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Ford, Chrysler, GM post June gains on pickups

Double-digit increases at Nissan, Toyota, Honda

July 2, 2013 – General Motors, Ford Motor Co. and Chrysler Group — aided by surging pickup demand — reported increases in June sales as the industry appeared poised to wrap up the first half of the year on a strong note.

GM sales rose 7 percent from a year earlier, while Chrysler gained 8 percent and Ford advanced 13 percent. Volume at Toyota Motor Corp. and Honda Motor Co. rose 10 percent and Nissan Motor Co. deliveries increased 13 percent.

GM executives today projected the seasonally adjusted sales rate for June will come in at 15.8 million to 16 million.

Based on early results from automakers that represent about 68 percent of industry volume, J.P. Morgan analyst Ryan Brinkman said the June SAAR was tracking at 15.9 million units. And Ford officials said today they see the June SAAR in the “low 16 million unit range.”

Those estimates are higher than most forecasts, and would mark the industry’s strongest pace since late 2007.

“America’s families are better off than they were at the beginning of the year and they believe — with good justification — that the economic expansion is going to continue,” GM’s chief economist, Mustafa Mohatarem, said in a statement. “Even moderate economic growth will be enough to keep the auto sales rate in the second half of the year at healthy levels around the mid 15 million-unit mark.”

Chrysler’s 8 percent increase was led by a gain of 23 percent at the Ram truck brand and an 11 percent advance in car deliveries. Ford tallied a 24 percent jump in F-Series pickups.

At GM, deliveries of the Chevrolet Silverado advanced 29 percent and GMC Sierra volume rose 32 percent. Volume rose 5 percent at GMC, 7 percent at Chevrolet and 15 percent at Cadillac, while Buick deliveries slipped 4 percent.

GM said its retail sales rose 14 percent while fleet shipments declined 9 percent.

At Chrysler, light truck volume rose 7 percent, with Ram pickup deliveries jumping 24 percent to nearly 30,000 units.

June marked Chrysler Group’s 39th consecutive monthly increase in U.S. sales.

Volume rose 1 percent at the Fiat and Chrysler brands, and 12 percent at Dodge, while Jeep deliveries were up slightly compared with June 2012, Chrysler reported.

Jeep’s U.S. sales, which are off 5 percent this year, have suffered since the Liberty SUV was discontinued in August 2012.

The Liberty’s replacement — the 2014 Jeep Cherokee — will not be widely available until the third quarter, Chrysler officials said last week.

“The fundamentals for continued industry gains in new vehicle sales remain intact,” Reid Bigland, head of U.S. sales for Chrysler Group, said in a statement.

Ford said sales of small cars — Fiesta, Focus and C-Max — rose 39 percent to 35,851, while deliveries of the redesigned Escape crossover increased 1 percent to a monthly record of 28,694. Lincoln volume slipped 1 percent.

When automakers’ results are tallied at the end of the day, U.S. light-vehicle sales are projected to end up at 1.38 million units for the month, a 7 percent increase, based on a survey of 10 analysts by Bloomberg.

The seasonally adjusted annual sales rate is projected to reach 15.6 million — matching the November 2012 rate and the high mark of the current recovery cycle — based on a Bloomberg poll of 17 analysts. In June 2012, the SAAR totaled 14.4 million units.

The SAAR has topped 15 million units every month but one — April — starting in November.

Chrysler today projected a June SAAR of 16 million, including medium- and heavy-duty trucks.

Analysts expect U.S. light-vehicle volume to reach 15.3 million to 15.5 million for the year, compared with 14.49 million in 2012.

Dealers and analysts say June sales started off strong because of extended Memorial Day holiday deals and then slowed briefly before regaining momentum on early July 4 holiday incentives.

GM, Ford, and the Hyundia-Kia Group raised incentives in June compared with a year ago by 8 percent to 18 percent, TrueCar Inc. estimated today.

A surge in Elantra sales and higher demand for the redesigned Santa Fe crossover helped volume rise 2 percent to 65,007 units last month at Hyundai, despite ongoing shortages of many models.

Hyundai said fleet deliveries represented 19 percent of its June volume.

At Mazda Motor Corp., June sales rose 13 percent on strong demand for the redesigned Mazda6 mid-sized sedan.

Mike Vasquez, general sales manager at Gilman Chevrolet in San Benito, Texas, said despite somewhat volatile showroom traffic, pickup demand remained robust in June.

“Trucks are hot right now,” Vasquez said, citing the redesigned 2014 Chevy Silverado and its heavily discounted outgoing predecessor.

John F. Bergstrom, chairman of Bergstrom Automotive in Neenah, Wis., said low finance rates, and truck and SUV demand were driving results at his 25 stores located mostly in the Green Bay area.

“We are giving 1.9 financing for new and used vehicles for 72 months,” Bergstrom said Friday. “It would be very hard to say something bad about how June is going. It feels like consumer confidence is back.”

Not all brands are benefiting from the steady rise in U.S. sales. Volkswagen Group’s VW unit, one of the top-performing brands in recent years, saw U.S. sales slide for a third consecutive month in June. The brand’s volume is off 1 percent for the year.

Large pickup and compact utility vehicles are expected to drive the market in June with sales in both segments forecast to climb nearly 20 percent.

GM, Ford and Chrysler — the primary beneficiaries of the rebound in large pickup sales — each have gained U.S. market share through May.

Stable gasoline prices, a rebound in construction activity, higher stock prices and the steadily improving U.S. economy are motivating new-car shoppers.

“The industry continues to benefit from modest improvements in housing, unemployment and consumer confidence,” said Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book.

New or redesigned models such as the redesigned Ram pickup, Cadillac ATS, Mazda CX-5, BMW X1, Acura RDX, and Ford Escape and Toyota RAV4 crossovers, are drawing shoppers.

Sales of the redesigned Honda Accord topped 30,000 units for the fourth consecutive month and helped the Honda brand to a 13 percent increase in June. With Acura volume off 10 percent, Honda Motor Co.’s overall sales rose 10 percent in June to 136,915 units.

The redesigned Forester and all-new XV Crosstrek helped propel Subaru’s U.S. sales up 42 percent last month and 25 percent for the year.

The surge in pickup sales and new car and crossover models that are highly contented drove the average transaction price across the industry in June to $31,125, up $617 over June 2012 and an increase of $147 over May, TrueCar said.

“The auto cycle seems poised to up-shift to 3rd gear,” said Jefferies & Co. analyst Peter Nesvold. “Consumer spending has held up despite higher payroll taxes and federal spending cuts, and we expect automotive purchases to remain strong as consumers replace aging vehicles and credit is becoming more available and at lower rates.”