalls, General Motors was probably the most closely watched company.  Projections were for a slight sales drop.  But instead we saw a one per cent sales increase.

"We clearly beat expectations," said GM spokesman Jim Cain.  "There are a lot of sources of strength.  Buick and GMC in particular had phenomenal months, their best June sales since 2006."

Cain said he saw no evidence of sales being hurt by the recall.  AutoTrader.com analyst Michelle Krebs agrees.

"GM has remained amazingly resilient through this in terms of sales."

If you adjust for two fewer selling days, GM sales would have been up 9 percent.

“Even with gas prices climbing and ongoing recall headlines, General Motors is having a banner sales year," said Kelley Blue Book analyst Karl Brauer.  "The automaker’s redesigned full-sized SUVs are a healthy profit center for GM, and they are clearly resonating with customers despite national fuel prices that are approaching $4 a gallon.  The success of these models is driving up GM’s average transaction price even as overall sales grow.  The result is a GM at pre-recession health levels, recalls be damned.”

Chrysler lead the way with a nine percent sales increase.

“In spite of two fewer selling days in June versus a year ago, we were able to increase our sales 9 percent and post our strongest June sales in seven years,” said Reid Bigland, Head of U.S. Sales. “Month-over-month sales of our all-new Chrysler 200 increased from a few hundred units in May to more than 5,000 in June as inventory of the mid-size sedan continues to build. In addition, sales of the Jeep brand increased 28 percent and our Ram Truck brand 14 percent helping to lead Chrysler Group to its 51st-consecutive month of year-over-year sales growth.”

Chrysler helped by strong underlying demand, and a fairly decent economic climate.

"I think fundamentals like credit and credit availability is there," said Bigland. "Pent up demand is there."

Nissan sales rose 5 percent.  New products have made this a good year for the Japanese brand.

"After having underwhelming sales for many years, the Sentra has become a player in the popular compact car segment," said Edmunds.com senior analyst Jessica Caldwell. "It's popularity essentially singularly led Nissan to a year-over-year sales gain which is no easy feat. Having a compelling compact car, midsize sedan, and compact SUV has proven to be a winning formula for Nissan, both in the month of June and in general."

Toyota sales were up 3 percent.  Ford sales were down 6 percent.  But some of their products outperformed the others.

“Both the Fusion and Transit Connect set records in June, continuing their sales momentum,” said John Felice, Ford vice president, U.S. Marketing, Sales and Service. “F-Series again topped 60,000 sales and is tracking to our inventory plan with the lowest incentives among the major players in the segment.”

Ford was also hurt because it's starting to transition to new models of popular vehicles.

Honda also saw its sales down six percent.  Hyundai sales were up four percent.

This puts a cap on a first half that saw sales impacted early because of weather, then roar into gear as the spring arrived.

"An outstanding first half.  Sales for the first half were up over last year," said AutoTrader.com's Michelle Krebs.  "We just came off the second quarter, which was the best second quarter since 2006."

Connect with Jeff Gilbert
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