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Trucks Add Momentum to July Sales Surge

But small cars, hybrids also gain ground.

by on Aug.01, 2013

The new Ford F-150 Tremor. Pickup truck sales appear to be leading the auto recovery.

Despite some signs the U.S. economy may be slowing down a bit, nothing seemed able to halt the resurgent auto industry last month, perhaps because the market’s heavy lifters, full-size pickups, were flying out of dealer showrooms.

While several major makers have yet to weigh in with their numbers, preliminary estimates suggest the month was the industry’s best since July 2006. Detroit makers – all three of whom posted double-digit increases — were particularly pleased by the monthly trends, demand for trucks apparently being driven by a housing market revival.

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“We continue to see strong retail sales, particularly with our pickup trucks and SUVs, and that has helped to propel Chrysler Group to our 40th consecutive month of year-over-year sales growth,” said Reid Bigland, head of the maker’s Ram brand as well as its U.S. sales chief.

Ford also saw big gains in the hybrid and small car segments, the new Fiesta subcompact shown here.

General Motors, which has lagged the overall market revival for much of the last several years, posted a solid 16% surge for July, while Chrysler and Ford both reported 11% year-over-year gains.  The latter maker’s F-Series pickups were up by 23%, however. But Ford saw even bigger gains at the other end of the model spectrum where its subcompact Fiesta model gained 89%.

“Our small cars and hybrids continue to attract new customers to Ford and away from our competitors,” declared sales chief Ken Czubay. Ford last month reported that its gas-electric models, including the new C-Max “people mover” have been running at record levels this year reflecting the growing focus on fuel economy among motorists in general.

(GM, VW gain ground in global sales race but Toyota still tops. Click Here for more.)

While final numbers aren’t in, it appears few, if any, manufacturers will be in the negative category for July. That doesn’t mean some makers won’t have lost ground, at least from a market share perspective.  After several years of solid growth, VW sales have been slowing since early spring and the maker reported a modest 3.3% jump for July.

According to preliminary data crunching by J.D. Power and Associates and other analysts, the overall industry was expected to have gained as much as 15% last month – roughly double the domestic market’s 7% increase for the first half of 2013. Industry sales are forecast to have totaled 1.3 million – or an annualized rate of 15.8 million.

Going into 2013, analysts had laid bets that sales would be well ahead of last year’s total of 14.5 million but many are now raising their numbers to 15.5 million and possibly even higher if momentum continues at this pace.

(Jeep Cherokee launch problems could be big setback for Chrysler. Click Here for more.)

While Nissan may wind up lagging the overall torrid July market pace, with a 10.9% increase it nonetheless reported record sales for its namesake brand. The Nissan marque surged 16.8% but the highline Infiniti brand slid 33.2%, The maker cautioned that Infiniti was caught in a holding period while it waited for the launch of its new Q50 sedan replacing its old G model, the division’s best-seller.

The monthly numbers appear to suggest that consumers, rather than fleets, are driving much of the recovery – with the exception, perhaps, of the pickup truck market.  Notably, GM said its retail sales grew by 23% in July.

“For GM, July was the most well-balanced month of the year from a retail sales standpoint: trucks were hot, but so were small cars and family vehicles,” said Kurt McNeil, GM’s vice president of U.S. sales operations.

Ford saw similarly strong surges in retail demand, “particularly in the coastal regions of the country,” noted sales chief Czubay,

There are any number of factors coming together to buoy the U.S. automotive market.  Alec Gutierrez, senior market analyst at Kelley Blue Book, suggested, “Consumer confidence has played a key role in the ongoing recovery and currently is at the highest level seen since January 2008.”

While consumers may be confident enough to return to showrooms, several recent reports have indicated that looser credit is letting them drive away with new vehicles, and consumers have been stretching purchases and leases out for longer periods.

“Elevated new vehicle transaction prices are being enabled by the availability of longer-term loans, affordable leases and strong used vehicle values, compounded by the availability of low- interest rates,” wrote John Humphrey, senior vice president of the global automotive practice at J.D. Power.

Among makers expecting to release sales later today, Edmunds.com forecast Toyota could be up as much as 21%, while American Honda officials recently signaled they could see a gain of as much as 18%.

(With competitors gaining ground in key segments, Toyota is fighting back. Click Here for the story.)

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2 Responses to “Trucks Add Momentum to July Sales Surge”

  1. Jorge M. says:

    Obviously $4-$5/gal. fuel prices are not a deterrent to those of means…and that is why the fuel prices just keep increasing. Consumers have failed the “squeal” test. Until there is enough public outrage and government investigations, fuel prices will continue to rise as the oil industry Cabal “conditions” people for outrageous price increases.

    • Paul A. Eisenstein says:

      I cannot tell you how many stories I have written over the years that mention a possible turning point “when fuel prices climb to $xxx.” (You can fill in the blank.) No one, neither analysts nor journalists, have called it right. Now, let’s dig deeper and we see the public has collectively shifted to smaller, more efficient vehicles and even hybrids are gaining traction. But there is still a market for bigger, less efficient products. Notably, the surge in pickup sales seems to reflect more contractor and fleet demand, I should note, than a decade ago when the record sales levels included a lot of “personal use” vehicles from the likes of suburbanites in Greenwich, CT who thought it was cool to have a fully loaded Ford King Ranch F-150 in their driveway. There are a lot of fewer of those folks in the pickup market today.

      Paul A. Eisenstein
      Publisher, TheDetroitBureau.com