As the U.S. auto industry continues to come roaring back from the worst recession in more than half a century, car sales appear to have surged to their highest July total since 2006, automakers reported Thursday.
If anything, supply shortages and new model delays could be the only thing holding the market back from an even bigger upturn, industry officials warned, Ford and Hyundai among the makers stretching the limits of their production capacity while Chrysler bangs away at problems with the new Jeep Cherokee model it hopes to launch next month.
There are few makers who didn’t score gains during July, with industry analysts estimating that overall year-over-year sales numbers will wind up at least 15% ahead once the last few manufacturers weigh in. Detroit makers all posted double-digit increases, as did the Japanese Big Three – though Nissan’s surge was tempered by a nearly one-third drop in sales by its Infiniti luxury brand.
Why is the market continuing to heat up? Analysts point to a wide variety of factors including looser credit, a big surge in the housing market that is buoying demand for full-size pickups, growth in small car and hybrid sales as consumers prepare for future fuel price hikes and, perhaps most importantly, improving confidence in a slow-growing economy.